Chap 1

A simulation: imitation of the operation of a real-world process or system over time

Can be used as:
– Analysis tool for predicting the effect of changes to existing systems.
– Design tool to predict performance of new systems.
Simulation can be used for the purposes of:
– Study internal interactions of a complex system.
– Observe the effect of system alterations on model behavior.
– Gain knowledge about the system through design of simulation model.
– Use as a pedagogical device to reinforce analytic solution methodologies, also to verify analytic
solutions.
– Experiment with new designs or policies before implementation.
– Determine machine requirements through simulating different capabilities.
– For training and learning.
– Show animation.
– Modeling complex system.
Simulation should not be used when:
– Problem can be solved by common sense.
– Problem can be solved analytically.
– If it is easier to perform direct experiments.
– If the costs exceed the savings.
– If the resources or time to perform simulation studies are not available.
– If no data, not even estimates, is available.
– If there is not enough time or personnel to verify/validate the model.
– If managers have unreasonable expectations: overestimate the power of simulation.
– If system behavior is too complex or cannot be defined.
Simulation is frequently used in problem solving.
In contrast to optimization models, simulation models are “run” rather than solved.  Simulation is not
“smart”.
Advantages:
– Explore new policies or procedures without disrupting ongoing operations of the real system.
– Test new hardware or physical systems without committing to acquisition.
– Test hypotheses about how or why certain phenomena occur.
– Study speed-up or slow-down of the phenomena under investigation.
– Study interactions of variables, and their importance to system performance.
– Perform bottleneck analysis.
– Understand how the system operates.
– Test “what if” questions.
Disadvantages:

– Model building requires special training.

– Simulation results can be difficult to interpret.
– Simulation modeling and analysis can be time consuming and expensive.
– Simulation is used in some cases when an analytical solution is possible (or even preferable).
The applications of simulation are vast.
The Winter Simulation Conference: an excellent way to learn more about the latest in simulation applications
and theory.
Some areas of applications:
– Manufacturing
– Construction engineering and project management.
– Military.
– Logistics, supply chain, and distribution.
– Transportation modes and traffic.
 – Business process simulation.
– Healthcare.
– Computer and communication systems.
Some general trends:
– Risk analysis, e.g. pricing, insurance.
– Call-center analysis.
– Large-scale systems, e.g., internet backbone, wireless networks.
– Automated material handling systems as test beds for the development and functional testing of
control-system software.
A system is a group of objects joined together in some regular interaction or interdependence to accomplish
some purpose.
– e.g., a production system: machines, component parts & workers operate jointly along an assembly
line to produce vehicle.
– Affected by changes occurring outside the system.
System environment: “outside the system”, defining the boundary between system and it environment is
important.
Components of a System
An entity: an object of interest in the system, e.g., computing jobs in queue.
An attribute: a property of an entity, e.g., priority class, or vector of resource requirements.
An activity: represents a time period of a specified length, e.g. job receiving service.
The state of a system: collection of variables necessary to describe the system at any time, relative to the
objectives of the study, e.g. the number of busy servers, the number of jobs in queue.
An event: an instantaneous occurrence that may change the system state, can be endogenous or exogenous,
e.g. a new job arrival, or service time completion
A model: a representation of a system for the purpose of studying the system.
Example:
Hospital
An entity: patient
An attribute: ages, diseases
An activity: patient receiving service
An event: arrival of patient
– A simplification of the system.
– Should be sufficiently detailed to permit valid conclusions to be drawn about the real system.
– Should contain only the components that are relevant to the study.
Discrete system: in which state variable(s) change only at a discrete set of points in time.
– e.g., the number of jobs in queue changes when a new job arrives or when service is completed for
another
Continuous system: in which state variable(s) change continuously over time.
- the temperature distribution in a room can be described by a continuous function that varies over space
Types of Models
- Two types of models: mathematical or physical.
- Mathematical model: uses symbolic notation and mathematical equations to represent a system.
o Simulation is a type of mathematical model.
- Simulation models:
o Static or dynamic.
o Deterministic or stochastic.
o Discrete or continuous.
Our focus: discrete, dynamic, and stochastic models
 – Analytical methods: deductive reasoning of mathematics to “solve” the model.
– Numerical methods: computational procedures to “solve” mathematical models.

Four phases:
-Problem formulation, and
setting objective and overall
design (important)
(step 1 to 2).
-Modeling building and data
collection (step 3 to 7)
-Running of the model
(step 8 to 10).
-Implementation (step 11 to
12).
An iterative process.
Explain why it is important
it is the first step in the study,
we must understand the
problem that we're simulating,
if we understand it in the
wrong way, we simulate
wrong and the model is
invalid

Question: How to simulate random events that we cannot come up with the probability like in the given
examples?

Simulating random events that we cannot come up with the probability for can be challenging, but there are
several approaches that can be used.
One approach is to use a simulation technique called Monte Carlo simulation. This involves generating a large
number of random samples from a distribution that approximates the unknown probability distribution. The
simulated outcomes can then be used to estimate the probabilities and statistics of interest.

Another approach is to use empirical data to estimate the probability distribution. If historical data or
experimental data is available, it can be used to estimate the probability distribution and simulate future events
based

What does it mean” discrete, stochastic, dynamic” simulation modeling ?

"Discrete" refers to a simulation model where events occur at distinct points in time. "Stochastic" means that the
model incorporates randomness or probability into the system being simulated. "Dynamic" indicates that the
model changes over time based on the outcomes of previous events and actions. Together, these terms describe
a simulation modeling approach that involves modeling complex systems as a sequence of discrete events with
probabilistic outcomes that evolve over time.

The following are some of the key concepts in discrete-event simulation:

1. Entities: Objects or items within the system being modeled that move through the system and change
states as they interact with other entities or resources.
2. Events: Occurrences that cause changes in the system state, such as the arrival of an entity or the
completion of a process.
3. Queues: Areas where entities wait for access to resources or events to occur before they can proceed.
4. Resources: Items that entities need to complete their processes or actions, such as machines, workers, or
materials.
5. Time: Simulation models typically involve the passage of time, often represented in discrete increments,
such as minutes or hours.
6. Statistics: Metrics used to evaluate the performance of the system being modeled, such as throughput,
waiting times, and utilization rates.
Together, these concepts form the basis for building a discrete-event simulation model that can help answer
questions about how a system behaves under different scenarios and conditions.
Concept in Discrete-Event Simulation:
● Entities:
- dynamic objects in the simulation, which move around in the system, affect the state of the system

- all entities have to be created.

- most entities represent real things in a simulation, but you also can create “fake” ones

● Attributes:

- a common characteristic of all entities, but with a specific value that can differ from one entity to
another
- attribute values are tied to specific entities
 Activities:
- A duration of time of specified length, which is known when it begins (although it may be specified
deterministic or in statistical distribution)
- This duration is characterized and defined by the modeler
 Events: An instantaneous occurrence that changes the state of a system
What are the system state variables in the Single-Channel Queue?
The Single-Channel Queue (also known as the M/M/1 queue) is a common model in queuing theory and
discrete-event simulation. The system state variables for this model are:

1. Number of customers in the system: This variable tracks the number of customers currently in the
system, including those who are waiting in the queue and those being served by the single server.
2. Server status: This variable indicates whether the server is idle or busy serving a customer.
3. Queue length: This variable measures the number of customers waiting in the queue for service.
4. Arrival times: This variable records the time each customer arrives to the system.
5. Service times: This variable measures the time it takes the server to complete service for each customer.
These variables are dynamic and change over time as customers arrive, join the queue, are served by the server,
and exit the system. Analyzing these variables can help to evaluate system performance and identify areas for
improvement.

● Example of Single-channel Queue

(you may put yourself in a position of a typical part entity)

- Create yourself (a new entity arrives)

- Write down what time it is now on one of your attributes (for other computations later)

- Wait in the Q until the server is free

- Seize the server (and take yourself out of the Q)

- Compute your waiting time in the Q

- Stay with the server for a duration that the service requires

- Release the server so other entities can seize it

- Compute your total time in system

 - Dispose of yourself and go away

The two major world views in discrete-event simulation are:

1. Event-scheduling: In this approach, the simulation model maintains a list of future events and their
scheduled times. The system state is updated only when an event occurs, and any subsequent events that
depend on the updated state are added to the event list. This approach can be more efficient than
continuously updating the system state, as it avoids unnecessary computations.
2. Process interaction: In this approach, the simulation model explicitly models the interaction between
different processes or entities in the system being simulated. Each process may have its own logic for
making decisions and taking actions based on the current state of the system. The system state is
updated continuously as each process interacts with others or with external events.( ARENA)

Or

Both approaches have their strengths and weaknesses, and the choice of which one to use depends on the
nature of the system being modeled and the goals of the simulation study. Event-scheduling is often used for
systems where events occur infrequently and there are long periods of idle time, while process interaction is
more suitable for systems with frequent interactions between entities or where the behavior of individual entities
is important.
Bonus:

What is the role of RANDOM NUMBER in simulation?

Random numbers and random variates are both used in simulation modeling to introduce stochasticity or
randomness into the system being modeled. However, there is a difference between these two concepts:

1. Random numbers: These are numbers generated by a random number generator (RNG), which typically
produce a sequence of uniformly distributed values between 0 and 1. Random numbers can be used as
building blocks for generating other types of random variables.
2. Random variates: These are values generated from a specific probability distribution, such as the normal
distribution or the exponential distribution. Random variates are derived from random numbers by
applying an appropriate transformation that maps the uniform distribution onto the desired distribution.

In other words, random numbers are raw inputs used to generate random variates, which in turn are used to
model the behavior of random variables in the system being simulated.
Give some examples of random OUPUTS used to evaluate a queuing system?
In a queuing system, random outputs are used to measure the performance of the system and evaluate the
effectiveness of different queue management policies. Some examples of random outputs used in queuing
system evaluation include:

1. Waiting time: The amount of time a customer spends waiting in the queue before being served.
2. Queue length: The number of customers waiting in the queue at any given time.
3. Service time: The amount of time it takes for a server to serve a customer.
4. Utilization: The percentage of time that a server is busy serving customers.
5. Arrival rate: The rate at which customers arrive at the queuing system.
6. Abandonment rate: The percentage of customers who leave the queue without being served.
7. System throughput: The total number of customers served by the system over a given time period.
8. Idle time: The amount of time that the server is idle and not serving customers.
By analyzing these random outputs, simulation modeling can help identify bottlenecks in the queuing system,
assess the impact of different queue management policies, and optimize the system to improve customer service
levels and reduce wait times.

Give some examples of RANDOM FACTORS in inventory management?

In inventory management, there are several sources of randomness and variability that can be modeled using
random factors. Some examples include:
1. Demand: The demand for a product can be highly variable and unpredictable, with different levels of
demand occurring at different times or in different locations. Random factors such as seasonality, market
trends, or unforeseen events can all impact demand.
2. Lead time: The time it takes to receive an order from a supplier can also be highly variable, depending on
factors such as supplier reliability, transportation delays, or customs inspections. These lead time
variations can lead to uncertainty in inventory levels and stockouts.
3. Order quantities: The amount ordered when placing an order with a supplier can also vary based on
factors such as price breaks or minimum order quantities. This can impact the overall costs and inventory
levels within the supply chain.
4. Quality: The quality of incoming supplies can also vary, leading to unpredictable levels of defect rates or
scrap rates.
5. Production capacity: The production capacity of a manufacturing facility can be impacted by random
events such as machine breakdowns or workforce disruptions, which can lead to delays and impact
inventory levels.
By incorporating these random factors into a simulation model, it is possible to evaluate the performance of
different inventory management policies and strategies under various scenarios and conditions. This can help
identify the most effective strategies to minimize costs, optimize inventory levels, and improve customer service
levels.
Give some examples of random OUPUTS used to evaluate an inventory management system?

Simulation modeling can be used to evaluate different inventory management policies and strategies. The
following are some examples of random outputs that might be used to evaluate the performance of an inventory
management system:
 1. Inventory level: This is the amount of inventory on hand at any given time. Random fluctuations in
demand, lead times, and other factors can cause inventory levels to vary over time.
2. Stockouts: This occurs when inventory levels drop below a certain threshold and can result in lost sales or
production delays. The occurrence and duration of stockouts can be modeled using random variates.
3. Reorder point: This is the inventory level at which a replenishment order is placed. The optimal reorder
point depends on the uncertainty in demand, lead times, and other factors, which can be modeled using
random inputs.
4. Order quantity: This is the amount ordered when a replenishment order is placed. The optimal order
quantity depends on the costs associated with ordering and holding inventory, as well as the uncertainty
in demand and lead times.
5. Total cost: This includes the costs of ordering, holding, and potentially backordering or expediting
inventory. The total cost can be computed for different inventory management policies and evaluated
using random inputs to assess robustness and sensitivity to different scenarios.
By evaluating these random outputs, simulation modeling can help identify the strengths and weaknesses of
different inventory management policies and strategies and inform decision-making in real-world systems.