Chapter 1

What is Simulation?
Dr. Jason Merrick

Operations Research
A mathematical model is an abstraction of the real
world.
The aim of operations research is to use
mathematical modeling to assist in a decision
making process.
Suppose that a decision maker has to make a
decision concerning changes to an existing
system or the design of a new system.
What options are available to predict the new
systems performance?

What is Simulation?

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What is Simulation?
A simulation is a computer program that imitates, or
simulates, the operations of real world systems or
processes.

Simulation
vs.
Real World

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Simulation Is ...

Very broad term, set of problems/approaches

Generally, imitation of a system via computer
Involves a modelvalidity?
Dont even aspire to analytic solution
Dont get exact results (bad)
Allows for complex, realistic models (good)

Approximate answer to exact problem is better

than exact answer to approximate problem
Consistently ranked as most useful, powerful of
mathematical-modeling approaches
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Some Application Areas

Manufacturingscheduling, inventory
Staffing personal-service operations
Banks, fast food, theme parks, Post Office, ...

Distribution and logistics

Health careemergency, operating rooms
Computer systems
Telecommunications
Military
Public policy
Emergency planning
Courts, prisons, probation/parole

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Maritime Risk Analysis

The Prince William Sound Risk Analysis

Testing alternatives for reducing the risk of

oil spills in an environmentally sensitive area.

The simulation was used to count the

occurrence of risky situations.

For each of these risky situations, the

probability of an oil spill producing accident
was estimated using accident and incident
data and expert judgment.

The simulation allowed non-mathematical

people, such as the oil company presidents,
to understand how alternative operating
procedures could reduce the risk.

What is Simulation?

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Aviation
Used to test the efficiency of
changes to the airspace.
What changes?
The number, length and
capacity of runways.
Changes to baggage handling
procedures.
Changes to flight paths.
Effect of new plane designs.

What does the simulation

count?
Delay times.
Cost of delays.

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Medical Systems

This is a surgical training

simulation.

A virtual human body is

simulated.

The trainee surgeon

performs the surgery
using the type of tools
used in fine surgery.

The program simulates the

reaction of the patient.

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Systems
Physical facility/process, actual or planned
Study its performance
Measure
Improve
Design (if it doesnt exist)
Maybe control in real time

Sometimes possible to play with the system

But sometimes impossible to do so
Doesnt exist
Disruptive, expensive

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Experiment with the Actual System

vs. Experiment with a Model

In some cases it may be possible to physically

change the actual system to see how it will operate
under new conditions.
There is no question of the validity of these results.

However, it is rarely feasible to do this.

In the bank example, if the new system does not operate well
then the bank could lose customers.

By using a model, alternatives may be tested without

the real world consequences.
However, does the model accurately reflect the system for the
purpose of the decisions to be made? Validity and verification.

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Models
Abstraction/simplification of the system used as
a proxy for the system itself
Can try wide-ranging ideas in the model
Make your mistakes on the computer where they dont
count, rather for real where they do count

Issue of model validity

Two types of models
Physical (iconic)
Logical/Mathematical -- quantitative and logical
assumptions, approximations

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Physical Model vs. Mathematical Model

Examples of physical models are
clay cars used to test new car designs in wind tunnels,
airplane simulators used to train pilots or
a mock up of a fast food restaurant in a warehouse with people
hired to be customers (true story!!!).

Again physical models are often found more

credible.
They are hands on and do not have a black box of mathematical
techniques.

However, physical models are often not possible or

not feasible, i.e. too expensive.

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What Do You Do with a Logical Model?

If model is simple enough, use traditional
mathematics (queueing theory, differential
equations, linear programming) to get answers
Nice in the sense that you get exact answers to
the model
But might involve many simplifying assumptions to make the
model analytically tractable -- validity??

Many complex systems require complex models

for validitysimulation needed
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Computer Simulation
Methods for studying a wide variety of models of
real-world systems
Use numerical evaluation on computer
Use software to imitate the systems operations and
characteristics, often over time

In practice, is the process of designing and

creating computerized model of system and
doing numerical computer-based experiments
Real powerapplication to complex systems
Simulation can tolerate complex models
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Popularity
M.S. grads, CWRU O.R. Department (1978)
Asked about value after graduation; rankings:
1. Statistical analysis, 2. Forecasting, 3. Systems analysis, 4.
Information systems, 5. Simulation

137 large firms (1979)

1. Statistical analysis (93% used it)
2. Simulation (84%)
Followed by LP, PERT/CPM, inventory, NLP

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Popularity (contd.)
(A)IIE, O.R. division members (1980)
First in utility and interest: Simulation
But first in familiarity: LP (simulation was second)

Longitudinal study of corporate practice (1983,

1989, 1993)
1. Statistical analysis
2. Simulation

Survey of such surveys (1989)

Consistent heavy use of simulation

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Advantages of Simulation
Flexibility to model things as they are (even if
messy and complicated)
Avoid looking where the light is (a morality play):
Youre walking along in the dark and see someone on hands and knees searching the ground under a street light.
You:
Whats wrong? Can I help you?
Other person:
I dropped my car keys and cant find them.
You:
Oh, so you dropped them around here, huh?
Other person:
No, I dropped them over there. (Points into the darkness.)
You:
Then why are you looking here?
Other person:
Because this is where the light is.

Allows uncertainty, non-stationarity in modeling

The only thing thats for sure: nothing is for sure
Danger of ignoring system variability
Model validity

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Advantages of Simulation (contd.)

Advances in computing/cost ratios
Estimated that 75% of computing power is used for various
kinds of simulations
Dedicated machines (e.g., real-time shop-floor control)

Advances in simulation software

Far easier to use (GUIs)
No longer as restrictive in modeling constructs (hierarchical,
down to C)
Statistical design & analysis capabilities

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The Bad News

Dont get exact answers, only approximations,
estimates
Also true of many other modern methods
Can bound errors by machine roundoff

Get random output (RIRO) from stochastic

simulations
Statistical design, analysis of simulation experiments
Exploit: noise control, replicability, sequential sampling,
variance-reduction techniques
Catch: standard statistical methods seldom work

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Different Kinds of Simulation

Static vs. Dynamic
Does time have a role in the model?

Continuous-change vs. Discrete-change

Can the state change continuously or only at discrete
points in time?

Deterministic vs. Stochastic

Is everything for sure or is there uncertainty?

Most operational models:

Dynamic, Discrete-change, Stochastic

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Different Kinds of Simulation

Static Simulation
Look at a system at a fixed
time or a system that does
not change over time.
e.g. Monte Carlo methods

Deterministic Simulation
No random or uncertain
components.

Continuous Simulation
Looks at the aggregate flow
of the components over
time.

Dynamic Simulation
A representation of a
system as it changes over
time.
e.g. production processes in
a factory.

Stochastic Simulation
Some components have to
be modeled probabilistically.

Discrete Simulation
Events happen at discrete
points in time.

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Simulation by Hand:
The Buffon Needle Problem

Estimate (George Louis Leclerc, c. 1733)

Toss needle of length l onto table with stripes d
(>l) apart
2l
P (needle crosses a line) = d

Repeat; tally
crossed p

= proportion of times a line is

2l

Estimate by pd

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Why Toss Needles?

Buffon needle problem seems silly now, but it has
important simulation features:
Experiment to estimate something hard to compute exactly
(in 1733)
Randomness, so estimate will not be exact; estimate the
error in the estimate
Replication (the more the better) to reduce error
Sequential sampling to control error -- keep tossing until
probable error in estimate is small enough
Variance reduction (Buffon Cross)

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Monte Carlo Simulation

Monte Carlo simulation is a sampling experiment whose purpose is to

estimate the distribution of an outcome variable that depends upon
one or more probabilistic input variables.
For instance, suppose we wished to estimate the profit of a company when
demand for the product and production costs were not known with certainty.

The name comes from the similarity to random sampling in games of

chance such as roulette played in the casinos in Monte Carlo.
Distribution for X+Y

X is Gamma(3,5)
Y is Gamma(5,3)

PROBABILITY

4.4

10.8 19.3 27.8 36.3 44.8 53.3 61.9 70.4 78.9 89.5
X+Y

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Discrete Event Simulation

Also called System Simulation.
Explicitly models sequences of events that occur
at discrete points in time.
A discrete event simulation run consists of
sampling from the time of occurrence of events from
probabilistic input variables,
continually updating the system state by following a set of
rules and
observing the flow of the model over time by counting certain
quantities of interest.

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Using Computers to Simulate

General-purpose languages (FORTRAN)
Tedious, low-level, error-prone
But, almost complete flexibility

Support packages
Subroutines for list processing, bookkeeping, time advance
Widely distributed, widely modified

Spreadsheets
Usually static models
Financial scenarios, distribution sampling, SQC

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Using Computers to Simulate (contd.)

Simulation languages
GPSS, SIMSCRIPT, SLAM, SIMAN
Popular, in wide use today
Learning curve for features, effective use, syntax

High-level simulators
Very easy, graphical interface
Domain-restricted (manufacturing, communications)
Limited flexibilitymodel validity?

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Where Arena Fits In

Level of
Modeling

Common Panel
Many common modeling constructs
Very accessible, easy to use
Reasonable flexibility

Support, Transfer Panels

Access to more detailed modeling for greater
flexibility

Get ease-of-use
advantage of
simulators without
sacrificing modeling
flexibility

Blocks, Elements Panels

All the flexibility of the SIMAN simulation
language

Lower

Professional Edition

Application Solution Templates

Call$im
BP$im
etc.

Standard Edition

Multiple levels of
modeling
Can mix different
modeling levels
together in the same
model
Often, start high then
go lower as needed

A single
graphical user
interface
consistent at
any level of
modeling

Vertical Solutions

Hierarchical structure

Arena Template

User-Created Templates
Commonly used constructs
Company-specific processes
Company-specific templates
etc.

SIMAN Template

Higher

User-Written Visual Basic, C/C++, FORTRAN

Code
The ultimate in flexibility
C/C++/FORTRAN requires compiler

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When Simulations are Used

Uses of simulation have evolved with hardware,
software
The early years (1950s-1960s)
Very expensive, specialized tool to use
Required big computers, special training
Mostly in FORTRAN (or even Assembler)
Processing cost as high as $1000/hour for a sub-286 level
machine

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When Simulations are Used (contd.)

The formative years (1970s-early 1980s)
Computers got faster, cheaper
Value of simulation more widely recognized
Simulation software improved, but they were still languages
to be learned, typed, batch processed
Often used to clean up disasters in auto, aerospace
industries
Car plant; heavy demand for certain model
Line underperforming
Simulated, problem identified
But demand had dried upsimulation was too late

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When Simulations are Used (contd.)

The recent past (late 1980s)
Microcomputer power
Software expanded into GUIs, animation
Wider acceptance across more areas
Traditional manufacturing applications
Services
Health care
Business processes

Still mostly in large firms

Often a simulation is part of the specs

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When Simulations are Used (contd.)

The present
Proliferating into smaller firms
Becoming a standard tool
Being used earlier in design phase
Real-time control

The future
Exploiting interoperability of operating systems
Specialized templates for industries, firms
Automated statistical design, analysis

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