Simulation

Supplement B

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Simulation
Simulation: The act of reproducing the behavior of a system using a model that describes the processes of the system. Time Compression: The feature of simulations that allows them to obtain operating characteristic estimates in much less time than is required to gather the same operating data from a real system. Monte Carlo simulation: A simulation process that uses random numbers to generate simulation events.
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Specialty Steel Products Co.

Example B.1
Specialty Steel Products Company produces items such as machine tools, gears, automobile parts, and other specialty items in small quantities to customer order.

Demand is measured in machine hours.

Orders are translated into required machine-hours.

Management is concerned about capacity in the lathe department. Assemble the data necessary to analyze the addition of one more lathe machine and operator.
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Specialty Steel Products Co.

Example B.1
Historical records indicate that lathe department demand varies from week to week as follows:
Weekly Production Requirements (hr) Relative Frequency

200 250 300 350 400 450 500 550 600

Total
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0.05 0.06 0.17 0.05 0.30 0.15 0.06 0.14 0.02 1.00

Specialty Steel Products Co.

Example B.1
Average weekly production is determined by multiplying each production requirement by its frequency of occurrence.
Weekly Production Requirements (hr) Relative Frequency Average weekly production

requirements = 200(0.05) +
250(0.06) + 300(0.17) + + 600(0.02) = 400 hours

200 250 300 350 400 450 500 550 600

Total
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0.05 0.06 0.17 0.05 0.30 0.15 0.06 0.14 0.02 1.00

Specialty Steel Products Co.

Example B.1
Weekly Production Requirements (hr) 200 250 300 350 400 450 500 550 600 Total Relative Frequency 0.05 0.06 0.17 0.05 0.30 0.15 0.06 0.14 0.02 1.00 Regular Capacity (hr) 320 (8 machines) 360 (9 machines) 400 (10 machines) Relative Frequency 0.30 0.40 0.30

The average number of operating machine-hours in a week is: 320(0.30) + 360(0.40) + 400(0.30) = 360 hours

Average weekly production requirements = 400 hours

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Specialty Steel Products Co.

Weekly Production Requirements (hr)
200 250 300 350 400 450 500 550 600 Total Relative Frequency 0.05 0.06 0.17 0.05 0.30 0.15 0.06 0.14 0.02 1.00 Regular Capacity (hr) 320 (8 machines) 360 (9 machines) 400 (10 machines) Relative Frequency 0.30 0.40 0.30

The average number of operating machine-hours in a week = 360 Hrs.

Experience shows that with 11 machines, the distribution would be:

Average weekly production requirements = 400 hours

Regular Capacity (hr) 360 (9 machines) 400 (10 machines) 440 (11 machines)

Relative Frequency 0.30 0.40 0.30

Example B.1
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Specialty Steel Products Co.

Assigning Random Numbers
Random numbers must now be assigned to represent the probability of each demand event. Random Number: A number that has the same probability of being selected as any other number. Since the probabilities for all demand events add up to 100 percent, we use random numbers between (and including) 00 and 99. Within this range, a random number in the range of 0 to 4 has a 5% chance of selection. We can use this to represent our first weekly demand of 200 which has a 5% probability.
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Specialty Steel Products Co.

Assigning Random Numbers
Random numbers in the range of 0-4 have a 5% chance of occurrence.
Event Weekly Demand (hr) 200 250 300 350 400 450 500 550 600
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Probability 0.05 0.06 0.17 0.05 0.30 0.15 0.06 0.14 0.02

Random numbers in the range of 5-10 have a 6% chance of occurrence.

Random numbers in the range of 11-27 have a 17% chance of occurrence.

Random numbers in the range of 28-32 have a 5% chance of occurrence.

Specialty Steel Products Co.

Assigning Random Numbers
If we randomly choose numbers in the range of 00-99 enough times, 5 percent of the time they will fall in the range of 00-04, 6% of the time they will fall in the range of 05-10, and so forth.
Event Weekly Demand (hr) 200 250 300 350 400 450 500 550 600
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Probability 0.05 0.06 0.17 0.05 0.30 0.15 0.06 0.14 0.02

Random Numbers
0004 0510 1127 2832 3362 6377 7883 8497 9899

Existing Weekly Capacity (hr) 320 360 400

Probability 0.30 0.40 0.30

Random Numbers
0029 3069 7099

Specialty Steel Products Co.

Model Formulation
Formulating a simulation model entails specifying the relationship among the variables. Simulation models consist of decision variables, uncontrollable variables and dependent variables. Decision variables: Variables that are controlled by the decision maker and will change from one run to the next as different events are simulated. Uncontrollable variables are random events that the decision maker cannot control.

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Specialty Steel Products Co.

Example B.2
Simulating a particular capacity level
1. Using the Appendix 2 random number table, draw a random number from the first two rows of the table. Start with the first number in the first row, then go to the second number in the first row. 2. Find the random-number interval for production requirements associated with the random number. 3. Record the production hours (PROD) required for the current week. 4. Draw another random number from row three or four of the table. 5. Find the random-number interval for capacity (CAP) associated with the random number. 6. Record the capacity hours available for the current week.
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Specialty Steel Products Co.

Example B.2
Simulating a particular capacity level 7. If CAP > PROD, then IDLE HR = CAP PROD

8. If CAP < PROD, then SHORT = PROD CAP

If SHORT < 100 then OVERTIME HR = SHORT and SUBCONTRACT HR = 0 If SHORT > 100 then OVERTIME HR = 100 and SUBCONTRACT HR = SHORT 100 9. Repeat steps 1 - 8 until you have simulated 20 weeks.
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Specialty Steel Products Co.

20-week simulation
10 Machines Demand Random Number 71 68 48 99 64 13 36 . . . 37 Weekly Production (hr) 450 450 400 600 450 300 400 . . . 400 Capacity Random Number 50 54 11 36 82 87 41 . . . 19 Existing Weekly Capacity Idle Overtime (hr) Hours Hours 90 90 80 100 50 100 Subcontract Hours

Week 1 2 3 4 5 6 7 . . . 20

360 360 320 360 400 400 360 . . . 320 Total Weekly average

140

. . .
490 24.5

40 . . . 80 830 41.5

. . .
360 18.0

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Specialty Steel Products Co.

1000-week simulation
A steady state occurs when the simulation is repeated over enough time that the average results for performance measures remain constant.
Comparison of 1000-week Simulations 10 Machines Idle hours Overtime hours Subcontract hours Cost 26.0 48.3 18.4 $1,851.50 11 Machines 42.2 34.2 8.7 $1,159.50

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Monte Carlo Simulation

Application B.1
Famous Chamois Car Wash
Car Arrival Distribution (time between arrivals) Famous Chamois is an automated car wash that advertises that your car can be finished in just 15 minutes. The time until the next car arrival is described by the following distribution. Minutes 1 2 3 4 5 6 7
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Probability Minutes Probability 0.01 0.03 0.06 0.09 0.12 0.14 0.14 8 9 10 11 12 13 0.12 0.10 0.07 0.05 0.04 0.03 1.00

Monte Carlo Simulation

Application B.1
Famous Chamois Car Wash: Random Number Assignment

Assign a range of random numbers to each event so that the demand pattern can be simulated.
Minutes Random Numbers Minutes Random Numbers

1
2 3 4 5 6
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0000
0103 0409 1018 1930 3144 4558

8
9 10 11 12 13

59-70
7180 81-87 88-92 9396 9799

Monte Carlo Simulation

Famous Chamois Car Wash: Simulation Simulate the operation for 3 hours, using the following random numbers, assuming that the service time is constant at 6, (:06) minutes per car.
Random Number
50 63 95 49 68
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Time to Arrival
7 ?

Arrival Time
0:07

Number in Drive
0

Service Begins
0:07

Departure Time
0:13

Minutes in System
6

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Computer Simulation
The simulation for Specialty Steel Products demonstrated the basics of simulation.
However it only involved one step in the process, with two uncontrollable variables (weekly production requirements and three actual machine-hours available) and 20 time periods.

Simple simulation models with one or two uncontrollable variables can be developed using Excel, using its random number generator.
More sophisticated simulations can become time consuming and require a computer.
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 2007 Pearson Education

BestCar Auto Dealer Simulation Model

Below is a probability distribution for the number of cars sold weekly at BestCar (See Example B.3).

The selling price per car is $20,000. Design a simulation model that determines the probability distribution and mean of the weekly sales.
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 2007 Pearson Education

Simulation with SimQuick

Simquick is an easy-to-use package that is an Excel spreadsheet with some macros. Lets simulate the passenger security process at one terminal of a medium-sized airport between the hours of 8 A.M. and 10
A.M.

Passengers arrive in a single line and go through one of two inspection stations consisting of a metal detector and a carryon baggage scanner. After this, 10% are randomly selected for an additional inspection handled by one of two stations. Management wants to examine the effects of increasing the number of random inspections to 15% and 20%. They also want to consider a 3rd station for the 2nd inspection
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Flowchart of Passenger Security Process

Entrance Arrivals Buffer Sec. Line 1 Information about each block is entered into Simquick. Other information needed in statistical distribution form: (1) when people arrive, (2) inspection times, & (3) % of passengers randomly selected. Arrivals and inspection times are acquired through observation; % randomly selected is a policy decision

Work St. Insp. 1

Buffer Sec. Line 2 Work St. Add. Insp. 1 Work St. Add. Insp. 2 Buffer Done Dec. Pt. DP

Work St. Insp. 2

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Simulation Results of Passenger Security Process

Element Types
Entrance(s)

Element Names
Door

Statistics

Overall Means
237.23

Objects entering process

Buffer(s)

Line 1

Mean inventory
Mean cycle time

5.97
3.12 0.10

Line 2

Mean inventory

Mean cycle time

Done
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0.53
224.57

Final inventory