Simulation

 In general terms Simulation involves developing a model of some real phenomenon and then performing
experiments on the model. The benefit of simulation from the viewpoint of analysts teams from the fact that
result of taking particular course of action can be estimated prior to its implementation in the real world.

Process of simulation
1. Definition of a problem and statement of objective
2. Construction of an appropriate model
3. Experimentation with the model constructed
4. Evaluation of the result of simulation

Monte Carlo Simulation

 This technique is based on random numbers. Let see how to do it.
Example
Suppose that a bakery keeps a record of the sale of the numbers of cakes of a certain time. The owner want to
simulate data for next 10 days by using the following information.
Demand Number of days
5 4
6 10
7 16
8 50
9 62
10 38
11 12
12 8
The given random numbers are 61,74,24,3,59,16,84,92,52,7.
Demand Number of days Probability Cumulative Probability Class Interval
5 4 0.02 0.02 00-01
6 10 0.05 0.07 02-06
7 16 0.08 0.15 07-14
8 50 0.25 0.40 15-39
9 62 0.31 0.71 40-70
10 38 0.19 0.90 71-89
11 12 0.06 0.96 90-95
12 8 0.04 1.00 96-99
200

Day 1 2 3 4 5 6 7 8 9 10
Random number 61 74 24 3 59 16 84 92 52 7
Demand 9 10 8 6 9 8 10 11 9 7

Example
Using the following random numbers, generate the demand for next 15 week and also find out average demand per
week. The random numbers are 35,52,90,13,23,73,34,57,35,83,94,56,67,66,60.
Demand Frequency
0 2
5 11
10 8
15 21
20 5
25 3

Demand Frequency Probability Cumulative Probability Class Interval

0 2 0.04 0.04 00-03
5 11 0.22 0.26 04-25
10 8 0.16 0.42 26-41
15 21 0.42 0.84 42-83
20 5 0.10 0.94 84-93
25 3 0.06 1.00 94-99
50
Simulation of Inventory System
Example
Consider the case of dealer of certain period for which the probability distribution of daily demand and lead time are
given. The ordering cost is ₹ 80 per order. Holding cost per unit ₹ 2 and shortage cost ₹ 20 per unit. We shall evaluate
a simulation plan which calls for a reorder quantity of 40 units and reorder level of 20 units with a beginning balance
of 30 units. Random numbers for lead time are 47, 74, 25, 21, 47, 69, 9 and 80.
Table of demand
Demand Probability
3 0.02
4 0.08
5 0.11
6 0.16
7 0.19
8 0.13
9 0.10
10 0.08
11 0.07
12 0.06
Table of lead time
Days Probability
2 0.20
3 0.30
4 0.35
5 0.15
Table of demand
Demand Probability Cumulative Probability Class Interval
3 0.02 0.02 00-01
4 0.08 0.10 02-09
5 0.11 0.21 10-20
6 0.16 0.37 21-36
7 0.19 0.56 37-55
8 0.13 0.69 56-68
9 0.10 0.79 69-78
10 0.08 0.87 79-86
11 0.07 0.94 87-93
12 0.06 1.00 94-99
Table of lead time
Days Probability Cumulative Probability Class Interval
2 0.20 0.20 00-19
3 0.30 0.50 20-49
4 0.35 0.85 50-84
5 0.15 1.00 85-99
Table of Simulation
Day Random Demand Random Lead Receipt Balance Ordering Holding Storage
Numbers Numbers Time Cost Cost Cost
0 - - - - - 30 - - -
1 68 8 - - - 22 - 44 -
2 13 5 47 3 - 17 80 34 -
3 09 4 - - - 13 - 26 -
4 20 5 - - - 8 - 16 -
5 73 9 - - 40 39 - 78 -
6 07 4 - - - 35 - 70 -
7 92 11 - - - 24 - 48 -
8 99 12 74 4 - 12 80 24 -
9 93 11 - - - 1 - 2 -
10 18 5 - - - 0 - - 80
11 24 6 - - - 0 - - 120
12 22 6 - - 40 34 - 68 -
13 7 4 - - - 30 - 60 -
14 29 6 - - - 24 - 48 -
15 57 8 25 3 - 16 80 32 -
16 33 6 - - - 10 - 20 -
17 49 7 - - - 3 - 6 -
18 65 8 - - 40 35 - 70 -
19 92 11 - - - 24 - 48 -
20 98 12 21 3 - 12 80 24 -
21 00 3 - - - 9 - 18 -
22 57 8 - - - 1 - 2 -
23 12 5 - - 40 36 - 72 -
24 31 6 - - - 30 - 60 -
25 96 12 47 3 - 18 80 36 -
26 85 10 - - - 8 - 16 -
27 92 11 - - - 0 - - 60
28 91 11 - - 40 29 - 58 -
29 77 9 69 4 - 20 80 40 -
30 37 7 - - - 13 - 26 -
31 34 6 - - - 7 - 14 -
32 11 5 - - - 2 - 4 -
33 27 6 - - 40 36 - 72 -
34 10 5 - - - 31 - 62 -
35 59 8 - - - 23 - 46 -
36 33 6 9 2 - 17 80 34 -
37 87 11 - - - 6 - 12 -
38 72 9 - - 40 37 - 74 -
39 73 9 - - - 28 - 56 -
40 79 10 80 4 - 18 80 36 -
Total 640 1456 260
Simulation of Queuing System
Example
In a large workshop undertaking service job. The mechanics obtain their tools and requirements from a central store.
The manager wants to know about the waiting time of mechanics. He is in the process of determining whether more
attendants to be hired for the store for raising the level of service. For helping manager, solve this problem by
simulation. Store starts at early in the morning 8 o’clock. The past data of 200 observations of arrival time and service
time is given.
Distribution of arrival time
Time Frequency Probability
0 12 0.06
3 18 0.09
6 50 0.25
9 74 0.37
12 32 0.16
15 14 0.07
Distribution of service time
Time Frequency Probability
4 8 0.04
6 20 0.10
8 36 0.18
10 88 0.44
12 48 0.24
Random numbers for arrival time
58, 47, 23, 69, 35, 55, 69, 90, 86, 74, 39, 15, 90, 98, 39, 16, 52, 56, 21, 23, 0, 87, 20, 40, 73
Random numbers for service time
87, 39, 28, 97, 69, 87, 52, 52, 15, 85, 41, 82, 98, 90, 23, 77, 42, 60, 22, 91, 68, 36, 22, 92, 34
Distribution of arrival time
Time Frequency Probability Cumulative Probability Class Interval
0 12 0.06 0.06 00-05
3 18 0.09 0.15 06-14
6 50 0.25 0.40 15-39
9 74 0.37 0.77 40-76
12 32 0.16 0.93 77-92
15 14 0.07 1.00 93-99
Distribution of service time
Time Frequency Probability Cumulative Probability Class Interval
4 8 0.04 0.04 00-03
6 20 0.10 0.14 04-13
8 36 0.18 0.32 14-31
10 88 0.44 0.76 32-75
12 48 0.24 1.00 76-99
Table of simulation
Arrival Service
Serial Random Time Random Time Waiting Beginning Ending Queue
O’clock
Number Number Number Time Time Time Length
1 58 9 8:09 87 12 00 8:09 8:21 01
2 47 9 8:18 39 10 03 8:21 8:31 01
3 23 6 8:24 28 8 07 8:31 8:39 02
4 69 9 8:33 97 12 06 8:39 8:51 02
5 35 6 8:39 69 10 12 8:51 9:01 02
6 55 9 8:48 87 12 13 9:01 9:13 02
7 69 9 8:57 52 10 16 9:13 9:23 02
8 90 12 9:09 52 10 14 9:23 9:33 02
9 86 12 9:21 15 8 12 9:33 9:41 02
10 74 9 9:30 85 12 11 9:41 9:53 02
 11 39 6 9:36 41 10 17 9:53 10:03 02
12 15 6 9:42 82 12 21 10:03 10:15 03
13 90 12 9:54 98 12 21 10:15 10:27 03
14 98 15 10:09 90 12 18 10:27 10:39 04
15 39 6 10:15 23 8 24 10:39 10:47 04
16 16 6 10:21 77 12 26 10:47 10:59 05
17 52 9 10:30 42 10 29 10:59 11:09 06
18 56 9 10:39 60 10 30 11:09 11:19 06
19 21 6 10:45 22 8 34 11:19 11:27 06
20 23 6 10:51 91 12 36 11:27 11:39 05
21 0 0 10:51 68 10 48 11:39 11:49 04
22 87 12 11:03 36 10 46 11:49 11:59 03
23 20 6 11:09 22 8 50 11:59 12:07 02
24 40 9 11:18 92 12 49 12:07 12:19 01
25 83 9 11:27 34 10 52 12:19 12:29 00
9 hours and
Total 72
55 minutes

Important questions
1. What is simulation?
2. Describe the simulation process.
3. What are the advantages and limitations of simulation?
4. Discuss Monte Carlo Simulation.
5. Write a short note of applications of simulation.