INTRODUCTION TO

SIMULATION
WHAT IS SIMULATION?

 The imitation of the operation of a real-world process or

system over time…
 Most widely used tool (along LP) for decision making
 Usually on a computer with appropriate software
 An analysis (descriptive) tool – can answer what if
questions
 A synthesis (prescriptive) tool – if complemented by other
tools
 Applied to complex systems that are impossible to solve
mathematically
 This course focuses on one form of simulation modelling –
discrete-event simulation modelling.
APPLICATIONS
Systems – facility or process, actual or planned

Examples
Manufacturing facility
Bank operation
Airport operations (passengers, security, planes, crews, baggage)
Transportation/logistics/distribution operation
Hospital facilities (emergency room, operating room, admissions)
Computer network
Freeway system
Business process (insurance office)
Criminal justice system
Chemical plant
Fast-food restaurant
Supermarket
Theme park
Emergency-response system
 SYSTEM
 A set of interacting components or entities operating together
to achieve a common goal or objective.
 Examples:
 A manufacturing system with its machine centres, inventories
, conveyor belts, production schedule, items produced.
 A telecommunication system with its messages, communication
network servers.
 A theme park with rides, workers, …

REAL WORLD SYSTEMS OF INTEREST ARE HIGHLY COMPLEX!!!

WHY & HOW TO STUDY A SYSTEM
Measure/estimate performance
Improve operation
Prepare for failures

System

Experiment with
Experiment a physical model Experiment with a
with the of the system mathematical model
actual system of the system

Mathematical Simulation
IE 325 Analysis
IE 202 IE 324
IE 303
…
 MATHEMATICAL MODEL

 An abstract and simplified representation of a system

 Specifies
 Important components
 Assumptions/approximations about how the system works
 Not an exact re-creation of the original system!
 If model is simple enough, study it with Queueing Theory, Linear
Programming, Differential Equations...
 If model is complex, Simulation is the only way!!!
 GETTING ANSWERS FROM MODELS

ACTUAL SYSTEM
Output Parameters
Operating Policies
• Waiting Times
• Single queue, parallel servers
• System Size
• FIFO (X) (Y) • Utilizations
Input Parameters
• No of servers
• Inter-arrival Time Distribution
MODEL
• Service Time Distributions
Y = f (X)
 STOCHASTIC MODELS
 Randomness or uncertainty is inherent
 Example: Bank with customers and tellers
IE325

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ACTUAL SYSTEM

QUEUEING MODEL
• KEY points
• Stochastic modeling forecasts the probability of
various outcomes under different conditions, using
random variables.
• Stochastic modeling presents data and predicts
outcomes that account for certain levels of
unpredictability or randomness.
• In the financial services sector, planners, analysts, and
portfolio managers use stochastic modeling to
manage their assets and liabilities and optimize their
portfolios.
• The opposite of stochastic modeling is deterministic
modeling, which gives you the same exact results every
time for a particular set of inputs.
• The Monte Carlo simulation is one example of a
stochastic model; it can simulate how a portfolio may
perform based on the probability distributions of
individual stock returns.
CLASSIFICATION OF SIMULATION MODELS

Static (Monte Carlo) Dynamic Systems

Represents the system at a particular point Represents the system behaviour
in time over time
IID observations Continuous Simulation:
• (Stochastic) Differential Equations
• Estimation of p
• Risk Analysis in • Water Level in a Dam
Business Discrete Event Simulation:
• System quantities (state variables)
change with events

• Queueing Systems
• Inventory Systems
 Continuous Simulation
• Definition: In continuous simulation, changes to the system
state occur continuously over time. The model represents
the system using differential equations.
• Characteristics:
• Suitable for processes that change in a smooth
manner.
• Often used to simulate systems in physics,
engineering, and environmental studies.
• Examples include fluid flow, chemical reactions, and
population dynamics.
Discrete Event Simulation
• Definition: Discrete event simulation models systems
where changes occur at specific points in time, triggered by
discrete events.
• Characteristics:
• Focuses on the timing and occurrence of events rather
than continuous changes.
• Ideal for systems like queuing processes,
manufacturing operations, and network traffic.
• Examples include customer arrivals at a service
center, machine breakdowns, and inventory
management scenarios
HOW TO SIMULATE
 By hand
 Buffon Needle and Cross Experiments (see Kelton et al.)
 Spreadsheets
 Programming in General Purpose Languages
 Java
 Simulation Languages
 SIMAN
 Simulation Packages
 Arena

Issue: Modeling Flexibility vs. Ease of Use

 ADVANTAGES OF SIMULATION

 When mathematical analysis methods are not available,

simulation may be the only investigation tool
 When mathematical analysis methods are available, but are
so complex that simulation may provide a simpler solution
 Allows comparisons of alternative designs or alternative
operating policies
 Allows time compression or expansion
DISADVANTAGES OF SIMULATION

 For a stochastic model, simulation estimates the output

while an analytical solution, if available, produces the
exact output
 Often expensive and time consuming to develop
 An invalid model may result with confidence in wrong
results.
 STEPS IN A SIMULATION STUDY

Model
conceptualization N Experimental
o Design

Setting of Yes
Problem objectives Model Yes
formulation and overall translation Verified? Validated? Production runs
project plan and analysis
N
o Yes Yes
Data N More runs?
collection o
N
o
Documentation
Implementation and reporting
 PROBLEM FORMULATION

 A statement of the problem

 the problem is clearly understood by the simulation analyst
 the formulation is clearly understood by the client
SETTING OF OBJECTIVES & PROJECT PLAN

Project Proposal
Determine the questions that are to be answered
Identify scenarios to be investigated
Decision criteria
Determine the end-user
Determine data requirements
Determine hardware, software, & personnel requirements
Prepare a time plan
Cost plan and billing procedure
MODEL CONCEPTUALIZATION

Real World System

Assumed system

Conceptual model

Logical model
 CONCEPTUAL MODEL

 Abstract essential features

 Events, activities, entities, attributes, resources, variables,
and their relationships
 Performance measures
 Data requirements
 Select correct level of details (assumptions)
 LEVELS OF DETAIL

 Low levels of detail may result in lost of information and goals

cannot be accomplished
 High levels of detail require:
 more time and effort
 longer simulation runs
 more likely to contain errors
 Accuracy of the model

Scope & level of details

Cost of model

Scope & level of details

COMPONENTS OF A SYSTEM

 Entity: is an object of interest in the system

 Dynamic objects — get created, move around, change status, affect
and are affected by other entities, leave (maybe)
 Usually have multiple realizations floating around
 Can have different types of entities concurrently

Example: Health Centre

Patients
Visitors
COMPONENTS OF A SYSTEM
Attribute: is a characteristic of all entities, but with a specific
value “local” to the entity that can differ from one entity to another.

Example: Patient

Type of illness,
Age,
Sex,
Temperature,
Blood Pressure
 COMPONENTS OF A SYSTEM

 Resources: what entities compete for

 Entity seizes a resource, uses it, releases it
 Think of a resource being assigned to an entity, rather
than an entity “belonging to” a resource
 “A” resource can have several units of capacity which can
be changed during the simulation

Example: Health Centre

Doctors, Nurses
X-Ray Equipment
 COMPONENTS OF A SYSTEM

Variable: A piece of information that reflects some

characteristic of the whole system, not of specific entities
 Entities can access, change some variables

Example: Health Centre

Number of patients in the system,

Number of idle doctors,
Current time
COMPONENTS OF A SYSTEM

 State: A collection of variables that contains all the

information necessary to describe the system at any time

Example: Health Centre

{Number of patients in the system,

Status of doctors (busy or idle),
Number of idle doctors,
Status of Lab equipment, etc.}
COMPONENTS OF A SYSTEM

 Event: An instantaneous occurrence that changes the state of

the system

Example: Health Centre

Arrival of a new patient,
Completion of service
(i.e., examination)
Failure of medical
equipment, etc.
COMPONENTS OF A SYSTEM

Activity: represents a time period of specified length.

Example: Health Centre

Surgery,
Checking temperature,
X-Ray.
LOGICAL (FLOWCHART) MODEL

 Shows the logical relationships among the elements of the model

2 Departure event
L(t)=L(t)-1
NO YES
B(t)=0 Q(t)> 0 ? Q(t)=Q(t)-1

Generate service &

schedule new departure

L : # of entities in system 3 Collect & update statistics

Q : # of entities in queue TB, TQ, TL, N
B : # of entities in server
 STEPS IN A SIMULATION STUDY

Model
conceptualization N Experimental
o Design

Setting of Yes
Problem objectives Model Yes
formulation and overall translation Verified? Validated? Production runs
project plan and analysis
N
o Yes Yes
Data N More runs?
collection o
N
o
Documentation
Implementation and reporting
DATA COLLECTION & ANALYSIS

 Collect data for input analysis and validation

 Analysis of the data
 Determine the random variables
 Fit distribution functions
STEPS IN A SIMULATION STUDY

Model
conceptualization N Experimental
o Design

Setting of Yes
Problem objectives Model Yes
formulation and overall translation Verified? Validated? Production runs
project plan and analysis
N
o Yes Yes
Data N More runs?
collection o
N
o
Documentation
Implementation and reporting
 MODEL TRANSLATION

 Simulation model executes the logic contained in the flow-chart model

Coding

General Purpose Language Special Purpose Simulation Language/Software

Examples: Examples:

JAVA, C++, Visual BASIC SIMAN, ARENA, EXTEND

ARENA EXAMPLE
JAVA EXAMPLE

public static void main(String argv[])

{
Initialization();

//Loop until first "TotalCustomers" have departed

while (NumberofDepartures < TotalCustomers)
{
Event evt = FutureEventList[0]; //get imminent event
removefromFEL(); //be rid of it
Clock = evt.get_time(); //advance in time
if (evt.get_type() == arrival) ProcessArrival();
else ProcessDeparture();
}

ReportGeneration();
}
 STEPS IN A SIMULATION STUDY

Model
conceptualization N Experimental
o Design

Setting of Yes
Problem objectives Model Yes
formulation and overall translation Verified? Validated? Production runs
project plan and analysis
N
o Yes Yes
Data N More runs?
collection o
N
o
Documentation
Implementation and reporting
VERIFICATION AND VALIDATION

 Verification: the process of determining if the operational

logic is correct.
 Debugging the simulation software

 Validation: the process of determining if the model accurately

represents the system.
 Comparison of model results with collected data from the
real system
VERIFICATION AND VALIDATION

Real World System

VALIDATION Conceptual model

Logical model

VERIFICATION

Simulation model
 STEPS IN A SIMULATION STUDY

Model
conceptualization N Experimental
o Design

Setting of Yes
Problem objectives Model Yes
formulation and overall translation Verified? Validated? Production runs
project plan and analysis
N
o Yes Yes
Data N More runs?
collection o
N
o
Documentation
Implementation and reporting
EXPERIMENTAL DESIGN

 Alternative scenarios to be simulated

 Type of output data analysis (steady-state vs. terminating
simulation analysis)
 Number of simulation runs
 Length of each run
 The manner of initialization
 Variance reduction
ANALYSIS OF RESULTS
 Statistical tests for significance and ranking
 Point Estimation
 Confidence-Interval Estimation
 Interpretation of results
 More runs?
 STEPS IN A SIMULATION STUDY

Model
conceptualization N Experimental
o Design

Setting of Yes
Problem objectives Model Yes
formulation and overall translation Verified? Validated? Production runs
project plan and analysis
N
o Yes Yes
Data N More runs?
collection o
N
o
Documentation
Implementation and reporting
DOCUMENTATION & REPORTING

 Program Documentation
 Allows future modifications
 Creates confidence
 Progress Reports
 Frequent reports (e.g. monthly) are suggested
 Alternative scenarios
 Performance measures or criteria used
 Results of experiments
 Recommendations
IMPLEMENTATION