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Simulation Modeling: Mcgraw-Hill/Irwin

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63 views10 pages

Simulation Modeling: Mcgraw-Hill/Irwin

Uploaded by

sunflower
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Simulation

Modeling

McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
LEARNING OUTCOMES
• Discuss the steps of conducting a simulation
• Explain the advantages and disadvantages of
simulation.
• Make a simulation model on a given situation.
Simulation
Simulation Definition:
Descriptive technique that enables a decision
maker to evaluate the behavior of a model under
various conditions
• Simulation models complex situations
• Models are simple to use and understand
• Models can play “what if” experiments
• Extensive software packages available
Simulation Process
1. Identify the problem
2. Develop the simulation model
3. Test the model
4. Develop the experiments
5. Run the simulation and evaluate results
6. Repeat 4 and 5 until results are satisfactory
Monte Carlo Simulation
• Probabilistic simulation technique used
when a process has a random component
• Identify a probability distribution
• Setup intervals of
random numbers to
match probability distribution
• Obtain the random numbers
• Interpret the results
Excel Simulation Example
Advantages of Simulation
• Solves problems that are difficult or impossible to
solve mathematically
• Allows experimentation without risk to actual system
• Compresses time to
show long-term effects
• Serves as training tool
for decision makers
Limitations of Simulation
• Does not produce optimum solution
• Model development may be difficult
• Computer run time may be substantial
• Monte Carlo simulation only
applicable to random systems
Example
• Higgins plumbing and Heating maintains a stock
of 30-gallon hot water heaters that it sells to
homeowners and install for them. Owner Jerry
Higgins likes the idea of having a large supply on
hand to meet customer demand, but he also
recognizes that it is expensive to do so. He
examines hot water heater sales over the past 50
weeks and notes the following:
• 

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