Final Simulation
Final Simulation
Final Simulation
GROUP NO-6
ASHISH KAPOOR-9
AVINASH KAUR-10
PRIYANKA BHARDWAJ- 30
SHREYASH YADAV-38
RAJEEV VASUDEVAN- 51
ALISHA SHARMA- 123
CONTENTS
• DEFINITION
• USES
• MONTE CARLO SIMULATION
• STEPS
• APPLICATION
Simulation
• Definition
• Simulation is a process of designing a model of a real
system and conducting experiments with model for the
purpose of understanding the behavior of operation of
system.
It means deriving measures of performance about a
complex system by conducting sampling experiments on
a mathematical model of a system over a period of time.
Contd…..
• It is helpful in the systems which involve uncertainty.
• Simulation is useful in solving problems where all
values of the variables are either not known or
partially known.
• In situations where it is difficult to predict or
identify bottlenecks, Simulation is used to foresee
these unknown difficulties.
• The simulation approach is useful to study a
problem that involves uncertainty
Contd…
• Estimates the performance of existing system
existing system
• Maintain much better control
• Allows to study a system with long
time frame
• Useful for sensitivity analyses
• Used as pre-test to try new policies
and decision rule
Advantages of Simulation
• To solve cumbersome problems
• Experiment
• Study the long term effect
• To test proposed analytical solutions
• Stability
• Generation of data
• Modification
• Bifurcation system
• No interference
• Time saving
• Last resort
Disadvantages
• Not precise
• Expensive
• No optimal solution
• Non transferable
• Inefficient
• Adhoc
Applications of simulation
• Location of emergency vehicles
• Inventory policy decisions
• Financial planning (portfolio selection, capital
budgeting decisions)
• Scheduling production processes
• Design of sophisticated products such as reactors,
military equipments, planes, ships etc.
• Deciding the crew size for breakdowns/queing systems
• Weather forecast
• Forecasting demand, sales, costs, profits etc.
Steps involved in Simulation
this simulation.
Steps involved in Monte Carlo
• Find the cumulative Probability
• Dices
• Computer generated
• By coin
Random Numbers
To start with…….
• Question- A bakery keeps stock of popular cake.
Previous experience indicates the demand
given below.
Daily 0 10 20 30 40 50
Demand
Probability .01 .20 .15 .50 .12 .02
0
No.
00
Determination of
10
20
1- 20
21- 35
demand
30 36- 85
40 86- 97 Days Random no. Demand
50 98- 99 1 48 30
2 78 30
3 19 10
4 51 30
5 56 30
6 77 30
7 15 10
8 14 10
9 68 30
10 9 10
ANSWER
• DAILY AVERAGE DEMAND= 220/ 10
= 22
USE OF SIMULATION IN
WEATHER FORECAST
• Question- the occurrence of rain in a city is
dependent on whether or not it rained on
previous day, if it did, the distribution is given
by- Event ( rain in Probability Event ( rain in Probability
cm.) cm.)
0 0.75 0 0.50
1 0.15 1 0.25
2 0.06 2 0.15
3 0. 04 3 0.05
4 0.03
5 0.02
• Simulate weather
forecast for ten days.
Allocation of random number( rain
on previous day)
1 80 153 150 3 0
2 81 153 150 6 0
3 76 152 150 8 0
4 75 152 150 10 0
5 64 152 150
6 43 150 150
7 18 148 150
8 26 149 150
9 10 147 150
10 12 147 150
11 65 152 150
12 68 152 150
13 69 152 150
Based on the 15 random numbers given, we simulate production
per day in the table below
S.NUM RANDOM NO. PRODUCTION CAPACITY LORRY NO. OF NO. OF EMPTY
PER DAY SCOOTER(WAITI SPACES IN THE
NG) LORRY
1 80 153 150 3 0
2 81 153 150 6 0
3 76 152 150 8 0
4 75 152 150 10 0
5 64 152 150 12 0
6 43 150 150 12 0
7 18 148 150 10 2
8 26 149 150 9 1
9 10 147 150 6 3
10 12 147 150 3 3
11 65 152 150
12 68 152 150
13 69 152 150
Based on the 15 random numbers given, we simulate production
per day in the table below
S.NUM RANDOM NO. PRODUCTION CAPACITY LORRY NO. OF NO. OF EMPTY
PER DAY SCOOTER(WAITI SPACES IN THE
NG) LORRY
1 80 153 150 3 0
2 81 153 150 6 0
3 76 152 150 8 0
4 75 152 150 10 0
5 64 152 150 12 0
6 43 150 150 12 0
7 18 148 150 10 0
8 26 149 150 9 0
9 10 147 150 6 0
10 12 147 150 3 0
11 65 152 150 5 0
12 68 152 150 7 0
13 69 152 150 9 0
CONTINUE…
…….
14 61 152 150 11 0
15 57 151 150 12 0
TOTAL 123 00
45,000 0.10
50,000 0.05
CONTD…..
Solution:
Now the simulation worksheet is prepared for 10 trials. The simulated return(R) is also
calculated
by using the formula for R.
Trials Random number Simulated Random Simulated Random Simulated Simulated
for demand Demand Number for profit number Investment return(%)
(‘000) profit per unit for invest. (‘000)
1. 28 30 19
2. 57 35 07
3. 60 35 90
4. 17 30 02
5. 64 35 57
6. 20 30 28
7. 27 30 29
8. 58 35 83
9. 61 35 58
10. 30 30 41
The highest likely return is 20% which corresponds to annual demand of 35,000 units yielding a
profit of
Rs.10 per unit and investment required is Rs. 17,50,000.
Trials Random number Simulated Random Simulated Random Simulated Simulated
for demand Demand Number for profit number Investment return(%)
(‘000) profit per unit for invest. (‘000)
1. 28 30 19 5.00
2. 57 35 07 3.00
3. 60 35 90 10.00
4. 17 30 02 3.00
5. 64 35 57 7.00
6. 20 30 28 5.00
7. 27 30 29 5.00
8. 58 35 83 9.00
9. 61 35 58 7.00
10. 30 30 41 7.00
The highest likely return is 20% which corresponds to annual demand of 35,000 units yielding a
profit of
Rs.10 per unit and investment required is Rs. 17,50,000.
Trials Random number Simulated Random Simulated Random Simulated Simulated
for demand Demand Number for profit number Investment return(%)
(‘000) profit per unit for invest. (‘000)
1. 28 30 19 5.00 18
2. 57 35 07 3.00 61
3. 60 35 90 10.00 16
4. 17 30 02 3.00 71
5. 64 35 57 7.00 43
6. 20 30 28 5.00 68
7. 27 30 29 5.00 47
8. 58 35 83 9.00 24
9. 61 35 58 7.00 19
10. 30 30 41 7.00 97
The highest likely return is 20% which corresponds to annual demand of 35,000 units yielding a
profit of
Rs.10 per unit and investment required is Rs. 17,50,000.
Trials Random number Simulated Random Simulated Random Simulated Simulated
for demand Demand Number for profit number Investment return(%)
(‘000) profit per unit for invest. (‘000)
1. 28 30 19 5.00 18 1750
2. 57 35 07 3.00 61 2000
3. 60 35 90 10.00 16 1750
4. 17 30 02 3.00 71 2000
5. 64 35 57 7.00 43 2000
6. 20 30 28 5.00 68 2000
7. 27 30 29 5.00 47 2000
8. 58 35 83 9.00 24 1750
9. 61 35 58 7.00 19 1750
10. 30 30 41 7.00 97 2500
The highest likely return is 20% which corresponds to annual demand of 35,000 units yielding a
profit of
Rs.10 per unit and investment required is Rs. 17,50,000.
Trials Random number Simulated Random Simulated Random Simulated Simulated
for demand Demand Number for profit number Investment return(%)
(‘000) profit per unit for invest. (‘000)
The highest likely return is 20% which corresponds to annual demand of 35,000 units yielding a
profit of
Rs.10 per unit and investment required is Rs. 17,50,000.
Simulation and Inventory Control System
Table 2.
Lead time Cumulative probability Random nos.assigned
2 0.20 00 to 19
3 0.85 20 to 84
4 1.00 85 to 99
weeks Stock Rando Quantit Quantit Stock Inven- quantit costs Ran- lead time
on hand m no. y y on hand tory y dom period
begin- demand receive end of carry- no.
ning of ed d the ing cost
the week
weeks
1 10 49 1 - 9 45
2 9 67 2 - 7 35
3 7 06 0 - 7 35
4 7 30 1 - 6 30
5 6 95 3 - 3 15 84 3
6 3 01 0 - 3 15
7 3 10 1 - 2 10
8 2 70 2 12 12 60
week Stock Rand Quan Quan Stock Inven quan costs Ran- lead
s on om tity tity on -tory tity dom time
hand no. dema receiv hand carry- no. perio
begin nded ed end ing d
-ning of the cost
of the week
week
s
9 12 80 2 - 10 50
10 10 66 2 - 8 40
11 8 69 2 - 6 30
12 6 76 2 - 4 20
13 4 86 3 - 1 5 79 3
14 1 56 2 - - - 1 75
15 - 84 2 12 10 50
Answer-
• inventory carrying cost=440
• ordering cost=240
• Stock out cost=75
• Total cost=735
Use of simulation in calculation
of profit and loss
QUES.
A company manufactures 30 units per day.The sale of these items
depends upon demand which has the following distribution.
Sales(Units) Probability
27 0.10
28 0.15
29 0.20
30 0.35
31 0.15
32 0.05
The production cost and sale price of each unit are Rs40 and Rs50,respectively.Any
unsold product is to be disposed of at a loss of Rs 15 per unit . There is a penalty of
Rs5 if the demand is not met . Using the following random numbers , estimate the
total profit /loss for the company for the next ten days.
10, 99, 65, 99, 95, 01, 79, 11, 16, 20
If the company decides to produce 29 units per day, what is the advantage or
disadvantage of the company?
SOL.
As a first step, random numbers 00-09 are allocated to various possible
sale values in proportion to the probabilities associated with them.
SALE(UNIT) PROBABILITY CUMULATIVE RANDOM
PROBABILTY NUMBER
INTERVAL
27 0.10 0.10 00-09
28 0.25 0.25 10-24
29 0.45 0.45 25-44
30 0.80 0.80 45-79
31 0.95 0.95 80-94
32 1.00 1.00 95-99
Now , we stimulate the demand for the next ten days using the given random numbers.
From the given information we have..
Profit per unit sold=Rs50-Rs40=Rs10
Loss per unit sold=Rs15
Penalty for refusing demand=Rs 5 per unit
Using these inputs,the profit /loss for the ten days is
calculated as given below,first when production is 30
units per day and ten when it is 29 units.
It is evident that the total profit for ten days is Rs 2695 when 30units are
produced . Also,if the company decides to produce 29units per day , the total
profit works to be the same, as shown calculated in the last column of the
table.
Day Random Estimated Profit/loss per day with production
number sales(units) 30 units 29 units
1 10 28 28*10-2*15=250
2 99 32 30*10-2*5=290
3 65 30 30*10 =300
4 99 32 30*10-2*5=290
5 95 32 30*10-2*5=290
6 01 27 27*10-3*15=225
7 79 30 30*10 = 300
8 11 28 28*10-2*15=250
9 16 28 28*10-2*15=250
10 20 28 28*10-2*15=250
Total profit=2695
Using these inputs,the profit /loss for the ten days is calculated as
given below,first when production is 30 units per day and ten when it is
29 units.
It is evident that the total profit for ten days is Rs 2695 when 30units are
produced . Also,if the company decides to produce 29units per day , the total
profit works to be the same, as shown calculated in the last column of the
table.
Day Random Estimated Profit/loss per day with production
number sales(units) 30 units 29 units
1 10 28 28*10-2*15=250 28*10-1*15=265
2 99 32 30*10-2*5=290 29*10-3*5=275
3 65 30 30*10 =300 29*10-1*5=285
4 99 32 30*10-2*5=290 29*10-3*5=275
5 95 32 30*10-2*5=290 29*10-3*5=275
6 01 27 27*10-3*15=225 27*10-2*15=240
7 79 30 30*10 = 300 29*10-1*15=285
8 11 28 28*10-2*15=250 28*10-1*15=265
9 16 28 28*10-2*15=250 28*10-1*15=265
10 20 28 28*10-2*15=250 28*10-1*15=265
Total profit=2695 2695
SIMULATION IN QUEING
SYSTEM
Question
• Dr. Strong is a dentist who scheduled all her
patients for 30- minutes appointments. Some
of the patients take more or less than 30 mims
depending on all type of dental work to be
done. The following summary shows the
various categories of work, their probabilities
and the time actually needed to complete the
work
category Time required Probability of category
1 8.00 am 40
2 8.30 am 82
3 9.00 am 11
4 9.30 am 34
5 10 am 25
6 10.30 am 66
7 11.00 am 17
8 11.30 am 79
Simulation worksheet: dentist’s
clinic
Patien Arrival Random Service Service Waiting Idle time
t time numbers time --------------------------- time
needed Begins ends
1 8.00 am 40 60
2 8.30 am 82 15
3 9.00 am 11
4 9.30 am 34
5 10 am 25
6 10.30 am 66
7 11.00 am 17
8 11.30 am 79
Simulation worksheet: dentist’s
clinic
Patien Arrival Random Service Service Waiting Idle time
t time numbers time --------------------------- time
needed Begins ends
1 8.00 am 40 60
2 8.30 am 82 15
3 9.00 am 11 45
4 9.30 am 34 45
5 10 am 25 45
6 10.30 am 66 15
7 11.00 am 17 45
8 11.30 am 79 45
Simulation worksheet: dentist’s
clinic
Patien Arrival Random Service Service Waiting Idle time
t time numbers time --------------------------- time
needed Begins ends