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2. Outline:
 Definition of Simulation
 Advantages
 Disadvantages
 Process
 Applications
 Types
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3. Simulation- Meaning:
Simulation is a process of designing a model of real
system.
conducting experiments with this model.
purpose of understanding the behavior for the
operation of the system.
“ to assume the mere appearance of ,without the
reality”
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4. DEFINITION:
“Simulation is the process of designing
a model of a real system and conducting
experiments with this model for the
purpose of either understanding the
behavior of the system and/or
evaluating various strategies for the
operation of the system.”
E.G.:
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5. SIMULATION MODEL
REAL MODEL
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6. Advantages to Simulation:
Simulation’s greatest strength
Is its ability to answer
“what if” questions...
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7. Estimates the performance of existing system. ?
Maintain much better control.
Allows to study a system with long time frame.
Useful for sensitivity analyses.
Used as pre-test to try new policies and decision
rule.
Allows us to control time.
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8. Simulation is not
without its drawbacks...
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9. Disadvantages:
 Some simulation may take longer
period of time to develop.
Produce different result in repeated
run.
Does not generate optimal solution.
User has to provide all constraint.
Simulation results are sometimes hard
to interpret.
Simulation analysis can be time
consuming and expensive.
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10. FORMULATE THE PROBLEM AND PLAN THE STUDY
P
COLLECT THE DATA AND DEVELOP THE SIMULATION MODEL
R
O CHECK THE ACCURACY OF THE SIMULATION MODEL
C SELECT THE SOFTWARE AND CONSTRUCT A COMPUTER
PROGRAM
E TEST THE VALIDITY OF THE SIMULATION MODEL
S PLAN THE SIMULATION TO BE PERFORMED
S CONDUCT THE SIMULATION AND ANALYSE THE RESULTS
PRESENT RECOMMENDATION TO MANAGEMENT
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11. APPLICATIONS OF SIMULATION:
1>NEW PRODUCT DEVELOPMENT:
DETERMINE THAT NEW PRODUCT IS PROFITABLE?
MODEL WILL BE DEVELOPED.
POSSIBLE VALUES ARE GENERATED USING
SIMULATION MODEL.
2>AIRLINE RESERVATION:
DETERMINE THE NUMBER OF RESERVATION AN
AIRLINE SHOULD ACCEPT FOR A PARTICULAR FLIGHT.
SIMULATION MODEL IS DEVELOPED BASED ON
NUMBER OF PASSENGER AND SHOW UP RESULTING
PROFIT.
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12. 3>DESIGN AND OPERATION OF
MANUFACTURING SYSTEMS:
IN SCHEDULING JOBS IF SOME COMPLICATIONS
OCCURS SUCH AS BREAKDOWNS,DEFECTIVE ITEMS ETC.
SUCH COMPLICATIONS ARE NO PROBLEM FOR
SIMULATION.
4>DESIGN AND OPERATION OF DISTRIBUTING
SYSTEMS:
UNCERTANTIES MAY ARISE IN TRANSPORTATION OF
GOODS FROM MANUFACTURER TO CONSUMERS,BY
GENERATING RANDOM RELEVANT PROBABILITY
DISTRIBUTION,SIMULATION CAN DEAL WITH THESE
UNCERTANITIES.
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13. 5>FINANCIAL RISK ANALYSIS:
E.G.:EVALUATION OF PROPOSED CAPITAL
INVESTMENT WITH UNCERTAIN FUTURE CASH
FLOWS,SIMULATION CAN GENERATE THOUSANDS
OF ALTERNATIVE SOLUTION FOR HOW THE
INVESTMENT WILL TURNOUT.
6>HEALTH CARE APPLICATIONS:
EVALUATION OF RISKY INVESTMENT AND
ANALYSIS OF FUTURE UNCERTAINTIES.
UNCERTAINTIES SUCH AS EVOLUTION OF HUMAN
DISEASES ARE ALSO DETERMINED USING
SIMULATION.
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14. TYPES OF SIMULATION:
1>PROBABILISTIC SIMULATION:
IN THIS ONE OR MORE INDEPENDENT VARIABLE
FOLLOW A CERTAIN PROBABILITY DISTRIBUTION.IT
HAS TWO SUBCATEGORIES
1)DISCRETE DISTRIBUTION:LIMITED EVENTS
2)CONTINUOUS DISTRIBUTION:UNLIMITED EVENTS
2>TIME DEPENDENT AND TIME INDEPENDENT
SIMULATION:
WHEN IT IS NOT IMPORTANT TO KNOW WHEN EVENT
OCCURRED IS “TIME INDEPENDENT” AND WHEN
NECESSARY TO KNOW PRECISE TIME-- TIME DEPENDENT
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15. 3>VISUAL SIMULATION:
IT IS ALSO KNOWN AS VISUAL INTERACTIVE
SIMULATION(V.I.S).IT USES COMPUTER GRAPHIC
DISPLAY TO PRESENT THE IMPACT OF VARIOUS
MANAGERIAL DECISION.
4>BUSINESS GAMES:
THESE ARE COMPETITIVE DECISION MAKING
INVOLVING PROBABILISTIC SIMULATION.
5>LARGE SYSTEM SIMULATION:
SIMULATION MAY BE APPLIED IN CORPORATE
PLANNING,ESPECIALLY THE FINANCIAL
ASPECTS(BOTH SHORT AND LONG TERM).
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And the list goes on and on...

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