1. 1 Decision Making ADMI 6510 Simulation Key Sources: Data Analysis and Decision Making (Albrigth, Winston and Zappe) An Introduction to Management Science: Quantitative Approaches to Decision Making (Anderson, Sweeny, Williams, and Martin), Essentials of MIS (Laudon and Laudon), www.wikipedia.com, www.dilbert.com

2. Outline Simulation and its purposes. Simulation and decision making. “By hand” simulation. Overview of a simulation study. 2

3. Simulation and its Purposes What is Simulation Modeling? – The science/art of developing computer based models that mimic the behavior of an existing/ proposed system. Well known example: flight simulator (mimics the behavior of an airplane). – Simulations are based on the definition of the process/ logic of the system and the environment. 3

4. Simulation and its Purposes Highly useful in the analysis/ design of systems where there is significant variability and complexity and the system changes with time (dynamic). – Variability in the arrival pattern of orders. – Variability in process times, setup times. – Options in the number of available resources (for example technicians, mixers,….) – Complexity in schedules, environmental variables, …. 4

5. Simulation and its Purposes Assumes the computer model behaves like the real (or proposed) system, thus a change in the model will produce an output similar to the real (or proposed) system. 5 = We can then make changes in the model before implementation. - Schedules, Resources, Location, …. Easier, less expensive, non-disruptive way to evaluate alternatives.

6. Simulation and its Purposes Why a better tool for analysis and planning? – Simulation outperforms traditional analysis planning tools in the ability to predict process throughput, because it accounts for variability and complex process interdependencies. Requires process understanding. Identifies bottlenecks. Accounts for variability (not based on averages). Better characterization of output. 6

7. Simulation and Decision Making Key decisions – Number of resources/ capacity planning. – System configuration – Scheduling and Planning: rules to use to allocate resources to tasks. – Facility design 7

8. Simulation and Decision Making Areas of application – Manufacturing – Retail – Professional services – Healthcare – Logistics and transportation 8

9. Simulation Process The process of simulation starts by defining the system. – Process – Entities – Resources – Measures of performance – Time units Key Strategic Step – Size and complexity affect time to develop and ability to validate. 9

10. Simulation Process System Definition – People need help. – There is 1 resource that handles requests. – Entities: Customers need help. – Process. Customers arrive, wait for worker, help provided, customer leaves the system. 10 help Customer arrives Wait in line Customers leave

11. Simulation Process Measures of performance – Helper resource utilization. – Time waiting for the customers (maximum and average). – No. Customers in the waiting area (maximum and average). Process characteristics – Time unit: minutes – Time between customer arrivals – Time to help a customer 11

12. Overview of a Simulation Study System analysis and description Software implementation Verify the computer model and conceptual model match (model = planned model) Validation (model = real system) Experiment Analyze the results and get insights 12