SIMULATION

Definition:
Simulation is the process of designing a model of a real system and
conducting experiments with the model for the purpose of
understanding the behavior for the operation of the system.
It is an appropriate substitution for mathematical evaluation of a model
in many situations. The use of simulation enables us to provide insights
to certain management problem where mathematical evaluation of a
model is not possible.

ADVANTAGES:-
Simulation technique is ability to solve the most difficult problems
which are impossible to handle by using other methods.
It helps the analyst to experiment with the system behavior without
disturbing the characters of real system.
It enables the managers to study the long effects in a quick manner.
Simulation does not represent a methodology for the derivation of
optimum solution but it is often used to test purposed analytical
solution.
One we develop the model it may be used again & again of many
situations.
Once an experiment is conducted we can generate data for further
analysis.
Simulation models are widely used to conducting sampling experiments
on the real system.
Model can be modified to accommodate the changing environment of
real system.
A complex system can be divided into sub systems and study each
system individual or jointly.
Simulation do not interfere the real world system because it is based on
experiment and model.
Results can be made by one model only, so saves time and increase
customer satisfaction.
Sometime, it is the last report to solve the impossible problems when
we are enable to observe the actual environments on the planet,
simulation may be needed.

DEMERTS:-

Simulation is not precise and it does not yield an answer but provides a
set of system in different conditions.
Developing a simulation model can be very expensive.
Simulation does not generate optimal solution to the problem as it is
trail & error approach and produce different solution of a problem.
Each solution model is unique and its solution and interference can not
be transfer to other problem.
Solution method of simulation model is not as efficient as other
quantitative methods.
Each application of simulation is adhoc to a great extent which
indicates that simulation does not required standard probability
distribution.

MONTE CARLO TECHNIQUE:-

Establishing Probability Distribution

In simulation the value of variables has to be generated. There are
number of variables in real world system that are probabilistic in nature
and that we want to simulate.

Cumulative Probability Distribution:-

From the regular probability distribution we can arrive at the
cumulative probability distribution of every job. Cumulative probability
is sum of the numbers in the probability column added to the previous
cumulative probability.

Setting Random number intervals:-

Simulation has established cumulative probability distribution for each
variable. It requires the generation of a sequence of random numbers.
Random numbers are generated by using digital computers these days.
Using the cumulative probability distribution computed, we can set
intervals of random number for each item.

Generating Random Numbers:-

Random numbers may be generated by seven ways. If the problem is
small, random number may be selected from Random Table. These
random numbers are selected in such a way that each number has an
equal probability. These numbers can be selected from any fashion,
Select the numbers either column-wise , row – wise or diagonal –wise.

Calculate the possible answers and select the best course of action.

NUMERICAL PROBLEMS:-

Q) Over 100 days period, the daily demand of a certain product shows
the following frequency pattern:
Daily 0 1 2 3 4 5
Demand
No of 10 20 40 20 6 4
Days
Using the given data, simulate a ten days sequence of demand values.
Given Random numbers are
67,84.01,77,90,14,15,74,44 and 77.

Q) BB Bakery keeps stock of a popular brand of cake. Previous record of

demand is given as:
Daily 0 10 20 30 40 50
Demand
Prob .01 .20 .15 .50 .12 .02

Consider the following sequence of random numbers

R No :- 48,78,19,51,56,77,15,14,68,09
Using this sequence, simulate the demand for next 10 days.

b) Find stock situation if the baker decides to make 30 cakes every day.
Also estimate the daily aver
age demand on the basis of simulated data.

Q) The Cargo Honda LTD manufactures 150 scooters . The daily

production varies from 146 – 154 with probability as given
Production per day Probability
146 0.04
147 0.09
148 0.12
149 0.14
150 0.11
151 0.10
152 0.20
153 0.12
154 0.08

The finished scooters are arranged in lorry with capacity 150 scooters.
Using following random numbers:
80,81,76,75,64,43,18,26,10,12,65,68,69,61,57
Stimulate
a) Average number of scooters waiting in the factory.
b) Average number of empty space in the lorry.

Q) TK LTD manufactures 30 items per day. The sale of these items with
following probability distribution:-
Sales ( Units) Probability
27 0.10
28 0.15
29 0.20
30 0.35
31 0.15
32 0.05

The production cost and selling price of each units are Rs 40/- and Rs
50/- . Unsold product is to be disposed at loss of Rs 15/- . There is a
penalty of Rs 5/- if demand is not fulfill .
Using Random number 23,99,65,99,95,01,79,11,16,10
Estimate total profit/ loss for the company for the next 10 days.

If the company decides to produce 29 items per day, what is the

advantage or disadvantage t
o the company?

Process to solve simulation (STEPS)

Formulation of Problem

Introduce Important variables

Construct Simulation Model

Validate the Model Modify the models by changing the

data

Designs Experiment
 Perform Simulation

NO

Is Simulation process is complete ?

Select the best course of action