Scribd
Upload
18 views

Simulation

Simulation is a quantitative approach used to model real-world systems and experiment with different inputs to analyze outcomes. It involves mathematical models with controllable and probabilistic inputs. The document provides examples of how simulation can be used for new product development, airline overbooking, inventory policy, traffic flow, and waiting lines. It models how different inputs impact outputs like profit, customer wait times, and traffic flow. Simulation allows "what-if" analysis by changing input values to compute resulting outputs under various scenarios.

Uploaded by

aurumpari05
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
18 views

Simulation

Simulation is a quantitative approach used to model real-world systems and experiment with different inputs to analyze outcomes. It involves mathematical models with controllable and probabilistic inputs. The document provides examples of how simulation can be used for new product development, airline overbooking, inventory policy, traffic flow, and waiting lines. It models how different inputs impact outputs like profit, customer wait times, and traffic flow. Simulation allows "what-if" analysis by changing input values to compute resulting outputs under various scenarios.

Uploaded by

aurumpari05
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 16

By: Felimon D.

Flavier, MD
Lotis Venus Love M. Casiple, MD
 Most widely used quantitative
approaches to decision making
 Method for learning about the real
system by experimenting with a model
that represents the system
 Mathematical expression and logical
relationships
 Two points
 Controllable Inputs: analyst selects the value
 Probabilistics Inputs: randomly generated
 Diagram of a Simulation Model

Probabilistics Inputs

Controllable
Inputs
MODEL Output
 Following examples applied by Simulation
 New Product Development
 Airline Overbooking
 Inventory Policy
 Traffic Flow
 Waiting Lines
 New Product Development
 To determine the probability that a new product
will be profitable.
 A model is developed that relates profit (the
output measure)
 Probabilistic inputs: demand, parts cost, and labor
cost.
 Controllable input is whether to introduce the
product.
 Airline Overbooking
 To determine the number of reservations an
airline should accept for a particular flight.
 Probabilistic input: the number of passengers
with a reservation who show up and use their
reservation
 Controllable input: the number of reservations
accepted for the flight.
 Inventory Policy
 To choose an inventory policy that will provide
good customer service at a reasonable cost.
 A model is developed that relates two output
measures, total inventory cost and the service
level,
 Probabilistic inputs: product demand and delivery
lead time from vendors,
 Controllable inputs: the order quantity and the
reorder point.
 Traffic Flow
 To determine how installing a left turn signal will
affect the flow of traffic through a busy
intersection.
 A model is developed that relates waiting time for
vehicles to get through the intersection.
 Probabilistic inputs : number of vehicle arrivals
and the fraction that want to make a left turn
 Controllable inputs: the length of time the left
turn signal is on.
 Waiting Lines
 To determine the waiting times for customers
requesting service from a facility, such as
customers phoning a call center.
 A model is developed that relates customer
waiting times
 Probabilistic inputs: customer arrivals and service
times
 Controllable input: the number of servers
 Risk Analysis
 the process of predicting the outcome of a
decision in the face of uncertainty (development
of new product)
 What- If Analysis
 Probabilistic inputs : direct labor cost, parts cost,
and first-year demand
 computing the resulting value for the output:
profit
PORTACOM PROJECT
 Selling price: $249 per unit
 Administrative cost: $400,000
 Advertising cost: $600,000
 PortaCom Profit Model

 Profit= (249- C1-C2) X – 1,000,000


 C1 Direct labor/unit ($45)
 C2 Parts Cost/unit ($90)
 X First Year Demand (15,000)

 Profit= (249-45-90) 15,000-1000000= 710000


 Worst- Case Scenario
 Highest value range of Labor and Part Cost
 Lowest value range of first year demand
Profit= (249-47-100) 1500-1000000= 847,000

 Best- Case Scenario


 Lowest value range of Labor and Part Cost
 Highest value range of first year demand
Profit= ( 249- 43- 80) 28,500- 1000000= 2,591,000
Thank you!

You might also like