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    LESSON

    15

    SIMULATION

    CONTENTS

    15.0 Aims and Objectives

    15.1 Introduction

    15.2 Advantages and Disadvantages of Simulation

    15.3 Monte Carlo Simulation

    15.4 Simulation of Demand Forecasting Problem

    15.5 Simulation of Queuing Problems

    15.6 Simulation of Inventory Problems

    15.7 Let us Sum Up

    15.8 Lesson-end Activities

    15.9 Keywords

    15.10 Questions for Discussion

    15.11 Terminal Questions

    15.12 Model Answers to Questions for Discussion

    15.13 Suggested Readings

    15.0 AIMS AND OBJECTIVES

    This is the last lesson of the QT which will discuss about the Mathematical analysis and

    mathematical technique simulation technique is considered as a valuable tool because

    wide area of applications.

    15.1 INTRODUCTION

    In the previous chapters, we formulated and analyzed various models on real-life problems.

    All the models were used with mathematical techniques to have analytical solutions. In

    certain cases, it might not be possible to formulate the entire problem or solve it through

    mathematical models. In such cases, simulation proves to be the most suitable method,

    which offers a near-optimal solution. Simulation is a reflection of a real system,

    representing the characteristics and behaviour within a given set of conditions.

    In simulation, the problem must be defined first. Secondly, the variables of the model are

    introduced with logical relationship among them. Then a suitable model is constructed.

    After developing a desired model, each alternative is evaluated by generating a series of

    values of the random variable, and the behaviour of the system is observed. Lastly, theresults are examined and the best alternative is selected the whole process has been

    summarized and shown with the help of a flow chart in the Figure 90.

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    Quantitative Techniques

    for ManagementSimulation technique is considered as a valuable tool because of its wide area of application.

    It can be used to solve and analyze large and complex real world problems. Simulation

    provides solutions to various problems in functional areas like production, marketing,

    finance, human resource, etc., and is useful in policy decisions through corporate planning

    models. Simulation experiments generate large amounts of data and information using a

    small sample data, which considerably reduces the amount of cost and time involved in

    the exercise.For example, if a study has to be carried out to determine the arrival rate of customers at

    a ticket booking counter, the data can be generated within a short span of time can be

    used with the help of a computer.

    Figure 15.1: Simulation Process

    15.2 ADVANTAGES AND DISADVANTAGES OF

    SIMULATION

    Advantages

    Simulation is best suited to analyze complex and large practical problems when it is

    not possible to solve them through a mathematical method.

    Simulation is flexible, hence changes in the system variables can be made to select

    the best solution among the various alternatives.

    In simulation, the experiments are carried out with the model without disturbing the

    system.

    Policy decisions can be made much faster by knowing the options well in advance

    and by reducing the risk of experimenting in the real system.

    Disadvantages

    Simulation does not generate optimal solutions.

    It may take a long time to develop a good simulation model.

    In certain cases simulation models can be very expensive.

    The decision-maker must provide all information (depending on the model) aboutthe constraints and conditions for examination, as simulation does not give the

    answers by itself.

    Problem Definition

    Introduction of Variables

    Construction of Simulation Model

    Testing of variables with values

    Simulate

    Examination of results

    Selection of best alternative

    Not Acceptable Not Acceptable

    Acceptable

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    Simulation15.3 MONTE CARLO SIMULATION

    In simulation, we have deterministic models and probabilistic models. Deterministic

    simulation models have the alternatives clearly known in advance and the choice is

    made by considering the various well-defined alternatives. Probabilistic simulation model

    is stochastic in nature and all decisions are made under uncertainty. One of the probabilistic

    simulation models is the Monte Carlo method. In this method, the decision variables arerepresented by a probabilistic distribution and random samples are drawn from probability

    distribution using random numbers. The simulation experiment is conducted until the

    required number of simulations are generated. Finally, the best course of action is selected

    for implementation. The significance of Monte Carlo Simulation is that decision variables

    may not explicitly follow any standard probability distribution such as Normal, Poisson,

    Exponential, etc. The distribution can be obtained by direct observation or from past

    records.

    Procedure for Monte Carlo Simulation:

    Step 1: Establish a probability distribution for the variables to be analyzed.

    Step 2: Find the cumulative probability distribution for each variable.

    Step 3: Set Random Number intervals for variables and generate random numbers.

    Step 4: Simulate the experiment by selecting random numbers from random numbers

    tables until the required number of simulations are generated.

    Step 5: Examine the results and validate the model.

    15.4 SIMULATION OF DEMAND FORECASTING

    PROBLEM

    Example 1:An ice-cream parlor's record of previous months sale of a particular variety

    of ice cream as follows (see Table 15.1).

    Table 15.1: Simulation of Demand Problem

    Simulate the demand for first 10 days of the month

    Solution:Find the probability distribution of demand by expressing the frequencies in

    terms of proportion. Divide each value by 30. The demand per day has the followingdistribution as shown in Table 15.2.

    Table 15.2: Probability Distribution of Demand

    Find the cumulative probability and assign a set of random number intervals to various

    demand levels. The probability figures are in two digits, hence we use two digit randomnumbers taken from a random number table. The random numbers are selected from

    the table from any row or column, but in a consecutive manner and random intervals are

    set using the cumulative probability distribution as shown in Table 15.3.

    Demand (No. of Ice-creams) No. of days

    4 5

    5 10

    6 6

    7 8

    8 1

    Demand Probability

    4 0.17

    5 0.33

    6 0.20

    7 0.27

    8 0.03

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    Quantitative Techniques

    for ManagementTable 15.3: Cumulative Probability Distribution

    To simulate the demand for ten days, select ten random numbers from random numbertables. The random numbers selected are,

    17, 46, 85, 09, 50, 58, 04, 77, 69 and 74

    The first random number selected, 7 lies between the random number interval 17-49corresponding to a demand of 5 ice-creams per day. Hence, the demand for day oneis 5. Similarly, the demand for the remaining days is simulated as shown in Table 15.4.

    Table 15.4: Demand Simulation

    Example 2:A dealer sells a particular model of washing machine for which the probabilitydistribution of daily demand is as given in Table 15.5.

    Table 15.5: Probability Distribution of Daily Demand

    Find the average demand of washing machines per day.

    Solution: Assign sets of two digit random numbers to demand levels as shown in

    Table 15.6.

    Table 15.6: Random Numbers Assigned to Demand

    Ten random numbers that have been selected from random number tables are 68, 47, 92,76, 86, 46, 16, 28, 35, 54. To find the demand for ten days see the Table 15.7 below.

    Table 15.7: Ten Random Numbers Selected

    Day 1 2 3 4 5 6 7 8 9 10

    Random Number 17 46 85 09 50 58 04 77 69 74

    Demand 5 5 7 4 6 6 4 7 6 7

    Demand/day - 0 1 2 3 4 5

    Demand - 0.05 0.25 0.20 0.25 0.10 0.15

    Demand Probability Cumulative Probability Random Number Intervals

    0 0.05 0.05 00-04

    1 0.25 0.30 05-29

    2 0.20 0.50 30-49

    3 0.25 0.75 50-74

    4 0.10 0.85 75-84

    5 0.15 1.00 85-99

    Trial No Random Number Demand / day

    1 68 3

    2 47 2

    3 92 5

    4 76 4

    5 86 5

    6 46 2

    7 16 1

    8 28 1

    9 35 2

    10 54 3

    Total Demand 28

    Demand Probability Cumulative Probability Random Number Interval

    4 0.17 0.17 00-16

    5 0.33 0.50 17-49

    6 0.20 0.70 50-69

    7 0.27 0.97 70-96

    8 0.03 1.00 97-99

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    SimulationAverage demand =28/10 =2.8 washing machines per day.

    The expected demand /day can be computed as,

    Expected demand per day = =

    .......................(1)

    where, pi= probability and xi = demand

    = (0.05 0) + (0.25 1) + (0.20 2) + (0.25 3) + (0.1 4) + (0.15 5)

    = 2.55 washing machines.

    The average demand of 2.8 washing machines using ten-day simulation differs significantly

    when compared to the expected daily demand. If the simulation is repeated number of

    times, the answer would get closer to the expected daily demand.

    Example 3:A farmer has 10 acres of agricultural land and is cultivating tomatoes on

    the entire land. Due to fluctuation in water availability, the yield per acre differs. The

    probability distribution yields are given below:

    a. The farmer is interested to know the yield for the next 12 months if the same wateravailability exists. Simulate the average yield using the following random numbers

    50, 28, 68, 36, 90, 62, 27, 50, 18, 36, 61 and 21, given in Table 15.8.

    Table 15.8: Simulation Problem

    b. Due to fluctuating market price, the price per kg of tomatoes varies from Rs. 5.00

    to Rs. 10.00 per kg. The probability of price variations is given in the Table 216

    below. Simulate the price for next 12 months to determine the revenue per acre.

    Also find the average revenue per acre. Use the following random numbers 53, 74,

    05, 71, 06, 49, 11, 13, 62, 69, 85 and 69.

    Table 15.9: Simulation Problem

    Solution:

    Table 15.10: Table for Random Number Interval for Yield

    Yield of tomatoes per acre (kg) Probability

    200 0.15

    220 0.25

    240 0.35

    260 0.13

    280 0.12

    Price per kg (Rs) Probability

    5.50 0.05

    6.50 0.15

    7.50 0.30

    8.00 0.25

    10.00 0.15

    Yield of tomatoes

    per acre

    Probability Cumulative Probability Random Number

    Interval

    200

    220

    240

    260

    280

    0.15

    0.25

    0.35

    0.13

    0.12

    0.15

    0.40

    0.75

    0.88

    1.00

    00 14

    15 39

    40 74

    75 87

    88 99

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    Quantitative Techniques

    for ManagementTable 15.11: Table for Random Number Interval for Price

    Table 15.12: Simulation for 12 months period

    Average revenue per acre = 21330 / 12

    = Rs. 1777.50

    Example 4:J.M Bakers has to supply only 200 pizzas every day to their outlet situated

    in city bazaar. The production of pizzas varies due to the availability of raw materials and

    labor for which the probability distribution of production by observation made is as follows:

    Table 15.13: Simulation Problem

    Simulate and find the average number of pizzas produced more than the requirement

    and the average number of shortage of pizzas supplied to the outlet.

    Solution: Assign two digit random numbers to the demand levels as shown in

    Table 15.14

    Table 15.14: Random Numbers Assigned to the Demand Levels

    Price Per Kg Probability Cumulative Probability Random Number Interval

    5.00

    6.50

    7.50

    8.0010.00

    0.05

    0.15

    0.30

    0.250.25

    0.05

    0.20

    0.50

    0.751.00

    00 04

    05 19

    20 49

    50 7475 99

    Month

    (1)

    Yield

    (2)

    Price

    (3)Revenue / Acre (4) = 2 3 (Rs)

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    240

    220

    240

    220

    250

    240

    220

    240

    220

    220

    240

    220

    8.00

    8.00

    6.50

    8.00

    6.50

    7.50

    6.50

    6.50

    8.00

    8.00

    10.00

    8.00

    1960

    1760

    1560

    1760

    1820

    1800

    1430

    1560

    1760

    1760

    2400

    1760

    Production per day 196 197 198 199 200 201 202 203 204

    Probability 0.06 0.09 0.10 0.16 0.20 0.21 0.08 0.07 0.03

    Demand Probability Cumulative Probability No of Pizzas shortage

    196 0.06 0.06 00-05

    197 0.09 0.15 06-14

    198 0.10 0.25 15-24

    199 0.16 0.41 25-40

    200 0.20 0.61 41-60

    201 0.21 0.82 61-81

    202 0.08 0.90 82-89

    203 0.07 0.97 90-96

    204 0.03 1.00 97-99

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    SimulationSelecting 15 random numbers from random numbers table and simulate the production

    per day as shown in Table 15.15 below.

    Table 15.15: Simulation of Production Per Day

    The average number of pizzas produced more than requirement

    = 12/15

    = 0.8 per day

    The average number of shortage of pizzas supplied

    = 4/15

    = 0.26 per day

    Check Your Progress 15.1

    1. Discuss the role of simulation in demand forecasting.

    2. What is Monte Carlo simulation?

    Notes: (a) Write your answer in the space given below.

    (b) Please go through the lesson sub-head thoroughly you will get your

    answers in it.

    (c) This Check Your Progress will help you to understand the lesson

    better. Try to write answers for them, but do not submit your answers

    to the university for assessment. These are for your practice only.

    _____________________________________________________________________

    ____________________________________________________________________________________________________________________

    _____________________________________________________________________

    __________________________________________________________________

    _____________________________________________________________

    15.5 SIMULATION OF QUEUING PROBLEMS

    Example 5:Mr. Srinivasan, owner of Citizens restaurant is thinking of introducing

    separate coffee shop facility in his restaurant. The manager plans for one service counter

    for the coffee shop customers. A market study has projected the inter-arrival times atthe restaurant as given in the Table 15.16. The counter can service the customers at the

    following rate:

    Trial Number Random Number Production Per

    day

    No of Pizzas over

    produced

    No of pizzas

    shortage

    1 26 199 - 1

    2 45 200 - -3 74 201 1 -

    4 77 201 1 -

    5 74 201 1 -

    6 51 200 - -

    7 92 203 3 -

    8 43 200 - -

    9 37 199 - 1

    10 29 199 - 1

    11 65 201 1 -

    12 39 199 - 1

    13 45 200 - -

    14 95 203 3 -

    15 93 203 3 -

    Total 12 4

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    Quantitative Techniques

    for ManagementTable 15.16: Simulation of Queuing Problem

    Mr. Srinivasan will implement the plan if the average waiting time of a customers in thesystem is less than 5 minutes.

    Before implementing the plan, Mr. Srinivasan would like to know the following:

    i. Mean waiting time of customers, before service.

    ii. Average service time.

    iii. Average idle time of service.

    iv. The time spent by the customer in the system.

    Simulate the operation of the facility for customer arriving sample of 20 cars when therestaurant starts at 7.00 pm every day and find whether Mr. Srinivasan will go for theplan.

    Solution: Allot the random numbers to various inter-arrival service times as shown inTable 15.17.

    Table 15.17: Random Numbers Allocated to Various Inter-Arrival Service Times

    i. Mean waiting time of customer before service = 20/20 = 1 minute

    ii. Average service idle time = 17/20 = 0.85 minutes

    iii. Time spent by the customer in the system = 3.6 + 1 = 4.6 minutes.

    Example 6:Dr. Strong, a dentist schedules all his patients for 30 minute appointments.Some of the patients take more or less than 30 minutes depending on the type of dentalwork to be done. The following Table 15.18 shows the summary of the various categoriesof work, their probabilities and the time actually needed to complete the work.

    Waiting TimeSl.

    No.

    Random

    Number(Arrival)

    Inter

    ArrivalTime

    (Min)

    Arrival

    Time at

    Service

    Starts at

    Random

    Number(service)

    Service

    Time(Min)

    Service

    Ends at

    CustomerService

    (Min)

    1 87 6 7.06 7.06 36 4 7.10 - 6

    2 37 3 7.09 7.10 16 3 7.13 1 -

    3 92 6 7.15 7.15 81 5 7.20 - 2

    4 52 4 7.19 7.20 08 2 7.22 1 -

    5 41 4 7.23 7.23 51 4 7.27 - 1

    6 05 2 7.25 7.27 34 3 7.30 2 -

    7 56 4 7.29 7.30 88 6 7.36 1 -

    8 70 5 7.34 7.36 88 6 7.42 2 -

    9 70 5 7.39 7.42 15 3 7.45 3 -

    10 07 2 7.41 7.45 53 4 7.49 4 -

    11 86 6 7.47 7.49 01 2 7.51 2 -

    12 74 5 7.52 7.52 54 4 7.56 - 1

    13 31 3 7.55 7.56 03 2 7.58 1 -

    14 71 5 8.00 8.00 54 4 8.04 1 2

    15 57 4 8.04 8.04 56 4 8.08 - -

    16 85 6 8.10 8.10 05 2 8.12 - 2

    17 39 3 8.13 8.13 01 2 8.15 - 1

    18 41 4 8.17 8.17 45 4 8.21 - 2

    19 18 3 8.20 8.21 11 3 8.24 1 -

    20 38 3 8.23 8.24 76 5 8.29 1 -

    Total 83 72 20 17

    Interarrival times Service times

    Time between two

    consecutive arrivals (minutes)Probability

    Service time

    (minutes)Probability

    2 0.15 2 0.10

    3 0.25 3 0.25

    4 0.20 4 0.30

    5 0.25 5 0.2

    6 0.15 6 0.15

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    SimulationTable 15.18: Simulation Problem

    Simulate the dentists clinic for four hours and determine the average waiting time for

    the patients as well as the idleness of the doctor. Assume that all the patients show up at

    the clinic exactly at their scheduled arrival time, starting at 8.00 am. Use the following

    random numbers for handling the above problem: 40,82,11,34,25,66,17,79.

    Solution:Assign the random number intervals to the various categories of work asshown in Table 15.19.

    Table 15.19: Random Number Intervals Assigned to the Various Categories

    Assuming the dentist clinic starts at 8.00 am, the arrival pattern and the service category

    are shown in Table 15.20.

    Table 15.20: Arrival Pattern of the Patients

    Table 15.21: The arrival, departure patterns and patients waiting time are tabulated.

    Category of work Probability Cumulative probability Random Number Interval

    Filling 0.40 0.40 00-39

    Crown 0.15 0.55 40-54

    Cleaning 0.15 0.70 55-69

    Extraction 0.10 0.80 70-79

    Check-up 0.20 1.00 80-99

    Patient Number Scheduled Arrival Random Number Service category Service Time

    1 8.00 40 Crown 60

    2 8.30 82 Check-up 15

    3 9.00 11 Filling 45

    4 9.30 34 Filling 45

    5 10.00 25 Filling 45

    6 10.30 66 Cleaning 15

    7 11.00 17 Filling 45

    8 11.30 79 Extraction 45

    Time Event (Patient Number) Patient Number (Time to go) Waiting (Patient Number)

    8.00 1 arrives 1 (60) -

    8.30 2 arrives 1 (30) 2

    9.00 1 departure, 3 arrives 2 (15) 3

    9.15 2 depart 3 (45) -

    9.30 4 arrive 3 (30) 4

    10.00 3 depart, 5 arrive 4 (45) 5

    10.30 6 arrive 4 (15) 5,6

    10.45 4 depart 5 (45) 6

    11.00 7 arrive 5 (30) 6,7

    11.30 5 depart, 8 arrive 6 (15) 7,8

    11.45 6 depart 7 (45) 8

    12.00 End 7 (30) 8

    Category Time required (minutes) Probability of category

    Filling 45 0.40

    Crown 60 0.15

    Cleaning 15 0.15

    Extraction 45 0.10Check-up 15 0.20

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    SimulationTable 15.26: Random Numbers Assigned for Lead-time

    Table 15.27: Simulation Work-sheet for Inventory Problem (Case 1)

    Reorder Quantity = 35 units, Reorder Level = 20 units, Beginning Inventory = 45 units

    Lead Time (Days) Probability Cumulative probability Random Number Interval

    1 0.20 0.20 00-19

    2 0.30 0.50 20-49

    3 0.35 0.85 50-84

    4 0.15 1.00 85-99

    Day

    Random

    Number

    (Demand)

    Demand

    Random

    Number

    (Lead

    Time)

    Lead

    Time

    (Days)

    Inventory

    at end of

    day

    Qty.

    Recei-

    ved

    Order-

    ing

    Cost

    Holding

    Cost

    Short-

    age

    Cost

    0 - - - - 45 - - - -

    1 58 7 - - 38 - - 38 -

    2 45 6 - - 32 - - 32 -

    3 43 6 - - 26 - - 26 -

    4 36 6 73 3 20 - 50 20 -

    5 46 6 - - 14 - - 14 -

    6 46 6 - - 8 - - 8 -

    7 70 7 - - 1 35 - 36 -

    8 32 5 - - 31 - - 31 -

    9 12 4 - - 27 - - 27 -

    10 40 6 - - 21 - - 21 -

    11 51 6 21 2 15 - 50 15 -

    12 59 7 - - 8 - - 8 -

    13 54 6 - - 37 35 - 37 -

    14 16 4 - - 33 - - 33 -

    15 68 7 - - 26 - - 26 -

    16 45 6 45 2 20 - 50 20 -

    17 96 10 - - 10 - - 10 -

    18 33 5 - - 40 35 - 40 -

    19 83 8 - - 32 - - 32 -

    20 77 8 - - 24 - - 24 -

    21 05 3 - - 21 - - 21 -

    22 15 4 76 3 17 - 50 17 -

    23 40 6 - - 11 - - 11 -

    24 43 6 - - 5 - - 5 -

    25 34 5 - - 35 35 - 35 -

    26 44 6 - - 29 - - 29 -

    27 89 9 96 4 20 - 50 20 -

    28 20 4 - - 16 - - 16 -

    29 69 7 - - 9 - - 9 -

    30 31 5 - - 4 - - 4 -

    31 97 10 - - 29 35 - 29 -

    32 05 3 - - 26 - - 26 -

    33 59 7 94 4 19 - 50 19 -

    34 02 2 - - 17 - - 17 -

    35 35 5 - - 12 - - 12 -

    Total 300 768 -

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    Quantitative Techniques

    for ManagementTable 15.28: Simulation Work-sheet for Inventory Problem (Case II)

    Reorder Quantity = 30 units, Reorder Level = 20 units, Beginning Inventory = 45 units

    The simulation of 35 days with an inventory policy of reordering quantity of 35 units at

    the time of inventory level at the end of day is 20 units, as worked out in Table 10.27. The

    table explains the demand inventory level, quantity received, ordering cost, holding cost

    and shortage cost for each day.

    Day

    Random

    Number

    (Demand)

    Demand

    Random

    Number

    (Lead

    Time)

    Lead

    Time

    (Days)

    Inventory

    at end of

    day

    Qty.

    Received

    Ordering

    Cost

    Holding

    Cost

    Shortage

    Cost

    0 - - - - 45 - - - -

    1 58 7 - - 38 - - 38 -

    2 45 6 - - 32 - - 32 -

    3 43 6 - - 26 - - 26 -

    4 36 6 73 3 20 - 50 20 -

    5 46 6 - - 14 - - 14 -

    6 46 6 - - 8 - - 8 -

    7 70 7 - - 31 30 - 31 -

    8 32 5 - - 29 - - 29 -

    9 12 4 - - 25 - - 25 -

    10 40 6 - - 19 - 50 19 -

    11 51 6 21 2 13 - - 13 -

    12 59 7 - - 38 - - 38 -

    13 54 6 - - 32 30 - 32 -

    14 16 4 - - 21 - - 21 -

    15 68 7 - - 21 - - 21 -

    16 45 6 45 2 15 - 50 15 -

    17 96 10 - - 5 - - 5 -

    18 33 5 - - 30 - - 30 -

    19 83 8 - - 22 - - 22 -

    20 77 8 - - 14 - 50 14 -

    21 05 3 - - 11 - - 11 -

    22 15 4 76 3 7 - - 7 -

    23 40 6 - - 31 30 - 31 -

    24 43 6 - - 14 - - 14 -

    25 34 5 - - 20 - 50 20 -

    26 44 6 - - 14 - - 14 -

    27 89 9 96 4 5 - - 5 -

    28 20 4 - - 1 - - 1 -

    29 69 7 - - 24 30 - 24 -

    30 31 5 - - 19 - 50 19 -

    31 97 10 - - 9 - - 9 -

    32 05 3 - - 6 - - 6 -

    33 59 7 94 4 0 - - - 20

    34 02 2 - - 28 30 - 28 -

    35 35 5 - - 23 - - 23 -

    Total 300 683 20

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    Quantitative Techniques

    for Management 15.7 LET US SUM UP

    By going through this lesson it is very true and clear that simulation is a reflection of a

    real system representing the characteristics and behaviour within a given set of conditions.

    The most important point in simulation is that simulation technique is considered as a

    valuable tool because of its wide area of application. The most important approach to

    solving simulation is the Monte Carlo Simulation which can be solved with the help ofprobabilistic and deterministic model. The deterministic simulation mode, have the

    alternatives clearly known in advance where as the probabilistic model is stochastic in

    nature and all decisions are made under uncertainty.

    15.8 LESSON-END ACTIVITIES

    1. Apply the Monte Carlo Simulation technique weather in forecasting.

    2. In the corporate the top Bosses use to take major decisions apply the Simulation

    techniques in designing and performing organisations take an industry like Reliance,

    Tata, Infosys to support your answer.

    15.9 KEYWORDS

    Simulation : A management science analysis that brings into play a

    construction and mathematical model that represents a real-

    world situation.

    Random number : A number whose digits are selected completely at random.

    Flow chart : A graphical means of representing the logic of a simulation

    model.

    15.10 QUESTIONS FOR DISCUSSION

    1. Write True or False against each statement

    (a) Simulations models are built for management problems and require

    management input.

    (b) All simulation models are very expensive.

    (c) Simulation is best suited to analyse complex & large practical problem

    (d) Simulation-generate optimal solution.

    (e) Simulation model can not be very expensive.

    2. Fill in the blank

    (a) Simulation is one of the most widely used ________ analysis book.

    (b) Simulation allow, for the ________ of real world complications.

    (c) System ________ in similar to business gaming.

    (d) Monte Carlo method used ________ number.

    (e) Simulation experiments generate large amount of ________ and information.

    3. Briefly comment on the following

    (a) The problem tackled by simulation may range from very simple to extremely

    complex.(b) Simulations allows us to study the interactive effect of individual components

    or variables in order to determine which one is important.

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    for Management4. The materials manager of a firm wishes to determine the expected mean demand

    for a particular item in stock during the re-order lead time. This information is

    needed to determine how far in advance to re-order, before the stock level is

    reduced to zero. However, both the lead time, and the demand per day for the item

    are random variables, described by the probability distribution.

    Manually simulate the problem for 30 re-orders, to estimate the demand during

    lead time.

    5. A company has the capacity to produce around 300 bikes per day. Daily production

    varies from 295 to 304 depending upon getting the clearance from the final inspection

    department. The probability distribution of bikes passed through final inspection

    per day is given below:

    The finished bikes are transported in a long trailer lorry sufficient to accommodate

    300 mopeds. Simulate the process for 10 days and find:

    a. The average number of bikes waiting in the factory yard.

    b. The average empty space in the lorry.

    6. In a single pump petrol station, it was observed that the inter-arrival times and

    service times are as given in the table. Using the random numbers given, simulate

    the queue behaviour for a period of 30 minutes and estimate the probability of thepump being idle and the mean time spent by a customer waiting to fill petrol.

    Use the following random numbers: 93, 14, 72, 10, 21, 81, 87, 90, 38, 10, 29, 17, 11,

    68, 10, 51, 40, 30, 52 & 71.

    Production per day Probability

    295 0.03

    296 0.04

    297 0.10

    298 0.20

    299 0.25

    300 0.15

    301 0.09

    302 0.07

    303 0.05

    304 0.02

    Inter-arrival time Service time

    Minutes Probability Minutes Probability

    1 0.10 2 0.10

    3 0.17 4 0.23

    5 0.35 6 0.35

    7 0.23 8 0.22

    9 0.15 10 0.10

    Lead time (days) Probability Demand / day (units) Probability

    1 0.45 1 0.15

    2 0.30 2 0.25

    3 0.25 3 0.40

    4 4 0.20

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    Simulation

    ServiceNo. of TV sets requiring service

    Frequency of request

    1 15

    2 15

    3 20

    4 25

    5 25

    Servicing doneNo. of TV sets serviced

    Frequency of service

    1 10

    2 30

    3 20

    4 15

    5 25

    Type of bowling Probability of hitting a boundary

    Over pitched 0.1

    Short-Pitched 0.3

    Outside off stump 0.2

    Outside leg stump 0.15

    Bouncer 0.20

    Attempted Yorker 0.05

    7. A one-man TV service station receives TV sets for repair. TV sets are repaired on

    a first come, first served basis. The observations of the study made over a 100

    day period are given below.

    Simulate a 10 day period of arrival and service pattern.

    8. ABC company stocks certain products. The following data is available:

    a. No. of Units: 0 1 2 3

    Probability: 0.1 0.2 0.4 0.3

    b. The variation of lead time has the following distribution

    Lead time (weeks): 1 2 3

    Probabilities: 0.30 0.40 0.30

    The company wants to know (a) how much to order? and (b) when to order ?

    Assume that the inventory in hand at the start of the experiment is 20 units and 15

    units are ordered closed as soon as inventory level falls to 10 units. No back orders

    are allowed. Simulate the situation for 25 weeks.

    9. A box contains 100 balls of which 20 percent are white, 30 percent are black and

    the remaining are red. Simulate the process for drawing balls at random from the

    box, identify and note the colour and then replace. Use the following 10 random

    numbers to simulate: 52, 60, 02, 3379, 79, 30, 36, 58 and 43.

    10. Rahul, the captain of the cricket team, has the following observations on the number

    of runs scored against type of ball. The bowling probability of a bowler for the type

    of balls bowled are given below.

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    for ManagementThe number of runs scored off each type of ball is shown in the table given below:

    Simulate the game for 3 overs (6 balls per over) and calculate the batting average

    of Rahul.

    15.12 MODEL ANSWERS TO QUESTIONS FOR

    DISCUSSION

    1. (a) True (b) False (c) True (d) False (e) False2. (a) Quantitative (b) Inclusion (c) Simulation (d) Random (e) Data

    15.13 SUGGESTED READINGS

    Ernshoff, J.R. & Sisson, R.L. Computer Simulations Models, New York Macmillan

    Company.

    Gordon G.,System Simulation, Englewood cliffs N.J. Prentice Hall.

    Chung, K.H. Computer Simulation of Queuing SystemProduction & Inventory

    Management Vol. 10.

    Shannon, R. I. Systems Simulation. The act & Science. Englewood Cliffs, N.J. Prentice

    Hall.

    Type of bowling Probability of hitting a boundary

    Over pitched 1

    Short-Pitched 4

    Outside off stump 3

    Out side leg stump 2

    Bouncer 2

    Attempted Yorker 0