EEEQ 337 Page 1

SIMULATION AND MODELLING

WHAT IS MODELING?
Modeling is theprocess of producingamodel; amodel is arepresentation of theconstruction
and working of somesystemof interest. A model is similar tobut simpler than thesystemit
represents. Onepurposeof a model is to enabletheanalyst to predict theeffect of changes to
thesystem. On theonehand, amodel should beacloseapproximation tothereal systemand
incorporatemost of its salient features. On theother hand, it should not beso complex that it
is impossibleto understand and experiment with it. A good model is ajudicious tradeoff
between realismand simplicity. Simulation practitioners recommend increasing the
complexity of amodel iteratively. An important issuein modeling is model validity. Model
validation techniques includesimulating themodel under known input conditions and
comparing model output with systemoutput.

Generally, amodel intended for asimulation study is amathematical model developed with
thehelp of simulation software. Mathematical model classifications includedeterministic
(input and output variables arefixed values) or stochastic (at least oneof theinput or output
variables is probabilistic); static (timeis not taken into account) or dynamic (time-varying
interactions among variables aretaken into account). Typically, simulation models are
stochastic and dynamic.
WHAT IS SIMULATION?
A simulation of a systemis theoperation of amodel of thesystem. Themodel can be
reconfigured and experimented with; usually, this is impossible, too expensiveor impractical
to do in thesystemit represents. Theoperation of themodel can bestudied, and hence,
properties concerning thebehavior of theactual systemor its subsystemcan beinferred. In its
broadest sense, simulation is atool to evaluatetheperformanceof a system, existing or
proposed, under different configurations of interest and over long periods of real time.
Simulation is used beforean existing systemis altered or anew systembuilt, to:
Reducethechances of failureto meet specifications
Eliminateunforeseen bottlenecks
To prevent under or over-utilization of resources
Optimizesystemperformance
For instance, simulation can beused to answer questions like: What is thebest design for a
new telecommunications network? What aretheassociated resourcerequirements? How will
atelecommunication network performwhen thetraffic load increases by 50%? How will a
new routing algorithmaffect its performance? Which network protocol optimizes network
performance? What will betheimpact of a link failure?
Thesubject of this tutorial is discreteevent simulation in which thecentral assumption is that
thesystemchanges instantaneously in responseto certain discreteevents. For instance, in an
EEEQ 337 Page 2

M/M/1 queue- asingleserver queuing process in which timebetween arrivals and service
timeareexponential - an arrival causes thesystemto changeinstantaneously. On theother
hand, continuous simulators, likeflight simulators and weather simulators, attempt to
quantify thechanges in asystemcontinuously over timein responseto controls. Discrete
event simulation is less detailed (coarser in its smallest timeunit) than continuous simulation
but it is much simpler toimplement, and hence, is used in awidevariety of situations.
Figure1 is aschematic of a simulation study. Theiterativenatureof theprocess is indicated
by thesystemunder study becoming thealtered systemwhich then becomes thesystemunder
study and thecyclerepeats. In asimulation study, human decision making is required at all
stages, namely, model development, experiment design, output analysis, conclusion
formulation, and making decisions toalter thesystemunder study. Theonly stagewhere
human intervention is not required is therunning of thesimulations, which most simulation
softwarepackages performefficiently. Theimportant point is that powerful simulation
softwareis merely a hygienefactor - its absencecan hurt asimulation study but its presence
will not ensuresuccess. Experienced problemformulators and simulation modelers and
analysts areindispensablefor a successful simulation study.


Thesteps involved in developing asimulation model, designing asimulation experiment, and
performing simulation analysis are:


EEEQ 337 Page 3

Step 1. Identify theproblem.
Step 2. Formulatetheproblem.
Step 3. Collect and process real systemdata.
Step 4. Formulateand develop amodel.
Step 5. Validatethemodel.
Step 6. Document model for futureuse.
Step 7. Select appropriateexperimental design.
Step 8. Establish experimental conditions for runs.
Step 9. Performsimulation runs.
Step 10. Interpret and present results.
Step 11. Recommend further courseof action.

Although this is alogical ordering of steps in asimulation study, many iterations at various
sub-stages may berequired beforetheobjectives of asimulation study areachieved. Not all
thesteps may bepossibleand/or required. On theother hand, additional steps may haveto be
performed. Thenext threesections describethesesteps in detail.
HOW TO DEVELOP A SIMULATION MODEL

Simulation models consist of thefollowingcomponents: systementities, input variables,
performancemeasures, and functional relationships. For instancein a simulation model of an
M/M/1 queue, theserver and thequeuearesystementities, arrival rateand servicerateare
input variables, mean wait timeand maximumqueuelength areperformancemeasures, and
'timein system=wait time+servicetime' is an exampleof afunctional relationship. Almost
all simulation softwarepackages provideconstructs tomodel each of theabovecomponents.
Modeling is arguably themost important part of asimulation study. Indeed, asimulation
study is as good as thesimulation model. Simulation modeling comprises thefollowing steps:

Step 1. Identify the problem. Enumerateproblems with an existing system. Produce
requirements for aproposed system.

Step 2. Formulate the problem. Select theboundsof thesystem, theproblemor apart thereof,
to bestudied. Defineoverall objectiveof thestudy and afew specific issues to beaddressed.
Defineperformancemeasures - quantitativecriteriaon thebasis of which different system
configurations will becompared and ranked. Identify, briefly at this stage, theconfigurations
of interest and formulatehypotheses about systemperformance. Decidethetimeframeof the
study, i.e., will themodel beused for aone-timedecision (e.g., capital expenditure) or over a
period of timeon aregular basis (e.g., air traffic scheduling). Identify theend user of the
simulation model, e.g., corporatemanagement versus aproduction supervisor. Problems must
beformulated as precisely as possible.

Step 3. Collect and process real system data. Collect dataon systemspecifications (e.g.,
bandwidth for acommunication network), input variables, as well as performanceof the
existing system. Identify sources of randomness in thesystem, i.e., thestochastic input
variables. Select an appropriateinput probability distribution for each stochastic input
variableand estimatecorresponding parameter(s).

Softwarepackages for distribution fitting and selection includeExpertFit, BestFit, and add-
ons in somestandard statistical packages. Theseaids combinegoodness-of-fit tests, e.g.,
2

EEEQ 337 Page 4

test, Kolmogorov-Smirnov test, and Anderson-Darling test, and parameter estimation in a
user friendly format.

Standard distributions, e.g., exponential, Poisson, normal, hyperexponential, etc., areeasy to
model and simulate. Although most simulation softwarepackages includemany distributions
as astandard feature, issues relating to randomnumber generators and generating random
variates fromvarious distributions arepertinent and should belooked into. Empirical
distributions areused when standard distributions arenot appropriateor do not fit the
availablesystemdata. Triangular, uniformor normal distribution is used as afirst guess when
no dataareavailable.

Step 4. Formulate and develop a model. Developschematics and network diagrams of the
system(How do entities flow through thesystem?). Translatetheseconceptual models to
simulation softwareacceptableform. Verify that thesimulation model executes as intended.
Verification techniques include traces, varying input parameters over their acceptable
range and checking the output, substituting constants for random variables and
manually checking results, and animation.

Step 5. Validate the model. Comparethemodel's performanceunder known conditions with
theperformanceof thereal system. Performstatistical inferencetests and get themodel
examined by systemexperts. Assess theconfidencethat theend user places on themodel and
address problems if any. For major simulation studies, experienced consultants advocatea
structured presentation of themodel by thesimulation analyst(s) beforean audienceof
management and systemexperts. This not only ensures that themodel assumptions are
correct, completeand consistent, but also enhances confidencein themodel.

Step 6. Document model for future use. Document objectives, assumptions and input
variables in detail.

HOW TO DESIGN A SIMULATION EXPERIMENT

A simulation experiment is atest or aseries of tests in which meaningful changes aremadeto
theinput variables of a simulation model so that wemay observeand identify thereasons for
changes in theperformancemeasures. Thenumber of experiments in asimulation study is
greater than or equal to thenumber of questions being asked about themodel (e.g., Is therea
significant differencebetween themean delay in communication networks A and B?, Which
network has theleast delay: A, B, or C? How will anew routing algorithmaffect the
performanceof network B?). Design of a simulation experiment involves answering the
question: what dataneed to beobtained, in what form, and how much? Thefollowing steps
illustratetheprocess of designing a simulation experiment.

Step 7. Select appropriate experimental design. Select aperformancemeasure, afew input
variables that arelikely to influenceit, and thelevels of each input variable. Document the
experimental design.

Step 8. Establish experimental conditions for runs. Address thequestion of obtaining accurate
information and themost information fromeach run. Determineif thesystemis stationary
(performancemeasuredoes not changeover time) or non-stationary (performancemeasure
changes over time). Generally, in stationary systems, steady-statebehavior of theresponse
EEEQ 337 Page 5

variableis of interest. Ascertain whether aterminating or anon-terminating simulation run is
appropriate. Select therun length. Select appropriatestarting conditions (e.g., empty and idle,
fivecustomers in queueat time0). Select thelength of thewarm-up period, if required.
Decidethenumber of independent runs - each run uses adifferent randomnumber stream
and thesamestarting conditions - by considering output datasamplesize. Samplesizemust
belargeenough (at least 3-5 runs for each configuration) to providetherequired confidence
in theperformancemeasureestimates. Alternately, usecommon randomnumbers to compare
alternativeconfigurations by using a separaterandomnumber streamfor each sampling
process in aconfiguration. Identify output datamost likely to becorrelated.

Step 9. Perform simulation runs. Performrunsaccordingto steps 7-8 above.

HOW TO PERFORM SIMULATION ANALYSIS

Most simulation packages providerun statistics (mean, standard deviation, minimumvalue,
maximumvalue) on theperformancemeasures, e.g., wait time(non-timepersistent statistic),
inventory on hand (timepersistent statistic). Let themean wait timein an M/M/1 queue
observed fromn runs beW1 ,W2 ,...,Wn . It is important to understand that themean wait time
W is arandomvariableand theobjectiveof output analysis is to estimatethetruemean of W
and to quantify its variability.

Notwithstanding thefacts that thereareno data collection errors in simulation, theunderlying
model is fully known, and replications and configurations areuser controlled, simulation
results aredifficult tointerpret. An observation may bedueto systemcharacteristics or just a
randomoccurrence. Normally, statistical inferencecan assess thesignificanceof an observed
phenomenon, but most statistical inferencetechniques assumeindependent, identically
distributed (iid) data. Most types of simulation dataareautocorrelated, and hence, do not
satisfy this assumption. Analysis of simulation output dataconsists of thefollowing steps.

Step 10. Interpret and present results. Computenumerical estimates (e.g., mean, confidence
intervals) of thedesired performancemeasurefor each configuration of interest. To obtain
confidenceintervals for themean of autocorrelated data, thetechniqueof batch means can be
used. In batch means, original contiguous dataset froma run is replaced with a smaller data
set containingthemeans of contiguous batches of original observations. Theassumption that
batch means areindependent may not always betrue; increasing total samplesizeand
increasing thebatch length may help.

Test hypotheses about systemperformance. Construct graphical displays (e.g., piecharts,
histograms) of theoutput data. Document results and conclusions.

Step 11. Recommend further course of action. This may includefurther experiments to
increasetheprecision and reducethebias of estimators, to performsensitivity analyses,
optimization, etc.


EEEQ 337 Page 6

AN EXAMPLE
A machineshop contains two drills, onestraightener, and onefinishing operator.
Figure2 shows aschematic of themachineshop. Two types of parts enter themachine
shop.






Type1 parts requiredrilling, straightening, and finishing in sequence. Type2 parts require
only drilling and finishing. Thefrequency of arrival and thetimeto berouted to thedrilling
areaaredeterministic for both types of parts.
Step 1. Identify the problem. Theutilization of drills, straightener, and finishing operator
needs to beassessed. In addition, thefollowing modification to theoriginal systemis of
interest: thefrequency of arrival of both parts is exponential with thesamerespectivemeans
as in theoriginal system.
Step 2. Formulate the problem. Theobjectiveis toobtain theutilization of drills, straightener,
and finishingoperator for theoriginal system and themodification. Theassumptions include:
Thetwo drills areidentical
Thereis no material handling timebetween thethreeoperations.
Machineavailability implies operator availability.
Parts areprocessed on aFIFO basis.
All times arein minutes.
Step 3. Collect and process real system data. At thejob shop, aType1 part arrives every 30
minutes, and a Type2 part arrives every 20 minutes. It takes 2 minutes to routeaType1 part
and 10 minutes to routeaType2 part to thedrilling area. Parts wait in a queuetill oneof the
two drilling machines becomes available. After drilling, Type1 parts arerouted to the
straightener and Type2 parts arerouted to thefinishing operator. After straightening, Type1
parts arerouted to thefinishing operator.
EEEQ 337 Page 7

Theoperation times for either part weredetermined to beas follows. Drilling timeis
normally distributed with mean 10.0 and standard deviation 1.0. Straightening timeis
exponentially distributed with amean of 15.0. Finishing requires 5 minutes per part.
Step 4. Formulate and develop a model. A model of thesystemand themodification was
developed using asimulation package. A traceverified that theparts flowed through thejob
shop as expected.
Step 5. Validate the model. Theutilization for asufficiently long run of theoriginal system
was judged to bereasonableby themachineshop operators.
Step 6. Document model for future use. Themodels of theoriginal systemand the
modification weredocumented as thoroughly as possible.
Step 7. Select appropriate experimental design. Theoriginal systemand themodification
described abovewerestudied.
Step 8. Establish experimental conditions for runs.
Each model was run threetimes for 4000 minutes and statistical registers werecleared at time
1000, so thestatistics below werecollected on thetimeinterval [1000, 4000]. At the
beginning of asimulation run, therewereno parts in themachineshop.
Step 9. Perform simulation runs. Runs wereperformed as specified in Step 8 above.
Step 10. Interpret and present results. Table1contains theutilization statistics of thethree
operations for theoriginal systemand themodification (in parentheses).

Mean utilization represents thefraction of timea server is busy, i.e., busy time/total time.
Furthermore, theaverageutilization output for drilling must bedivided by thenumber of
drills in order to get theutilization per drill. Each drill is busy about 40% of thetimeand
straightening and finishing operations arebusy about half thetime. This implies that for the
given work load, thesystemis underutilized. Consequently, theaverageutilization did not
changesubstantially between theoriginal systemand themodification; thestandard deviation
of thedrilling operation seems to haveincreased becauseof theincreased randomness in the
modification. Thestatistical significanceof theseobservations can bedetermined by
computing confidenceintervals on themean utilization of theoriginal and modified systems.
Step 11. Recommend further course of action. Other performancemeasures of interest may
be: throughput of parts for thesystem, mean timein systemfor both types of parts, average
and maximumqueuelengths for each operation. Other modifications of interest may be: the
flow of parts to themachineshop doubles, thefinishing operation will berepeated for 10% of
theproducts on aprobabilistic basis.



EEEQ 337 Page 8

HOW TO SELECT SIMULATION SOFTWARE

Although a simulation model can be built using general purpose programming
languages which arefamiliar to theanalyst, availableover a widevariety of platforms,
and less expensive, most simulation studies today areimplemented using asimulation
package. Theadvantages arereduced programming requirements; natural framework for
simulation modeling; conceptual guidance; automated gathering of statistics; graphic
symbolismfor communication; animation; and increasingly, flexibility to change the
model. Naturally, the question of how to select the best simulation software for an
application arises. Metrics for evaluation include modeling flexibility, ease of use,
modeling structure (hierarchical v/s flat; object-oriented v/s nested), code reusability,
graphic user interface, animation, dynamic business graphics, hardware and software
requirements, statistical capabilities, output reports and graphical plots, customer
support, and documentation.
The two types of simulation packages are simulation languages and application-
oriented simulators. Simulation languages offer more flexibility than the application-
oriented simulators. On the other hand, languages require varying amounts of
programming expertise. Application-oriented simulators are easier to learn and have
modeling constructs closely related to the application. Most simulation packages
incorporateanimation which is excellent for communication and can beused to debug
thesimulation program; a"correct looking" animation, however, is not aguaranteeof a
valid model. Moreimportantly, animation is not asubstitutefor output analysis.