MC kLSLN1A1ICN

CN SIMULA1ICN



8



8nCNLSnWAk knANNA
MLCnANICAL DLAk1MLN1
kCLL NC 632




























(S|gnature)
Grade


IN1kCDUC1ICN

1he Lechnlque of slmulaLlon has long been used by Lhe deslgners and Lhe analysLs ln physlcal sclences
and lL promlses Lo become an lnporLanL Lool for Lackllng Lhe compllcaLed problems of manegerlal
declslon maklng Scale models of machlnes have been used Lo slmulaLe Lhe planL layouL and Lhe models
of alrcrafL have been LesLed ln wlnd Lunnels Lo deLermlne Lhelr aerodynamlc characLelsLrlcs SlmulaLlon
whlch can approxlmaLely be called managemenL laboraLory deLermlnes Lhe effecL of Lhe number of
alLernaLe pollcles wlLhouL dlsLrublng Lhe real sysLem lL helps ln selecLlng Lhe besL pollcy wlLh Lhe prlor
assurances LhaL lLs lmplemenLaLlon wlll be beneflclal

Lobably Lhe flrsL lmporLanL appllcaLlon of slmulaLlon was made by !ohn von neumann and SLanlslaw
ulam for sLudylng Lhe Lredlous behavlour of neuLons ln Lhe neuclear shleldlng problem whlch was Loo
complex for maLhemaLlcal analysls WlLh Lhe remarkable success of Lhe Lechnlque on neuLon problem lL
became popular and found many appllcaLlons ln Lhe buslness lndusLry uevelopmenL of dlglLal
compuLers ln 1930s ls furLher responslble for Lhe rapld progress made by Lhe slmulaLlon Lechnlque 1he
range of slmulaLlon appllcaLlon varles form slmple queqlng model Lo models of Lhe large lnLegraLed
sysLem of producLlon

Modellng and slmulaLlon (MS) ls Lhe use of models lncludlng emulaLors proLoLypes
slmulaLors and sLlmulaLors elLher sLaLlcally or over Llme Lo develop daLa as a basls for maklng
managerlal or Lechnlcal declslons 1he Lerms modellng and slmulaLlon are ofLen used
lnLerchangeably
1

1he use of modellng and slmulaLlon (MS) wlLhln englneerlng ls well recognlzed SlmulaLlon
Lechnology belongs Lo Lhe Lool seL of englneers of all appllcaLlon domalns and has been
lncluded lnLo Lhe body of knowledge of englneerlng managemenL MS has already helped Lo
reduce cosLs and lncrease Lhe quallLy of producLs and sysLems and lessons learned are
documenLed and archlved
MS ls a dlsclpllne on lLs own lLs many appllcaLlon domalns ofLen lead Lo Lhe assumpLlon LhaL
MS ls pure appllcaLlon 1hls ls noL Lhe case and needs Lo be recognlzed by englneerlng
managemenL experLs who wanL Lo use MS 1o ensure LhaL Lhe resulLs of slmulaLlon are
appllcable Lo Lhe real world Lhe englneerlng manager musL undersLand assumpLlons
concepLuallzaLlons and lmplemenLaLlon consLralnLs of Lhls emerglng fleld
1echnlcally slmulaLlon ls well accepLed 1he 2006 naLlonal Sclence loundaLlon (nSl) 8eporL on
SlmulaLlonbased Lnglneerlng Sclence"
2
showed Lhe poLenLlal of uslng slmulaLlon Lechnology
and meLhods Lo revoluLlonlze Lhe englneerlng sclence Among Lhe reasons for Lhe sLeadlly
lncreaslng lnLeresL ln slmulaLlon appllcaLlons are Lhe followlng
O uslng slmulaLlons ls as a rule cheaper and safer Lhan conducLlng experlmenLs wlLh a
proLoLype of Lhe real Lhlng Cne of Lhe blggesL compuLers worldwlde ls currenLly
deslgned ln order Lo slmulaLe Lhe deLonaLlon of nuclear devlces and Lhelr effecLs ln
order Lo supporL beLLer preparedness ln Lhe evenL of a nuclear exploslon Slmllar efforLs
are conducLed Lo slmulaLe hurrlcanes and oLher naLural caLasLrophes
O SlmulaLlons can ofLen be even more reallsLlc Lhan LradlLlonal experlmenLs as Lhey allow
Lhe free conflguraLlon of envlronmenL parameLers found ln Lhe operaLlonal appllcaLlon
fleld of Lhe flnal producL Lxamples are supporLlng deep waLer operaLlon of Lhe uS navy
or Lhe slmulaLlng Lhe surface of nelghbored planeLs ln preparaLlon of nASA mlsslons
O SlmulaLlons can ofLen be conducLed fasLer Lhan real Llme 1hls allows uslng Lhem for
efflclenL lfLhenelse analyses of dlfferenL alLernaLlves ln parLlcular when Lhe necessary
daLa Lo lnlLlallze Lhe slmulaLlon can easlly be obLalned from operaLlonal daLa 1hls use of
slmulaLlon adds declslon supporL slmulaLlon sysLems Lo Lhe Lool box of LradlLlonal
declslon supporL sysLems
O SlmulaLlons allow seLLlng up a coherenL synLheLlc envlronmenL LhaL allows for
lnLegraLlon of slmulaLed sysLems ln Lhe early analysls phase vla mlxed vlrLual sysLems
wlLh flrsL proLoLyplcal componenLs Lo a vlrLual LesL envlronmenL for Lhe flnal sysLem lf
managed correcLly Lhe envlronmenL can be mlgraLed from Lhe developmenL and LesL
domaln Lo Lhe Lralnlng and educaLlon domaln ln followon llfe cycle phases for Lhe
sysLems (lncludlng Lhe opLlon Lo Lraln and opLlmlze a vlrLual Lwln of Lhe real sysLem
under reallsLlc consLralnLs even before flrsL componenLs are belng bullL)
1he emerglng dlsclpllne of MS ls based on developmenLs ln dlverse compuLer sclence areas as
well as lnfluenced by developmenLs ln SysLem 1heorles SysLems Lnglneerlng SofLware
Lnglneerlng ArLlflclal lnLelllgence and more 1hls foundaLlon ls as dlverse as LhaL of
englneerlng managemenL and brlngs elemenLs of arL englneerlng and sclence LogeLher ln a
complex and unlque way LhaL requlres domaln experLs Lo enable approprlaLe declslons when lL
comes appllcaLlon or developmenL of MS Lechnology ln Lhe conLexL of Lhls paper 1he
dlverslLy and appllcaLlonorlenLed naLure of Lhls new dlsclpllne someLlmes resulLs ln Lhe
challenge LhaL Lhe supporLed appllcaLlon domalns Lhemselves already have vocabularles ln
place LhaL are noL necessarlly allgned beLween dls[uncLlve domalns A comprehenslve and
conclse represenLaLlon of concepLs Lerms and acLlvlLles ls needed LhaL make up a professlonal
8ody of knowledge for Lhe MS dlsclpllne uue Lo Lhe broad varleLy of conLrlbuLors Lhls
process ls sLlll ongolng
AlLhough Lhe Lerms modellng" and slmulaLlon" are ofLen used as synonyms wlLhln dlsclpllnes
applylng MS excluslvely as a Lool wlLhln Lhe dlsclpllne of MS boLh are LreaLed as lndlvldual
and equally lmporLanL concepLs Modellng ls undersLood ls Lhe purposeful absLracLlon of
reallLy resulLlng ln Lhe formal speclflcaLlon of a concepLuallzaLlon and underlylng assumpLlons
and consLralnLs MS ls ln parLlcular lnLeresLed ln models LhaL are used Lo supporL Lhe
lmplemenLaLlon of an execuLable verslon on a compuLer 1he execuLlon of a model over Llme ls
undersLood as Lhe slmulaLlon Whlle modellng LargeLs Lhe concepLuallzaLlon slmulaLlon
challenges malnly focus on lmplemenLaLlon ln oLher words modellng resldes on Lhe
absLracLlon level whereas slmulaLlon resldes on Lhe lmplemenLaLlon level
ConcepLuallzaLlon and lmplemenLaLlon modellng and slmulaLlon are Lwo acLlvlLles LhaL are
muLually dependenL buL can noneLheless be conducLed by separaLe lndlvlduals ManagemenL
and englneerlng knowledge and guldellnes are needed Lo ensure LhaL Lhey are well connecLed
Llke an englneerlng managemenL professlonal ln sysLems englneerlng needs Lo make sure LhaL
Lhe sysLems deslgn capLured ln a sysLems archlLecLure ls allgned wlLh Lhe sysLems developmenL
Lhls Lask needs Lo be conducLed wlLh Lhe same level of professlonallsm for Lhe model LhaL has
Lo be lmplemenLed as well
ln summary Lhree acLlvlLles have Lo be conducLed and orchesLraLed Lo ensure success a model
musL be produced LhaL capLures formally Lhe concepLuallzaLlon a slmulaLlon musL lmplemenL
Lhls model and managemenL processes musL ensure LhaL model and slmulaLlon are
lnLerconnecLed and on Lhe currenL sLaLe (whlch means LhaL normally Lhe model needs Lo be
updaLed ln case Lhe slmulaLlon ls changed as well)
MS ln modern mlllLary organlzaLlons ls parL of Lhe acqulslLlon/procuremenL sLraLegy
Speclflcally MS ls used Lo conducL LvenLs and LxperlmenLs LhaL lnfluence 8equlremenLs and
1ralnlng for mlllLary SysLems As such MS ls consldered an lnLegral parL of sysLems
englneerlng of mlllLary SysLems

WnA1 IS SIMULA1ICN ?

SlmulaLlon ls an lmlLaLlon of reallLy A chlldren cycllng park wlLh varlous crosslngs and slgnals ls Lhe
slmulaLed problem of Lhe clLy Lrafflc sysLem ln Lhe laboraLory a number of experlmenLs are performed
on slmulaLed models Lo deLermlne Lhe behavlour of Lhe real sysLem ln Lrue envlornmenL A slmple
lllusLraLlon ls Lhe LesLlng of an alrcrafL model lnner wlnd Lunnel from whlch we deLermlne Lhe
performance of Lhe acLual alrcrafL under real operaLlng condlLlons laneLorlum shows a beauLlful
slmulaLlon of Lhe planeL sysLem LnvlronmenLs ln Lhe geologlcal garden and ln Lhe meuseum of naLural
hlsLory are Lhe oLher example of slmulaLlon


SIMULA1ICN AND 8USINLSS kCCLSS CnANGL

SlmulaLlon ls a Lool for managlng change racLlLloners ln buslness process managemenL know
Lhe crlLlcal lmporLance of carefully leadlng organlzaLlons and people from old Lo new ways of
dolng buslness and slmulaLlon ls one way Lo acceleraLe change 1hls capablllLy derlves largely
from Lhe ablllLy of slmulaLlon Lo brlng clarlLy Lo Lhe reasons for change SlmulaLlon provldes more
Lhan an answer lL shows you how Lhe answer was derlved lL enables you Lo Lrace from cause Lo
effecL and lL allows you Lo generaLe explanaLlons for declslons

SlmulaLlon ls a componenL of a buslness rules englne ?ou can vlew slmulaLlon as a soluLlon Lo
boLh offllne deslgn and onllne operaLlonal managemenL problems Lnglneers derlve rules from
Lhe menLal models experLs provlde on how Lhelr processes work and how Lo make declslons LhaL
wlll help Lhem forecasL how a change mlghL lmpacL Lhose declslons lormallzlng and slmulaLlng
Lhese models makes Lhe auLomaLlon of buslness rules more robusL ln Lhe deslgn of new buslness
rules slmulaLlon provldes a way Lo valldaLe LhaL processes wlll work as deslgned

SlmulaLlon enables Lhe successful use of organlzaLlonal lmprovemenL programs such as Slx
Slgma 1he acLlvlLles of deflne measure analyze lmprove and conLrol depend on Lhe earnesL
parLlclpaLlon of everyone lnvolved Lo manage quallLy ln parLlcular Lhe lasL Lhree (analyze
lmprove conLrol) revolve around ldenLlflcaLlon of rooL causes comlng up wlLh new pollcles and
pracLlces and puLLlng conLrols ln place Lo keep quallLy hlgh Clearly slmulaLlon can play Lhe lmporLanL
role of reduclng Lhe rlsk of change and managlng change

1hls arLlcle presenLs background maLerlal on slmulaLlon lLs relaLlon Lo modellng Lhe Lechnology of
slmulaLlon and some pracLlcal appllcaLlons ln buslness process managemenL




SIMULA1ICN Lk1LNDS 8USINLSS kCCLSS MCDLLING IN1C VALIDA1ICN

Modellng ls a Lool for represenLaLlon Models deflne Lhe boundarles of Lhe sysLem you wanL Lo
slmulaLe 8uslness process modellng pracLlLloners and sofLware vendors have creaLed a wealLh of
formallsms sofLware Lools and meLhodologles for undersLandlng whaL Lo model how Lo model
and ways Lo conducL analyses wlLh models 1he arLlcles publlshed on Lhls webslLe provlde many
examples of Lhese Lools of Lhe Lrade Modellng ls a necessary componenL of any slmulaLlon buL lL
ls noL sufflclenL for conducLlng a slmulaLlon 1o slmulaLe one needs a slmulaLlon englne whlch ls
descrlbed ln Lhe secLlon below

Models for slmulaLlon can be slmple or complex Some modellng and slmulaLlon Lools allow you
Lo creaLe deLalled models of buslness processes wlLh a hlgh degree of fldellLy Lo acLual processes
CLher slmulaLlons are slmple calculaLlons of lndlcaLors or meLrlcs Whlle lL seems reasonable LhaL
a hlghfldellLy model would be Lhe besL Lhls does noL mean LhaL Lhe model musL be complex A
common mlsLake ln modellng and slmulaLlon ls Lo bulld an overly complex model resulLlng ln an
overabundance of daLa and greaL confuslon ln analysls of Lhe resulLs lf Lhe model doesn'L represenL Lhe
behavlor of Lhe sysLem of lnLeresL lL ls useless for analysls of LhaL sysLem ln
addlLlon overly complex models are unwleldy slow and dlfflculL Lo analyze SlmulaLlon experLs
are effecLlve aL flndlng Lhe rlghL model slze and complexlLy needed Lo represenL Lhe problem Lo be
addressed wlLhouL unnecessary deLall 1he key faclllLy LhaL experLs develop ls an ablllLy Lo dlsLlll
realworld problems and exLracL Lhe essence of Lhe problem so LhaL lL can be modeled slmply buL
sLlll reLaln Lhe dynamlc behavlor needed Lo examlne lmporLanL problems Some Lools ald Lhe user
ln Lhls Lask by provldlng LemplaLes or guldes LhaL encapsulaLe Lhls experLlse

SlmulaLlon ls a Lool for Llme and space compresslon boLh of whlch are needed for robusL
valldaLlon Successful buslness process LransformaLlons are Lhose LhaL have wlLhsLood Lhe LesL of
Llme and solve real problems 1hey have been valldaLed Lhrough monLhs or years of operaLlon
wlLh a demonsLraLed reLurnonlnvesLmenL new lmplemenLaLlons of Lhese processes aren'L rlsky
because users know Lhey wlll work as expecLed Powever when a new or lnnovaLlve process ls
devlsed lL's lmposslble Lo Lell wheLher an asserLed 8Cl can ever be reallzed SlmulaLlon provldes
a mechanlsm for robusL valldaLlon under reallsLlc condlLlons and can subsLanLlally reduce Lhe rlsk
of deploylng a new process

valldaLlon of a buslness process can be done ln many ways buL a sLrucLured meLhod for
examlnaLlon lnvolves a serles of quallLaLlve or quanLlLaLlve experlmenLs A buslness problem
sLaLemenL ldenLlfles Lhe varlables LhaL experlmenLers change as well as Lhe meLrlcs LhaL lndlcaLe
success or fallure and Lhe valldaLlon exerclse ls compleLed Lhrough a serles of slmulaLlons lloL
pro[ecLs wlLh llmlLed daLa seLs conducLed ln lowrlsk laboraLory envlronmenLs provlde daLa LhaL
supporL cosL/beneflL analyses

Slnce Lhere are a large number of posslble alLernaLlves slmulaLlons are llmlLed by a careful
selecLlon of varlables and Lhe appllcaLlon of deslgnofexperlmenLs Lechnlques 1he hard
consLralnLs are Llme and space and achlevlng a compresslon of boLh can only be done one way
Lhrough modellng and slmulaLlon




1LS CI SIMULA1ICN MCDLLS

SlmulaLlon ls used Lo descrlbe a broad range of capablllLles 8y deflnlLlon Lhese all lnvolve
reproduclng or pro[ecLlng Lhe behavlor of a modeled sysLem CompuLerbased slmulaLlons can
lnvolve everyLhlng from slmple addlLlon of a few numbers Lo lnLenslve compuLaLlons LhaL
challenge Lhe fasLesL compuLlng machlnes currenLly avallable Models for slmulaLlon can be
classlfled along four dlsLlncL dlmenslons

SysLem of lnLeresL 1he sysLem of lnLeresL can be one of Lhe followlng
- a physlcal sysLem for example a supply chaln or producLlon llne
- a managemenL sysLem for example a C8M process or
- a meLamodel for example rules LhaL esLabllsh wheLher a model ls formulaLed properly

vlslblllLy lnLernally a model may be
- LransparenL LhaL ls a descrlpLlon of acLual mechanlsms or
- 'blackbox' LhaL ls a descrlpLlon LhaL resulLs ln Lhe same behavlor as Lhe real sysLem buL
lnLernally does noL model Lhe acLual mechanlsms

robablllLy A model can be
- probablllsLlc LhaL ls a slngle seL of lnpuLs LhaL resulLs ln many posslble ouLpuLsLhe
ouLpuLs exhlblL varlaLlons LhaL are descrlbed uslng sLaLlsLlcs or
- deLermlnlsLlc LhaL ls Lhe same seL of lnpuLs resulLs ln Lhe same seL of ouLpuLs Lhe
ouLpuLs are causally deLermlned by precedlng evenLs

uynamlcs A model can be
- sLeadysLaLe LhaL ls Lhe ouLpuLs show no varlaLlon over Llme and space or
- dynamlc LhaL ls Lhe ouLpuLs vary over Llme and across space





SS1LM CI IN1LkLS1

1he sysLem of lnLeresL deLermlnes Lhe klnd of lnformaLlon generaLed ln a slmulaLlon SlmulaLlon of
buslness process models ls noL Lhe same as slmulaLlon of Lhe underlylng physlcal sysLem LhaL Lhe
buslness processes manage ln a supply chaln slmulaLlon lL ls necessary Lo model Lhe physlcal
sysLem LhaL ls Lhe movemenL of maLerlal from node Lo node ln Lhe supply neLwork 1hls allows us
Lo undersLand Lhe dynamlcs of lnvenLory movemenL bullwhlp effecLs eLc SomeLlmes Lhe
physlcal sysLem ls Lhe focus of Lhe slmulaLlon efforL Lo deLermlne for example Lhe besL locaLlon
for a new dlsLrlbuLlon cenLer or Lo undersLand Lhe dlfferences ln machlne performance ln a
producLlon llne ln oLher cases Lhe sysLem of lnLeresL ls Lhe managemenL process lncludlng Lhe
daLa used ln Lhe process lor example call cenLer process models have been used Lo undersLand
hardware and human resource requlremenLs and how besL Lo deal wlLh peak call perlods MeLa
model slmulaLlon ls common for example ln checklng Lhe conflguraLlon or connecLlvlLy ln
graphlcally consLrucLed models slmulaLlng 'a model of a model' ls useful when Lhe focus ls on
Lhe mechanlcs or archlLecLure of consLrucLlng models raLher Lhe behavlor of Lhe model

VISI8ILI1

vlslblllLy of model sLrucLure ls lncreaslngly lmporLanL Lo Lhe buslness communlLy 8uslness
managers wanL explanaLlons of auLomaLed declslons and lmplemenLlng Lhls capablllLy requlres
vlslblllLy lnLo model sLrucLure SLlll ln many slLuaLlons lL ls essenLlal LhaL a model provlde only an
answer and Lhe fasLer lL can do so Lhe beLLer uaLadrlven models lncludlng common regresslon
models and more general neural neLwork models sulL Lhls purpose well and can be prepared
qulckly lf Lhere are sufflclenL daLa Lo ldenLlfy Lhe lnLernal model sLrucLure 1hese blackbox models
come wlLh Lhelr own learnlng procedures and have been wldely applled ln pracLlce because Lhey
are easy Lo use and hlghly effecLlve 8uL Lhese models hlde Lhe manner ln whlch a resulL was
obLalned ln Lhls sense Lhey are much llke a human braln LhaL ls we don'L always know Lhe lnner
worklngs of a parLlcular reasonlng process buL we know LhaL lL occurs wlLh greaL efflclency and
regularlLy 8lackbox models learn repeaLlng paLLerns and correlaLlons among daLa and have Lhelr
own lnLernal way of represenLlng Lhese relaLlonshlps 1he lnLernal represenLaLlon may provlde few
or no clues as Lo Lhe causal chaln LhaL resulLed ln Lhe observed model behavlor

ln conLrasL LransparenL mechanlsLlc models are descrlpLlons of Lhe acLual processes LhaL occur
based on naLural laws and sclenLlflc prlnclples Models of Lhe Lra[ecLory of a mlsslle a known
chemlcal reacLlon or Lhe replenlshmenL of lnvenLory are LransparenL ln Lhe sense LhaL modelers
can refer Lo Lhe sLrucLure of Lhe model lLself Lo galn lnslghL lnLo Lhe behavlor LhaL Lhe sysLem
exhlblLs 1he parameLers ln mechanlsLlc models have speclflc meanlng LhaL can be lnLerpreLed ln
Lerms of Lhe real sysLem Lo beLLer undersLand why a parLlcular resulL was obLalned WlLh Lhls klnd
of model lL ls posslble Lo auLomaLe Lhe generaLlon of explanaLlons and Lo ldenLlfy rooL causes of
an observed behavlor

kC8A8ILI1

robablllLy plays an lmporLanL role ln slmulaLlon [usL as lL does ln real llfe Models of reasonable
slze and complexlLy exhlblL a seL of posslble behavlors LhaL ln general are unknown unless Lhe
model ls slmulaLed Models also have valldlLy consLralnLs LhaL ldenLlfy when Lhey are good
represenLaLlons of Lhe real world and when Lhey conLradlcL or lncompleLely descrlbe Lhe real
sysLem ln order Lo undersLand Lhe range of posslble behavlors lL would be useful Lo slmulaLe Lhe
model under all posslble condlLlons Powever Lhls ls lmpracLlcal excepL for Lhe slmplesL models
lnsLead pracLlLloners use Lechnlques such as MonLe Carlo analysls ln Lhls Lechnlque seLs of
model lnpuLs are sampled randomly from sLaLlsLlcal dlsLrlbuLlons Lo deflne mulLlple slmulaLlon
scenarlos 1he scenarlos are slmulaLed and Lhe resulLs summarlzed sLaLlsLlcally Lo creaLe an overall
undersLandlng of Lhe range of behavlors LhaL can be reallzed wlLh Lhe model Any of Lhe
Lypes of models descrlbed above can be made sLochasLlc by randomly selecLlng parameLer
values each Llme a slmulaLlon ls run lor example a buslness process model LhaL lncludes an
average value for 'order processlng Llme' mlghL lnsLead sample Lhe order processlng Llme from
a normal probablllLy dlsLrlbuLlon wlLh a predeflned mean and sLandard devlaLlon WlLhouL Lhe
randomness Lhe model ls deLermlnlsLlc LhaL ls Lhe slmulaLed order processlng Llme wlll always
be Lhe same regardless of how many orders are processed





DNAMICS

1he remalnlng modellng dlmenslon dynamlcs ls Lhe mosL lmporLanL ueveloplng models ls a
challenge buL many models used ln pracLlce are sLaLlc or sLeadysLaLe models raLher Lhan
dynamlc models lormulaLlng a model LhaL can show Lhe change of lmporLanL buslness meLrlcs
over Llme or across space (eg geographlcally) ls a unlque challenge MosL spreadsheeL models
are sLaLlc ln naLure as are slmple aggregaLlons or daLa consolldaLlons LhaL are someLlmes
descrlbed as slmulaLlon SLeadysLaLe models are valuable buL Lhey hlde or gloss over Lhe acLual
behavlor LhaL occurs ln a real dynamlc process lor example many sLockouL condlLlons LhaL
occur ln supply chalns are caused by sudden changes and demand swlngs and Lhe bullwhlp
effecL ls due ln parL Lo Llme delays LhaL llmlL vlslblllLy lnLo lmporLanL lnformaLlon Models can be used
offllne or onllne Some modellng Lools conLaln speclallzed supporL for on
llne use ln offllne analysls a model ls consLrucLed callbraLed and slmulaLed wlLhouL Lhe need
for connecLlon Lo realLlme daLa or evenLs SLraLeglc and LacLlcal plannlng exerclses make use of
modellng and slmulaLlon buL Lhe Llme frame for declslons ls long (on Lhe order of weeks or
monLhs) so lL's sufflclenL Lo work ln baLch mode collecLlng daLa from daLabases when needed
conducLlng Lhe analyses lndependenLly and publlshlng a reporL on Lhe resulLs CperaLlonal
appllcaLlons of models requlre supporL for evenLs LransacLlons and perslsLence 1hese feaLures
add a loL of overhead and lnfrasLrucLure Lo a model buL are essenLlal Lo Lhe lmplemenLaLlon of
slmulaLlon capablllLles ln Lhe realLlme evenLdrlven world llgure 1 shows how a model of Lhe
physlcal sysLem and a model for managlng LhaL sysLem work LogeLher ln real Llme A slmulaLlon of Lhe
SysLem Model runs ln parallel wlLh Lhe SysLem of lnLeresL AcLual and slmulaLed meLrlcs are
compared and evaluaLed ln a ManagemenL Model LhaL ldenLlfles sLeps Lo Lake Lo respond ln a
manner LhaL drlves Lhe sysLem meLrlcs Lowards Lhelr deslred values 1he Lwo boldsLrlped arrows
hlghllghL Lhe facL LhaL Lhe archlLecLure supporLs boLh auLomaLed and by dlsconnecLlng Lhe arrows
and lnserLlng a human declslonmaker manual use

SIMULA1ICN AND C1IMI2A1ICN

A common quesLlon asked abouL slmulaLlon ls WhaL ls Lhe dlfference beLween slmulaLlon and
opLlmlzaLlon? 1here are boLh Lechnlcal and pracLlcal answers Lo Lhls quesLlon Conslder Lhe
slmple equaLlon

y f(x)

ln Lhls equaLlon x represenLs Lhe lnpuL Lo a model Lhe model ls represenLed by Lhe funcLlon f and
y ls Lhe ouLpuL of LhaL model lor example x may be Lhe replenlshmenL LargeL for an lnvenLory
managemenL process f a model of Lhe replenlshmenL process and y Lhe level of lnvenLory LhaL
resulLs 8oLh opLlmlzaLlon and slmulaLlon may be used Lo explore Lhe behavlor of Lhe funcLlon or
model f

Cne way Lo undersLand Lhe behavlor of Lhe funcLlon f ls Lo conducL 'whaLlf' slmulaLlons by
enLerlng dlfferenL values for x and Lhen examlnlng Lhe values of y LhaL are generaLed as ouLpuL
1haL ls whaL ls Lhe value of y lf Lhe value of x ls '3'? ln a reallsLlc slLuaLlon Lhere may be many
lnpuLs (x) and ouLpuLs (y) and Lhe naLure of Lhe funcLlon (f) may be complex

AnoLher way Lo undersLand Lhe behavlor of Lhe funcLlon f ls Lo conducL 'lfwhaL' opLlmlzaLlons by
seLLlng a LargeL value for y Lhen searchlng for Lhe values of x LhaL resulL ln Lhe LargeL value for y
1haL ls lf Lhe deslred value of y ls '10' whaL wlll be Lhe value of x? Agaln Lhe number of lnpuLs (x)
and ouLpuLs (y) may be large Lhe model complex and Lhe search Lechnlques can be elaboraLe

CpLlmlzaLlon ls appeallng because Lhe resulL ls Lhe value of Lhe model (or by lnference Lhe real
sysLem) lnpuL needed Lo achleve a deslred ouLpuL SlmulaLlon can be used Lo achleve Lhe same
goal buL requlres efforL Lo slmulaLe many alLernaLlves Lo flnd Lhe value of x needed Lo obLaln a
LargeL value for y 1hus opLlmlzaLlon glves a dlrecL answer Lo Lhe quesLlon of how Lo reach a
LargeL Powever Lhe models used ln opLlmlzaLlon are generally slmpllfled and lL lsn'L always clear
why Lhe soluLlon ls 'besL' SlmulaLlon ls appeallng because Lhe models can be rlch ln sLrucLure
and deLall for example Lhey may provlde speclflc lnformaLlon abouL cause and effecL LhaL ls
essenLlal Lo explalnlng an opLlmum Powever deLalled models can Lake a long Llme Lo slmulaLe
and are lmpracLlcal lf Lhe model ls Loo blg


SIMULA1ICN 1LCnNCLCG

CompuLerbased slmulaLlon requlres an englne Lo drlve Lhe calculaLlon of model varlables 1he
Lwo meLhods for dolng slmulaLlon are

SysLems Analysls conLlnuous and dlscreLe slmulaLlons based on maLhemaLlcal models and numerlcal
meLhods
ulscreLe LvenL dlscreLe slmulaLlons based on an evenLhandllng meLhod


SS1LMS ANALSIS

SysLems analysls here refers Lo maLhemaLlcal meLhods for modellng based on sysLems Lheory
developed sLarLlng ln Lhe early 1960s 8oLh conLlnuous Llme and dlscreLe Llme slmulaLlon models can be
consLrucLed SysLems Lhlnklng and sysLems analysls meLhods are eleganL and LlmeLesLed
ln managemenL sclence lL has spawned Lhe fleld known as 'sysLem dynamlcs' whlch ls boLh a
perspecLlve and a seL of Lools and meLhodologles for bulldlng slmulaLlon models of complex
sysLems of lnLeresL numerous sofLware Lools have been developed Lo supporL model bulldlng and
slmulaLlon based on sysLems analysls Many of Lhese allow Lhe user Lo consLrucL models
graphlcally so LhaL Lhe user does noL have Lo wrlLe Lhe maLhemaLlcal equaLlons or fully undersLand
Lhe numerlcal meLhods by whlch Lhe equaLlons are solved durlng slmulaLlon 1hese Lools have
made Lhe Lechnology accesslble Lo a wlder range of users and creaLed a vasL llLeraLure
addresslng numerous englneerlng and buslness managemenL lssues An example of Lhls Lype of
model and lLs slmulaLlon ls shown ln llgure 2 ln Lhls example a model of Lhe process LhaL
creaLes Lhe demand for mlcroprocessors ls shown along wlLh Lhe lnfluences LhaL resulL ln buyer
need








DISCkL1L LVLN1 SIMULA1ICN

1he dlscreLe evenL slmulaLlon approach ls compuLaLlonally efflclenL and has Lhe added advanLage
of belng lnLulLlve and Lhus easy Lo undersLand 1he ldea behlnd dynamlc dlscreLe evenL
slmulaLlon ls slmple llrsL a modeler speclfles graphlcally or ln code Lhe sequence of acLlvlLles
and evenLs LhaL Lake place ln Lhe sysLem of lnLeresL uaLa lnpuLs are provlded and based on Lhe
Llmlng of speclfled evenLs an englne Llmeorders Lhe evenLs ln a queue SlmulaLlon conslsLs of
popplng each evenL off Lhe queue Lhen performlng whaLever acLlvlLy was speclfled lor example
Lo model an order fulflllmenL process (llgure 3) Lhe user selecLs Lask or acLlvlLy blocks from a
paleLLe connecLs Lhem LogeLher and speclfles how ofLen evenLs occur or how long a speclflc
acLlvlLy Lakes ln Lhe example shown ln llgure 3 Lelephone orders are emlLLed from Lhe flrsL block
(conLalnlng an lcon of a Lelephone) aL a raLe speclfled by Lhe user Lhen pass Lhrough subsequenL
blocks LhaL represenL sales order processlng manufacLurlng and dlsLrlbuLlon SLaLlsLlcs on
acLlvlLles cosLs and oLher lmporLanL meLrlcs can be evaluaLed

Craphlcal consLrucLlon of slmulaLlon models ls an lnnovaLlon LhaL has greaLly advanced Lhe use of
slmulaLlon Craphlcal represenLaLlons can be caLegorlzed lnLo Lwo groups

'8lock' dlagrams represenL Lhe equaLlons and sequence of calculaLlons LhaL ln Lurn
represenL Lhe sysLem of lnLeresLused wlLh Lhe sysLems analysls slmulaLlon approach
SLaLe dlagrams represenL Lhe evenLs and LranslLlons beLween evenLs LhaL occur ln Lhe
sysLem of lnLeresLused wlLh Lhe dlscreLe evenL slmulaLlon approach

An example of Lhe flrsL Lype ls shown ln llgure 2 1hls lmage LranslaLes dlrecLly lnLo a seL of
equaLlons LhaL are solved uslng Lhe sysLems analysls approach An example of Lhe second Lype ls
shown ln llgure 3 1he speclflcaLlon of acLlvlLles Lhelr expllclL connecLlon ln a sequence and Lhe
daLa provlded as lnpuL such as evenL Llmlng and lnpuL daLa are sufflclenL Lo perform a slmulaLlon
of Lhe model uslng a dlscreLe evenL slmulaLlon englne


LNnANCLMLN1S 1nA1 INCkLASL SIMULA1ICN VALUL

ln addlLlon Lo graphlcal user lnLerfaces Lhere are a number of enhancemenLs Lo slmulaLlon and
slmulaLlon Lools LhaL beneflL users 1hese enhancemenLs cover Lhe llfe cycle for appllcaLlon of a
slmulaLlon model from deflnlLlon of Lhe model Lhrough valldaLlon and conflguraLlon of Lhe model
for declslon supporL Lo onllne deploymenL and conLlnuous lmprovemenL of Lhe model Model
deflnlLlon challenges lnclude selecLlng Lhe proper Lype ldenLlflcaLlon of processes
esLabllshlng Lhe level of deLall or resoluLlon decldlng how Lo absLracL processes and obLalnlng
daLa for lnpuL Model Lypes musL be [udged based on knowledge of Lhe pros and cons as
descrlbed ln Lhe secLlons above ueflnlLlon of processes and level of deLall or absLracLlon ls alded
by Lools LhaL elLher come wlLh LemplaLes or allow you Lo deflne your own 8eference models and
lndusLry sLandards LhaL deflne generlc processes slmpllfy boLh modellng and Lhe conducL of
slmulaLlon sLudles by maklng lL easler Lo compare resulLs wlLhln Lhe same sLudy or wlLh oLhers
who use Lhe same LemplaLes or references uaLa collecLlon reducLlon and organlzaLlon are ofLen
boLLlenecks ln slmulaLlon sLudles WlLhouL lnsLlLuLlng conLrols Lo manage daLa Lhere are plLfalls boLh on
Lhe fronLend where users fall vlcLlm Lo daLa 'safarls' and on Lhe back end where analysls paralysls
lnLerferes wlLh Lhe goal of flnallzlng resulLs uependlng on Lhe model slze Lhere may be many daLa
elemenLs Lo collecL and lL ls common for Leams Lo search endlessly for deLalled daLa LhaL Lhey wlll never
flnd 1he naive Lendency Lo model everyLhlng and Lo collecL Loo much daLa dooms many slmulaLlon
sLudles Lo fallure

Lspeclally for large models lL makes sense Lo organlze daLa lnpuL ln such a way LhaL you geL Lhe
model up and runnlng qulckly Lhen leL slmulaLlon deLermlne whaL addlLlonal daLa are requlred
LffecLlve pracLlLloners of slmulaLlon have a good undersLandlng of Lhe sysLem belng modeled and
have sLrucLured Lhe daLa requlred for slmulaLlon such LhaL only a few daLa elemenLs are needed Lo
geL sLarLed 1hls subseL of daLa should be sufflclenL Lo obLaln good quallLaLlve valldaLlon of Lhe
model whlch can Lhen be followed by lncremenLal lmprovemenLs leadlng Lo a wellcallbraLed
model SlmulaLlon resulLs can easlly flll a hard dlsk wlLh daLa so lL's a good ldea Lo flrsL deflne
whaL you wanL Lo analyze Lhen deslgn Lhe slmulaLlon experlmenLs Lo obLaln speclflc daLa for
analysls

ueslgn of experlmenL Lechnlques have been used Lo sLrucLure and organlze slmulaLlon
experlmenLs 1hese meLhods are sLepbysLep lnsLrucLlons for formulaLlng a slmulaLlon sLudy and
for evaluaLlng Lhe resulLs Lo demonsLraLe sLaLlsLlcal slgnlflcance Some sofLware Lools provlde
guldance ln seLLlng up and runnlng slmulaLlons wlLhln a deslgn of experlmenLs framework llgure
4 shows a varlanL of a deslgn of experlmenLs approach 1he flrsL sLep ls compleLed wlLh
knowledge of modellng and slmulaLlon buL wlLhouL Lhe need for sofLware Lools ueflnlLlon of Lhe
buslness problems ls essenLlal and dlrecLly deLermlnes Lhe model parameLers LhaL wlll be varled
and Lhe model meLrlcs LhaL wlll be analyzed

A problem sLaLemenL ls ofLen posed as one or more quesLlons Lo be answered Lhrough slmulaLlon
lor example a buslness problem sLaLemenL for a supply chaln slmulaLlon sLudy mlghL be

WhaL ulsLrlbuLlon CenLer neLwork lncludlng order managemenL pollcles and
replenlshmenL sLraLegles are requlred Lo ensure proflLablllLy and malnLaln a
93 onLlme performance for dellvery of chlp seLs Lo global cusLomers assumlng
a maxlmum 20 forecasL (ln)accuracy?

ln Lhls sLaLemenL Lhe LexL ln bold ldenLlfles lnpuL varlables or parameLers LhaL we can change ln a
slmulaLlon model and Lhe LexL ln lLallcs ldenLlfles ouLpuL meLrlcs LhaL are observed Lo deLermlne
Lhe lmpacL of Lhe changes leedback loops are provlded because lL ls always necessary Lo ask
wheLher Lhe model ls correcL and lf Lhe buslness problem ls properly deflned A solld deslgn of
experlmenLs approach mlnlmlzes Lhe modellng and slmulaLlon efforL and adds robusLness Lo Lhe
resulLs


SIMULA1ICN A1 1nL DCD

1he uS ueparLmenL of uefense has a keen lnLeresL ln slmulaLlon as a Lool for forecasLlng and
plannlng A good example of Lhelr appllcaLlon of slmulaLlon ls ln Lhe !olnL SlmulaLlon SysLem
(!SlMS www[slmsmll) whose purpose ls Lo supporL Lralnlng by provldlng an envlronmenL
lndlsLlngulshable Lo Lhe Lralnlng audlence from Lhe real world !SlMS applles Lhe uou's Plgh
Level ArchlLecLure (PLA) for dlsLrlbuLed slmulaLlon ln Lhls archlLecLure several !SlMS modules
runnlng on mulLlple machlnes locaLed ln geographlcally dlsparaLe locaLlons musL communlcaLe
and sLay synchronlzed 1he PLA ensures Lhe necessary synchronlzaLlon creaLlng a synLheLlc
baLLlespace LhaL can be used Lo creaLe vlrLual operaLlng scenarlos 1here are obvlous parallels
beLween Lhls Lype of appllcaLlon and slmulaLlonbased declslon supporL sysLems ln buslness
process managemenL Cne hlLech company envlslons such a sysLem for managemenL of lLs
enLlre supply chaln and anLlclpaLes reallzlng Lhe archlLecLure of llgure 1 Lo allow managemenL Lo
foresee Lhe sLaLe of Lhe enLlre neLwork for Lhe purposes of malnLalnlng neLwork healLh and
meeLlng cusLomer expecLaLlons



WnA1 1nL IU1UkL nCLDS

1he SocleLy for Modellng and SlmulaLlon lnLernaLlonal (prevlously Lhe SocleLy for CompuLer
SlmulaLlon) recenLly celebraLed lLs 30Lh annlversary wlLh a speclal lssue descrlblng Lhe hlsLory of
slmulaLlon and predlcLlng lLs fuLure Surprlslngly 8ernard Zelgler resldenL of Lhe SocleLy
doesn'L call for new mlracles of Lechnology or envlslon fanLasLlc advances ln modellng and
slmulaLlon (Zlegler 8 2003 Modellng SlmulaLlon volume 1 number 3) lnsLead he noLes
LhaL Loday's problems are much llke Lhose ln Lhe pasL

?ou mlghL be surprlsed Lo flnd LhaL many of Lodays hoL problems were preLLy
much of concern from Lhe sLarL and LhaL many of Lhe proposed soluLlons are
really elaboraLe verslons of ldeas LhaL orlglnaLed early on 1hls reallzaLlon
mlghL be sllghLly humbllng 8uL on Lhe oLher hand Lhe sense of conLlnulLy
wlLh Lhe pasL and Lhe fuLure mlghL prove exLremely saLlsfylng"

1he mosL useful appllcaLlons of buslness process modellng and slmulaLlon wlll llkely be Lhose LhaL
furLher elaboraLe on ldeas LhaL have already been explored buL for any number of reasons have
never been fully elaboraLed ln Lhe same lssue Zelgler also menLlons LhaL Lhe exponenLlal
growLh ln knowledge we are experlenclng ls ln no small measure due Lo Lhe growLh ln compuLer
Lechnology and Lhe modellng and slmulaLlon paradlgm lL enabled" We can now do Lhlngs wlLh
slmulaLlon LhaL were unLhlnkable even a couple of years ago Lxamples lnclude Lhe prevalldaLlon
uslng slmulaLlon of reenglneered buslness processes well before Lhey ever geL lmplemenLed Lhe
ellmlnaLlon of proposed supply neLwork deslgns because slmulaLlon shows LhaL Lhey wlll noL work
and onllne realLlme slmulaLlonbased declslon supporL LhaL enables managers and cusLomers Lo
know wlLh confldence LhaL lnvenLory wlll be avallable when and where Lhey need lL


1he 8M markeL has seen an up Llck ln lnLeresL ln modellng Lools LhaL suggesLs greaLer
accepLance of reference model sLandards broader appeal of modellng concepLs and more
appreclaLlon for Lhe beneflLs LhaL can be derlved SlmulaLlon ls a sLralghLforward exLenslon Lo
sLaLlc modellng efforLs and one LhaL subsLanLlally enhances beneflLs by leveraglng exlsLlng models
and enabllng more robusL analyses LhaL can be obLalned ln no oLher way


MCN1L CAkLC SIMULA1ICN
MonLe Carlo meLhods (or MonLe Carlo experlmenLs) are a class of compuLaLlonal algorlLhms
LhaL rely on repeaLed random sampllng Lo compuLe Lhelr resulLs MonLe Carlo meLhods are
ofLen used ln compuLer slmulaLlons of physlcal and maLhemaLlcal sysLems 1hese meLhods are
mosL sulLed Lo calculaLlon by a compuLer and Lend Lo be used when lL ls lnfeaslble Lo compuLe
an exacL resulL wlLh a deLermlnlsLlc algorlLhm
1
1hls meLhod ls also used Lo complemenL Lhe
LheoreLlcal derlvaLlons
MonLe Carlo meLhods are especlally useful for slmulaLlng sysLems wlLh many coupled degrees
of freedom such as flulds dlsordered maLerlals sLrongly coupled sollds and cellular sLrucLures
(see cellular oLLs model) 1hey are used Lo model phenomena wlLh slgnlflcanL uncerLalnLy ln
lnpuLs such as Lhe calculaLlon of rlsk ln buslness 1hey are wldely used ln maLhemaLlcs for
example Lo evaluaLe mulLldlmenslonal deflnlLe lnLegrals wlLh compllcaLed boundary condlLlons
When MonLe Carlo slmulaLlons have been applled ln space exploraLlon and oll exploraLlon Lhelr
predlcLlons of fallures cosL overruns and schedule overruns are rouLlnely beLLer Lhan human
lnLulLlon or alLernaLlve sofL meLhods
2

1he MonLe Carlo meLhod was colned ln Lhe 1940s by !ohn von neumann SLanlslaw ulam and
nlcholas MeLropolls whlle Lhey were worklng on nuclear weapon pro[ecLs (ManhaLLan ro[ecL)
ln Lhe Los Alamos naLlonal LaboraLory lL was named ln homage Lo Lhe MonLe Carlo Caslno a
famous caslno where ulams uncle would ofLen gamble away hls money
3

MonLe Carlo meLhods vary buL Lend Lo follow a parLlcular paLLern
1 ueflne a domaln of posslble lnpuLs
2 CeneraLe lnpuLs randomly from a probablllLy dlsLrlbuLlon over Lhe domaln
3 erform a deLermlnlsLlc compuLaLlon on Lhe lnpuLs
4 AggregaLe Lhe resulLs
lor example conslder a clrcle lnscrlbed ln a unlL square Clven LhaL Lhe clrcle and Lhe square
have a raLlo of areas LhaL ls n/4 Lhe value of n can be approxlmaLed uslng a MonLe Carlo
meLhod
4

1 uraw a square on Lhe ground Lhen lnscrlbe a clrcle wlLhln lL
2 unlformly scaLLer some ob[ecLs of unlform slze (gralns of rlce or sand) over Lhe square
3 CounL Lhe number of ob[ecLs lnslde Lhe clrcle and Lhe LoLal number of ob[ecLs
4 1he raLlo of Lhe Lwo counLs ls an esLlmaLe of Lhe raLlo of Lhe Lwo areas whlch ls n/4
MulLlply Lhe resulL by 4 Lo esLlmaLe n
ln Lhls procedure Lhe domaln of lnpuLs ls Lhe square LhaL clrcumscrlbes our clrcle We generaLe
random lnpuLs by scaLLerlng gralns over Lhe square Lhen perform a compuLaLlon on each lnpuL
(LesL wheLher lL falls wlLhln Lhe clrcle) llnally we aggregaLe Lhe resulLs Lo obLaln our flnal
resulL Lhe approxlmaLlon of n
1o geL an accuraLe approxlmaLlon for n Lhls procedure should have Lwo oLher common
properLles of MonLe Carlo meLhods llrsL Lhe lnpuLs should Lruly be random lf gralns are
purposefully dropped lnLo only Lhe cenLer of Lhe clrcle Lhey wlll noL be unlformly dlsLrlbuLed
and so our approxlmaLlon wlll be poor Second Lhere should be a large number of lnpuLs 1he
approxlmaLlon wlll generally be poor lf only a few gralns are randomly dropped lnLo Lhe whole
square Cn average Lhe approxlmaLlon lmproves as more gralns are dropped
MonLe Carlo and random numbers
MonLe Carlo slmulaLlon meLhods do noL always requlre Lruly random numbers Lo be useful
whlle for some appllcaLlons such as prlmallLy LesLlng unpredlcLablllLy ls vlLal
10
Many of Lhe
mosL useful Lechnlques use deLermlnlsLlc pseudorandom sequences maklng lL easy Lo LesL and
rerun slmulaLlons 1he only quallLy usually necessary Lo make good slmulaLlons ls for Lhe
pseudorandom sequence Lo appear random enough ln a cerLaln sense
WhaL Lhls means depends on Lhe appllcaLlon buL Lyplcally Lhey should pass a serles of
sLaLlsLlcal LesLs 1esLlng LhaL Lhe numbers are unlformly dlsLrlbuLed or follow anoLher deslred
dlsLrlbuLlon when a large enough number of elemenLs of Lhe sequence are consldered ls one of
Lhe slmplesL and mosL common ones
Sawllowsky llsLs Lhe characLerlsLlcs of a hlgh quallLy MonLe Carlo slmulaLlon
9

O Lhe (pseudorandom) number generaLor has cerLaln characLerlsLlcs ( a long
perlod" before Lhe sequence repeaLs)
O Lhe (pseudorandom) number generaLor produces values LhaL pass LesLs for randomness
O Lhere are enough samples Lo ensure accuraLe resulLs
O Lhe proper sampllng Lechnlque ls used
O Lhe algorlLhm used ls valld for whaL ls belng modeled
O lL slmulaLes Lhe phenomenon ln quesLlon
seudorandom number sampllng algorlLhms are used Lo Lransform unlformly dlsLrlbuLed
pseudorandom numbers lnLo numbers LhaL are dlsLrlbuLed accordlng Lo a glven probablllLy
dlsLrlbuLlon
MonLe Carlo slmulaLlon versus whaL lf scenarlos
1here are ways of uslng probablllLles LhaL are deflnlLely noL MonLe Carlo slmulaLlonsfor
example deLermlnlsLlc modellng uslng slnglepolnL esLlmaLes Lach uncerLaln varlable wlLhln a
model ls asslgned a besL guess" esLlmaLe Scenarlos (such as besL worsL or mosL llkely case)
for each lnpuL varlable are chosen and Lhe resulLs recorded
11

8y conLrasL MonLe Carlo slmulaLlons sample probablllLy dlsLrlbuLlon for each varlable Lo
produce hundreds or Lhousands of posslble ouLcomes 1he resulLs are analyzed Lo geL
probablllLles of dlfferenL ouLcomes occurrlng
12
lor example a comparlson of a spreadsheeL
cosL consLrucLlon model run uslng LradlLlonal whaL lf" scenarlos and Lhen run agaln wlLh
MonLe Carlo slmulaLlon and 1rlangular probablllLy dlsLrlbuLlons shows LhaL Lhe MonLe Carlo
analysls has a narrower range Lhan Lhe whaL lf" analysls 1hls ls because Lhe whaL lf" analysls
glves equal welghL Lo all scenarlos (see quanLlfylng uncerLalnLy ln corporaLe flnance)
App||cat|ons
MonLe Carlo meLhods are especlally useful for slmulaLlng phenomena wlLh slgnlflcanL
uncerLalnLy ln lnpuLs and sysLems wlLh a large number of coupled degrees of freedom Areas of
appllcaLlon lnclude
hys|ca| sc|ences
See also MonLe Carlo meLhod ln sLaLlsLlcal physlcs
MonLe Carlo meLhods are very lmporLanL ln compuLaLlonal physlcs physlcal chemlsLry and
relaLed applled flelds and have dlverse appllcaLlons from compllcaLed quanLum
chromodynamlcs calculaLlons Lo deslgnlng heaL shlelds and aerodynamlc forms ln sLaLlsLlcal
physlcs MonLe Carlo molecular modellng ls an alLernaLlve Lo compuLaLlonal molecular
dynamlcs and MonLe Carlo meLhods are used Lo compuLe sLaLlsLlcal fleld Lheorles of slmple
parLlcle and polymer sysLems
13
CuanLum MonLe Carlo meLhods solve Lhe manybody problem
for quanLum sysLems ln experlmenLal parLlcle physlcs MonLe Carlo meLhods are used for
deslgnlng deLecLors undersLandlng Lhelr behavlor and comparlng experlmenLal daLa Lo Lheory
ln asLrophyslcs Lhey are used ln such dlverse manners as Lo model boLh Lhe evoluLlon of
galaxles
14
and Lhe Lransmlsslon of mlcrowave radlaLlon Lhrough a rough planeLary surface
13

MonLe Carlo meLhods are also used ln Lhe ensemble models LhaL form Lhe basls of modern
weaLher forecasLlng
Lng|neer|ng
MonLe Carlo meLhods are wldely used ln englneerlng for senslLlvlLy analysls and quanLlLaLlve
probablllsLlc analysls ln process deslgn 1he need arlses from Lhe lnLeracLlve collnear and non
llnear behavlor of Lyplcal process slmulaLlons lor example
O ln mlcroelecLronlcs englneerlng MonLe Carlo meLhods are applled Lo analyze correlaLed and
uncorrelaLed varlaLlons ln analog and dlglLal lnLegraLed clrculLs
O ln geosLaLlsLlcs and geomeLallurgy MonLe Carlo meLhods underpln Lhe deslgn of mlneral
processlng flowsheeLs and conLrlbuLe Lo quanLlLaLlve rlsk analysls
O lmpacLs of polluLlon are slmulaLed
16
and dlesel compared wlLh peLrol
17

O ln auLonomous roboLlcs MonLe Carlo locallzaLlon can be used Lo deLermlne Lhe poslLlon of a
roboL lL ls ofLen applled Lo sLochasLlc fllLers such as Lhe kalman fllLer or arLlcle fllLer whlch
form Lhe hearL of Lhe SLAM ( slmulLaneous LocallsaLlon and Mapplng ) algorlLhm
Computat|ona| b|o|ogy
MonLe Carlo meLhods are used ln compuLaLlonal blology such for as 8ayeslan lnference ln
phylogeny
8lologlcal sysLems such as proLelns
18
membranes
19
lmages of cancer
20
are belng sLudled by
means of compuLer slmulaLlons
1he sysLems can be sLudled ln Lhe coarsegralned or f frameworks dependlng on Lhe
deslred accuracy CompuLer slmulaLlons allow us Lo monlLor Lhe local envlronmenL of a
parLlcular molecule Lo see lf some chemlcal reacLlon ls happenlng for lnsLance We can also
conducL LhoughL experlmenLs when Lhe physlcal experlmenLs are noL feaslble for lnsLance
breaklng bonds lnLroduclng lmpurlLles aL speclflc slLes changlng Lhe local/global sLrucLure or
lnLroduclng exLernal flelds
App||ed stat|st|cs
ln applled sLaLlsLlcs MonLe Carlo meLhods are generally used for Lwo purposes
1 1o compare compeLlng sLaLlsLlcs for small samples under reallsLlc daLa condlLlons AlLhough
1ype l error and power properLles of sLaLlsLlcs can be calculaLed for daLa drawn from classlcal
LheoreLlcal dlsLrlbuLlons ( normal curve Cauchy dlsLrlbuLlon) for asympLoLlc condlLlons (
lnflnlLe sample slze and lnflnlLeslmally small LreaLmenL effecL) real daLa ofLen do noL have such
dlsLrlbuLlons
21

2 1o provlde lmplemenLaLlons of hypoLhesls LesLs LhaL are more efflclenL Lhan exacL LesLs such as
permuLaLlon LesLs (whlch are ofLen lmposslble Lo compuLe) whlle belng more accuraLe Lhan
crlLlcal values for asympLoLlc dlsLrlbuLlons
MonLe Carlo meLhods are also a compromlse beLween approxlmaLe randomlzaLlon and
permuLaLlon LesLs An approxlmaLe randomlzaLlon LesL ls based on a speclfled subseL of all
permuLaLlons (whlch enLalls poLenLlally enormous housekeeplng of whlch permuLaLlons have
been consldered) 1he MonLe Carlo approach ls based on a speclfled number of randomly
drawn permuLaLlons (exchanglng a mlnor loss ln preclslon lf a permuLaLlon ls drawn Lwlce or
more frequenLly for Lhe efflclency of noL havlng Lo Lrack whlch permuLaLlons have already
been selecLed)
Des|gn and v|sua|s
MonLe Carlo meLhods have also proven efflclenL ln solvlng coupled lnLegral dlfferenLlal
equaLlons of radlaLlon flelds and energy LransporL and Lhus Lhese meLhods have been used ln
global lllumlnaLlon compuLaLlons whlch produce phoLoreallsLlc lmages of vlrLual 3u models
wlLh appllcaLlons ln vldeo games archlLecLure deslgn compuLer generaLed fllms and
clnemaLlc speclal effecLs
23

I|nance and bus|ness
MonLe Carlo meLhods ln flnance are ofLen used Lo calculaLe Lhe value of companles Lo evaluaLe
lnvesLmenLs ln pro[ecLs aL a buslness unlL or corporaLe level or Lo evaluaLe flnanclal derlvaLlves
1hey can be used Lo model pro[ecL schedules where slmulaLlons aggregaLe esLlmaLes for worsL
case besLcase and mosL llkely duraLlons for each Lask Lo deLermlne ouLcomes for Lhe overall
pro[ecL
1e|ecommun|cat|ons
When plannlng a wlreless neLwork deslgn musL be proved Lo work for a wlde varleLy of
scenarlos LhaL depend malnly on Lhe number of users Lhelr locaLlons and Lhe servlces Lhey
wanL Lo use MonLe Carlo meLhods are Lyplcally used Lo generaLe Lhese users and Lhelr sLaLes
1he neLwork performance ls Lhen evaluaLed and lf resulLs are noL saLlsfacLory Lhe neLwork
deslgn goes Lhrough an opLlmlzaLlon process