Simulation Modeling

Suri Gurumurthi, Ph.D.

January 2020
Simulation Defined
• A model of a real-world system
• Use the model to represent the function, behavior, and performance
of a real-world system

Random Inputs System

(Random) Outputs
Approaches to Systems Analysis
Simulation as a branch of Analytics
Optimization
Simulation
Modeling

Diagnostic/Predictive
Descriptive Analytics Prescriptive Analytics
Analytics
Simulation Project Life Cycle
• Performance indicators of business
Problem
• Challenges, improvement alternatives
Definition
• Simple analysis, simulation yes/no?

• Essential features of business

Modeling • and proposed solutions
• conceptual / executable / parameters

• Replay history
Validation • Assessment by stakeholders

• Alternatives
Experiments • Parameters

Reporting
Business Process Simulation

Infrastructure
Strategic Decisions Policy Decisions
Staffing
Product Introduction
R&D

Throughput Operational Demand

Response Times Competitive Dynamics
Decisions and Market Trends
Product availability Labor supply
Performance Technology options
Pricing capacity
Revenue realization
Business Case for Simulation Projects

Multiple Complexity;
Alternatives; Interactions;
Ambiguity Dynamics

Analysis;
Cost;
Randomness;
Avoid Trial and
Uncertainty;
Error
No easy solution
Business Case for Simulation…
• Ability to compress time, expand time
• Ability to control sources of variation
• Avoids errors in measurement
• Ability to stop and review
• Start over at minimal cost (erase past decisions)
• Repeated trials
• Complexity and detail can be added as desired
Classification of Simulation Models
Modeling

Deterministic Stochastic/Random

Static Dynamic Static Dynamic

Discrete Continuous Discrete Continuous

Examples of VISUAL Simulation Projects
• CONTAINER PORT SIMULATION:
https://www.youtube.com/watch?v=ccYm2GEbkWA

• AIRPORT SIMULATION:
https://www.youtube.com/watch?v=GCXzzSKm_O4

• MEDICAL CARE SIMULATION

https://www.youtube.com/watch?v=cZNa0vmdgSI

• TRAFFIC INTERSECTION SIMULATION

https://www.youtube.com/watch?v=yITr127KZtQ
 Simulation by Hand:
The Buffon Needle Problem
https://www.youtube.com/watch?v=szUH1rzwbAw Silly Experiment?
• Estimate p (George Louis Leclerc, c. • Experiment to estimate something
1733) hard to compute exactly (in 1733)
• Toss needle of length l onto table with • Randomness, so estimate will not be
stripes d (>l) apart exact; estimate the error in the
estimate
• P (needle crosses a line) = 2l • Replication (the more the better) to
pd
reduce error
• Repeat; tally p! = proportion of times a • Sequential sampling to control error
line is crossed -- keep tossing until probable error
in estimate is “small enough”
• Variance reduction
2l
• Estimate p by
!
pd
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Monte Carlo Simulation: Repeated Trials

• Increasing the number of trials increases the accuracy of your

estimate of the expected outcome
• Remember formula for standard deviation of average:

s
sX =
X

n
• Excel and related tools make it much easier to conduct and
analyze a large number of trials

12
Optimization vs. Simulation
Optimization
Determines the best
levels of variables
under our control

Simulation

Helps assess the

impact of specific
choices we make
for variables under
our control

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 Simulation Application
• Model = Representation of Reality • Manufacturing:
• scheduling, inventory
• Model IS NOT EQUAL Reality!
• Staffing: personal-service
• We use simulation when other methods are operations
too context poor • Banks, fast food, theme parks, Post
Office, ...
• We look at “what-ifs”, or consequences of our
decisions in the model • Distribution and logistics
• Air traffic operations
• Principle: Approximate answer to exact • Warehouse operations
problem is sometimes better than an exact • Ports and Shipping
• Urban Planning
answer to approximate problem
• Health care:
• Staffing, Emergency and hospital
operations
• Telecommunications
• Switching and Call Routing
• Military
• Logistics and war-games
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Limitations of Simulation Modeling

Don’t get exact

Get random output
answers, only Simpler models, yield Complex models yield
(RIRO) from stochastic
approximations, more robust results less robust results
simulations
estimates

Statistical design,
Also true of many
analysis of Fewer degrees of Higher degrees of
other modern
simulation freedom freedom
methods
experiments

Results are
Higher statistical Lower statistical
conditioned on
confidence in confidence in
statistical
results results
confidence levels

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Virtual & Augmented Reality
• Virtual Reality
• “The computer-generated simulation of a 3D
image or environment that a person can be
interact with in a seemingly real or physical
way by a person using special electronic
devices…”
• Augmented Reality
• “Superimposition of a computer-generated
image on a person's view of the real world,
providing a composite and altered
perspective...”
 Decision Making in VR and AR
• US Army trains its soldiers on high pressure
combat environments using VR
• De Beers allows potential customers to virtually
try on jewelry
• Entice and attract potential buyers
• Personalize the experience
• IKEA allows customers to virtually place the
catalog items in your home using mobile apps
• Visualize before purchase
• Reduce regret and returns!
 VR is a 3D Simulates space
and higher Simulates time
dimensional Simulates interactions!
simulation Can be used to model multi-agent decision-making

Differences
Between VR
and AR Augmented Marries personal experiences with related imagery and
simulations
reality is
Adds value to the real world experience
more
Enables superior decision-making with additional
personal superimposed data
and Looks for and provides the missing elements that can
complex accelerate decision-making!