• WHAT is Simulation ?
• WHY is Simulation required ?
• HOW is Simulation applied ?
• WHERE is Simulation used ?
DEFINITION
• Simulation is a representation of reality through the use of model or other device, which will react in the same manner as reality under a given set of conditions.
• Simulation is the use of system model that has the designed characteristic of reality in order to produce the essence of actual operation. • According to Donald G. Malcolm, simulation model may be defined as one which depicts the working of a large scale system of men, machines, materials and information operating over a period of time in a simulated environment of the actual real world conditions.
NEED FOR SIMULATION
• Many real world problems which cannot be represented by a mathematical model.
• Tool for tackling the complicated problem of managerial decisionmaking.
• Utilizes a computerized model.
• To represent actual decision-making under conditions of uncertainty for evaluating alternative courses of action based upon facts and assumptions. MONTE CARLO TECHNIQUE
STEPS:
1. Setting up a probability distribution for variables to be analyzed.
2. Building a cumulative probability distribution for each random variable. 3. Generate random numbers .
4. Conduct the simulation experiment by means of random sampling
5. Repeat step 4 until the required number of simulation runs has been generated.
6. Design and implement a course of action and maintain control.
PROBLEM
A bakery keeps stock of a popular brand of cake. Previous experience shows the demand pattern for the item with associated probabilities, as given below:
DAILY DEMAND : 0
10
20
30
40
50
PROBABILITY
0.20
0.15
0.50
0.12
0.02
: 0.01
Use the following sequence of random numbers to simulate the demand for next ten days 40, 19, 87, 83, 73, 84, 29, 09, 02, 20
Also estimate the daily average demand for the cakes on the