Monte-Carlo Simulation

for Reliability Engineering

Anil Kumar Ammina

Prateeck Biswas
Reliability Engineering
HCL Technologies
What is Monte Carlo simulation?
Monte Carlo simulation is a method for iteratively evaluating a deterministic
model using sets of random numbers as inputs. This method is often used when
the model is complex, nonlinear, or involves more than just a couple of uncertain
parameters. A simulation can typically involve over 10,000 evaluations of the
model, a task which in the past was only practical using super computers.

A Monte Carlo method is a technique that involves using random numbers and
probability to solve problems

It also furnishes the decision-maker with a range of possible outcomes and the
probabilities they will occur for any choice of action
How Monte Carlo simulation works
Step 1: Create a parametric model, y = f(x1, x2, ..., xq).
Step 2: Generate a set of random inputs, xi1, xi2, ..., xiq.
Step 3: Evaluate the model and store the results as yi.
Step 4: Repeat steps 2 and 3 for i = 1 to n.
Step 5: Analyze the results using histograms, summary statistics,
confidence intervals, etc.

where 0 < R(T) < 1. If we assume that the values of R(T) are uniformly distributed
over the interval between 0 and 1, then we can let U, a uniformly distributed
random number in the same interval, represent R(T).

This equation is valid for any uniform random number U, 0 < U < 1.
Random numbers for other distributions

Simulations can be done using Excel, or software's like @Risk, Crystal Ball
Applications of Monte Carlo Simulation

Product life cycle analysis

R&D estimation
Case Studies
Safety Analysis
Reliability Analysis & Prediction
Drug effectiveness
Resource allocation
Military war games
Cost estimation
Supply chain distribution
Product Pricing
Six Sigma and quality analysis
Case Studies
Thank You