Introduction To Simulation

Industrial Engineering Department
Introduction to Simulation
Week-1
Modeling&Simulation-IW-2007
What is Simulation?
The Oxford American Dictionary (1980):
Simulation is a way to reproduce the conditions of a

situation, as by means of a model, for study or testing or
training, etc.
For our purposes, we are interested in reproducing the

operational behavior of dynamic systems.
The model that will be using is a computer model.
Simulation can be defined as the imitation of a
dynamic system using a computer model.
What simulation
Schriber (1987)
Simulation is the modeling of a process or

system in such a way that the model mimics the
response of the actual system to events that take
place over time.
By studying the behavior of the model, insight

about the behavior of the actual system can be
gained.
In practice,
Simulation is performed using commercial

simulation software.
Performance statistics are gathered during the
simulation
Modern simulation software provides a realistic,
graphical animation of the system being modeled.
During the simulation, the user can interactively
adjust the animation speed and change model
parameter values to do what-if analysis on the
fly.
State-of-the art simulation technology provides
optimization capability
Shortly,
Simulation is the imitation of a dynamic system

using a computer model in order to evaluate and
improve system performance.
This lecture focuses primarily on discreteevent simulation, which models the effects of
the events in a system as they occur over time.
A discrete-event simulation is one in which
changes in the state of the simulation model
occur at discrete points in time as triggered
events.
Ex : arrival of customer at the ATM machine.
Discrete-event simulation employs statistical

methods for generating random behavior and
estimating model performance.
These methods are sometimes referred to as
Monte Carlo methods because of their
similarity to the probabilistic outcomes found
in games of chances.
Why Simulate?
Simulation provides a way to validate whether or not

the best decisions are being made.
Simulation avoid the expensive, time-consuming, and
disrupted nature of traditional trial-and-error
techniques.
The power of simulation lies in the fact that it
provides a method of analysis that is not only formal
and predictive, but is capable of accurately predicting
the performance of a system.
By using a computer to model a system before it is
built or to test operating policies before they are
actually implemented, many of the pitfalls can be
avoided
The characteristics of simulation that make it such a

powerful planning and decision-making tool:
captures system interdependence

accounts for variability in the system
is versatile enough to model any system
shows behavior over time
is less costly, time-consuming, and disruptive that
experimenting on the actual system
provides information on multiple performance measures
is visually appealing and engages peoples interest
provides results that are easy to understand and
communicate
runs in compressed, real, or even delayed time
forces attention to detail in a design
Doing Simulation
Simulation is nearly always performed as a part of a

larger process of system design or process
improvement.
Alternative solutions are generated and evaluated,
and the best solution is selected and implemented.
Simulation comes into play during the evaluation
phase.
Simulation is an experimentation tool in which a
computer model of a new or existing system is
created for the purpose of conducting experiments.
10
11
Doing Simulation
Simulation provides a virtual method for doing
system experimentation
12
Doing Simulation .
Doing simulation talks about the process of

designing a model of a real system and
conducting experiments with this model.
Conducting experiments on a model reduces
the time, cost, and disruption of experimenting
on the actual system.
Simulation is a virtual prototyping tool for

demonstrating proof of concept.
13
Doing Simulation ..
The procedure for doing simulation follows

the scientific method of:
formulating a hypothesis,
setting up an experiment,
testing the hypothesis through experimentation
drawing conclusions about the validity of the
hypothesis.
14
The process of
simulation experimentation
START
START
FORMULATE
FORMULATEAAHYPOTHESIS
HYPOTHESIS
DEVELOP
DEVELOPAASIMULATION
SIMULATION
MODEL
MODEL
RESUME
RESUMEAASIMULATION
SIMULATION
EXPERIMENT
EXPERIMENT
STOP
STOP
YES
HYPOTHESIS
HYPOTHESIS
CORRECT?
CORRECT?
NO
15
Use of Simulation
Simulation began to be used in commercial

applications in 1960s.
Initial models were usually programmed in

FORTRAN.
Only in the last couple of decades has

simulation gained popularity as a decisionmaking tool in manufacturing and service
industries
16
Use of Simulation
The surge in popularity of computer

simulation:
Increased awareness and understanding of

simulation technology.
Increased availability, capability, and ease of use
of simulation software.
Increased computer memory, processing speeds,
especially of PCs.
Declining computer hardware and software costs.
17
Typical Applications of Simulation
Work-flow planning
Capacity planning
Cycle time reduction
Staff and resource planning
Work prioritization
Bottleneck analysis
Quality improvement
Cost reduction
Inventory reduction
Throughput analysis
Productivity improvement
Layout analysis
Line balancing
Batch size optimization
Production scheduling
Resource scheduling
Maintenance scheduling
Control system design
18
When Simulation is Appropriate
Not all system problems that could be solved

with the aid of simulation should be solved
using simulation.
It is important to select the right tool for the
task.
Simulation has certain limitations of which
one should be aware before making a decision
to apply it to a given situation.
19
When Simulation is Appropriate ..
As a general guideline, simulation is appropriate if
An operational (logical or quantitative) decision is being

made.
The process being analyzed is well defined and repetitive.
Activities and events are interdependent and variable.
The cost impact of the decision is greater than the cost of
doing the simulation.
The cost of experiment on the actual system is greater
than the cost of simulation.
20
Qualification for Doing Simulation
Participants in the simulation project include modeler,

decision maker, and process owner.
A certain degree of knowledge and skill:
Project management
Communication
System engineering
Statistical analysis and design of experiments
Modeling principles and concepts
Basic programming and computer skills
Training on one or more simulation products
Familiarity with the system being investigated
21
Economic Justification of Simulation
Cost is always important issues when considering the

use of any software tool and simulation is no
exception.
Simulation should not use if the cost exceeds the
expected benefits.
This means that both the costs and the benefits should
be carefully assessed.
The use of simulation is often prematurely dismissed
due to the failure to recognize the potential benefits
and savings it can produce.
22
Savings from simulation are realized by identifying

and eliminating problems and inefficiencies.
Cost is reduced by eliminating overdesign and
removing excessive safety factors.
One of the difficulties in developing an economic
justification for simulation is the fact that it is usually
not known in advance how much savings will be
realized.
One way to assess in advance the economic benefit of
simulation is to assess the risk of making poor design
and operational decisions.
23
Economic Justification of Simulation
The real savings from a simulation come from

allowing to make mistake and work out design
errors on the model rather than on the actual
system.
Simulation helps avoid many of the
downstream costs associated with poor
decision that are made up front.
24
Cost of making changes at subsequent stages

of system development
25
Comparison of cumulative system costs with

and without simulation
26
Industrial Engineering Department
System Approach
Week 1 part 2
27
System Definition
A system is defined as a collection of elements

that function together to achieve a desired goal.
Key points include:
A system consists of multiple elements.

These elements are interrelated and work in
cooperation.
A system exists for the purpose of achieving
specific objectives.
28
Examples of systems:
Traffic systems
Political systems
Economic systems
Manufacturing systems
Service systems
Main focus of our subject
manufacturing and service systems that process

materials, information, and people.
29
Manufacturing System
Manufacturing systems:
Small job shops

Machining cells
Large production facilities
Assembly lines
Warehousing
Distribution
Supply chain systems
30
Service System
Service systems:
Health care facilities

Call centers
Amusement parks
Public transportation systems
Restaurant
Bank
etc
31
Both manufacturing and service systems may

be termed processing systems.
They process items through a series of activities..
Processing systems:
Artificial (human-made)
Dynamic (elements interact overtime)
Usually stochastic (they exhibit random behavior)
32
System Elements
From a simulation perspective, a system

consists of entities, activities, resources,
controls.
The elements define the who, what, where,
when, and how of entity processing.
33
System : Input-Output Box
34
Entities
Items processed through the system such as products,

customers, and documents.
Divided into:
human or animate (customers, patients, etc.)

Inanimate (parts, documents, bins, etc.)
Intangible (calls, electronic mail, etc.)
[For most manufacturing and service systems] discrete

items.
[For some production systems: continuous systems]
nondiscrete substance
Example: oil refineries, paper mills

35
Activities
The tasks performed in the system (directly or

indirectly) in the processing of entities.
Servicing a customer
cutting a part on machine
repairing a piece of equipment
Consume time and often involve the use of resources

Classified as
entity processing (check-in, treatment, inspection, fabrication, etc.)

entity and resource movement (forklift travel, riding in an elevator,
etc.)
resource adjustments, maintenance, and repairs (machine setups,
copy machine repair, etc.)
36
Resources
the means by which activities are performed.

provide the supporting facilities, equipment, and
personnel for carrying out activities.
can constrain processing by limiting the rate at which
processing can take place.
have characteristics, e.g. capacity, speed, cycle time, and
reliability.
can be categorized as:
Human or animate (operators, doctors, maintenance personnel,

etc.)
Inanimate (equipment, tooling, floor space, etc.)
Intangible (information, electrical power, etc.)
also can be classified as
dedicated or shared
permanent or consumable
mobile or stationary
37
Controls
dictate how, when, and where activities are performed.

impose order on the system.
[at the highest level] consists of schedules, plan, and
policies.
[at the lowest level] take the forms of written procedures
and machine control logic.
[at all levels] provide the information and decision logic
for how the system should operate.
Examples:
Routing sequences
Production plans
Work schedules
Task prioritization
Control software
Instruction sheets
38
System Complexity
Elements of a system operate with one another in

ways that often result in complex interactions.
Unaided human intuition is not very good at
analyzing and understanding complex systems.
Inability of the human mind to grasp real-world
complexity is called as the principle of bounded
rationality (Herbert Simon).
This principle states that the capacity of human mind
for formulating and solving complex problem is very
small compared with the size of problem whose
solution is required for objectively rational behavior
in the real world, or even for a reasonable
approximation to such objective rationality (Simon,
1957).
39
System complexity is a primary function of

two factors:
Interdependencies between elements so that each

element affects other elements.
Variability in element behavior that produces
uncertainty.
40
The degree of analytical difficulty increases

exponentially as the number of interdependencies
and random variables increase.
41
System Performance Metrics
Metrics are measures used to assess the performance

of a system.
At the highest level of an organization or business,
metrics measure overall performance in terms of
profits, revenues, cost relative to budget, return on
assets, and so on.
Such metrics are inherently lagging, disguise low-level

performance, and are reported only periodically
From an operational standpoint, it is more beneficial

to track such factors as time, quality, quantity,
efficiency, and utilization.
These operational metrics reflect immediate activity and

are directly controllable
They drive the higher financially related metrics.
42
Key operational metrics that describe the

effectiveness and efficiency of manufacturing and
service systems:
Flow time
Utilization
Value-added time
Waiting time
Flow rate
Inventory or queue levels
Yield
Customer responsiveness
Variance
43
System Variables
Designing a new system or improving an existing

system requires more than simply identifying the
elements and performance goals of the system.
It requires an understanding of how system elements
affect each other and overall performance objectives.
Three types of system variable must be understand:
Decision variables
Response variables
State variables
44
Decision variables
called as input factors or independent variables

changing the values of a systems independent
variables affects the behavior of the system
Independent variables may be either controllable
or uncontrollable.
controllable variable is called decision variables
45
Response variables
called as performance or output variables

measure performance of the system in response to
particular decision variable settings.
In an experiment, the response variable is the
dependent variable.
The goal in system planning is to find the right
values or settings of decision variables that give
the desired response value.
46
State variables
State variables are the status of the system at any

specific point in time.
Response variables are often summaries of state
variable changes over time.
State variables are dependent variables.
47
System Optimization
Optimization is finding the right setting for

decision variables that best meets performance
objectives.
Optimization seeks the best combination of
decision variable values that either minimizes
or maximizes some objective functions such as
costs or profits.
An objective function is a response variable of
the system.
48
A typical objective in an optimization problem

for a manufacturing or service systems:
minimizing costs
maximizing flow rate
Optimization problems may include

constraints that limits the values of decision
variables.
49
In some instances, there are problems of

conflicting objectives.
50
System Approach
Due to departmentalization and specialization,

decisions in the real world often made without
regard to overall system performance.
Approaching system design with overall
objectives in mind and considering how each
element relates to each other and to the whole
is called a systems or holistic approach to
system design.
51
Four-step iterative approach to systems improvement
52
Identifying problems and opportunities
Developing a solution starts by understanding the

problem, identifying key variables, and describing
important relationships.
This helps identify possible areas of focus and leverage
points for applying a solution.
Techniques such as cause-and-effect analysis and pareto
analysis are useful.
Performance standards must be set high in order to look
for the greatest improvement opportunities.
Setting high standards pushes people to think creatively
and often results in breakthrough improvement
53
Developing alternative solutions
Once a problem or opportunity has been

identified and key decision variables isolated,
alternative solution can be explored.
This is where most of the design and engineering
expertise comes into play.
Generating alternative solutions requires
creatively as well as organizational and
engineering skills.
Simulation is particularly helpful in that it
encourages thinking in radical new ways.
54
Evaluating the solutions
Alternative solutions should be evaluated based on their

ability to meet the criteria established for the evaluation.
These criteria include performance goals, cost of
implementation, impact on the sociotechnical
infrastructure, and consistency with organizational
strategies.
Many of these criteria are difficult to measure in absolute
terms.
After narrowing the list to two or three of the most
promising solutions using common sense and rough-cut
analysis, more precise evaluation techniques may need to
be used.
This is where simulation and other formal analysis tools
come into play.
55
Selecting and implementing the best solution
Often the final selection of what solution to

implement is not left to the analyst, but rather a
management decison.
The analysts role is to present his/her evaluation
in the clearest way possible so that an informed
decision can be made.
Even after a solution is selected, additional
modeling and analysis are often needed for finetuning the solution.
Implementers should then be careful to make sure
that the system is implemented as designed,
documenting reasons for any modifications.
56
System Analysis Techniques
While simulation is perhaps the most versatile and

powerful system analysis tool, other available
techniques also can be useful in planning.
These alternative techniques are usually
computational methods that work well for simple
systems with little interdependency and variability.
For more complex systems, these techniques still can
provide rough estimates but fall short in producing
the insights and accurate answers that simulation
provides.
57
Simulation improves performance predictability
58
In addition to simulation, system analysis tools

include:
Hand calculations
Spreadsheet
Operations Research techniques
59
Hand calculations
Quick-and-dirty, pencil-and-paper sketches and

calculations can be remarkably helpful in
understanding basic requirements for a system
Some decisions may be so basic that a quick
mental calculation yields the needed results.
Most of these calculations involve simple algebra.
The obvious drawback is the inability to manually
perform complex calculations or to take into
account tens or potentially even hundreds of
complex relationship simultaneously.
60
Spreadsheets
What-if experiments can be run on spreadsheet

based on expected values and simple interactions.
Spreadsheet simulation can be very useful for
getting rough performance estimates.
Weaknesses of spreadsheet modeling:
Some potential problems are not readily apparent

All behavior is assumed to be period-driven rather than
event-driven
61
Operational Research Techniques
Traditional OR techniques utilize mathematical models to

solve problems involving simple to moderately complex
relationships.
These mathematical models include both deterministic
models (e.g. mathematical programming, routing, or
network flows) and probabilistic models (e.g. queuing and
decision trees).
These OR techniques provide quick, quantitative answers
without going through the guesswork process of trial and
error.
OR techniques can be divided into: prescriptive and
descriptive
62
Prescriptive techniques
an optimum solution to a problem

linear programming, dynamic programming
do not allow random variables
conditions are constant over the period of study
Descriptive techniques
static analysis techniques such as queuing theory

that provide good estimates for basic problems
limited to only one or two metrics
give only average performance measures rather
than a complete picture of performance over time
63
Queuing system
64
Elements of queuing system
Input source (calling population)
Queue
Length
Queuing disciplines
Size
Arrival distribution
FIFO, LIFO, priority
Service mechanism
Number of service facilities

Structure of service facilities
Service distribution
65
Kendalls notation
(a/b/c) : (d/e/f)
a : Interarrival time distribution
b : Service time distribution
c : Number of parallel servers
d : Service discipline
e : Maximum number of queue
f : Number of calling population
66
For a and b
M : Exponential distribution
D : Degenerate distribution
Ek : Erlang distribution
GI : General distribution for interarrival time
G : General distribution for service time
For service discipline
FIFO : First-in, first out
LIFO : Last-in, first out
SIRO : Service in random order
67
Group Assignment 1
Group of 5
1.
2.
3.
4.
5.
Determine the system of your groups interest.

Identify the elements of the system.
Identify the system objective.
Determine what can be the problem of that system.
Discuss with the group what maybe the alternative
solutions.
68

Introduction To Simulation

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Industrial Engineering Department

The Oxford American Dictionary (1980):

Simulation is a way to reproduce the conditions of a

For our purposes, we are interested in reproducing the

Simulation is the modeling of a process or

By studying the behavior of the model, insight

Simulation is performed using commercial

Simulation is the imitation of a dynamic system

Discrete-event simulation employs statistical

Simulation provides a way to validate whether or not

The characteristics of simulation that make it such a

captures system interdependence

Simulation is nearly always performed as a part of a

Doing simulation talks about the process of

Simulation is a virtual prototyping tool for

The procedure for doing simulation follows

Simulation began to be used in commercial

Initial models were usually programmed in

Only in the last couple of decades has

The surge in popularity of computer

Increased awareness and understanding of

Typical Applications of Simulation

When Simulation is Appropriate

Not all system problems that could be solved

When Simulation is Appropriate ..

As a general guideline, simulation is appropriate if

An operational (logical or quantitative) decision is being

Qualification for Doing Simulation

Participants in the simulation project include modeler,

Economic Justification of Simulation

Cost is always important issues when considering the

Savings from simulation are realized by identifying

Economic Justification of Simulation

The real savings from a simulation come from

Cost of making changes at subsequent stages

Comparison of cumulative system costs with

Industrial Engineering Department

A system is defined as a collection of elements

A system consists of multiple elements.

Main focus of our subject

manufacturing and service systems that process

Small job shops

Health care facilities

Both manufacturing and service systems may

They process items through a series of activities..

From a simulation perspective, a system

System : Input-Output Box

Items processed through the system such as products,

human or animate (customers, patients, etc.)

[For most manufacturing and service systems] discrete

Example: oil refineries, paper mills

The tasks performed in the system (directly or

Consume time and often involve the use of resources

entity processing (check-in, treatment, inspection, fabrication, etc.)

the means by which activities are performed.

Human or animate (operators, doctors, maintenance personnel,

also can be classified as

dictate how, when, and where activities are performed.

Elements of a system operate with one another in

System complexity is a primary function of

Interdependencies between elements so that each

The degree of analytical difficulty increases

System Performance Metrics