Simulation

Simulation

Simulation is used to model efficiently a wide variety of systems that are important to managers. A simulation is basically an imitation, a model that imitates a real-world process or system. In business and management, decision makers are often concerned with the operating characteristics of a system. One way to measure or assess the operating characteristics of a system is to observe that system in actual operation. However, in many types of situations the cost of direct observation can be very high. Furthermore, changing some of the relationships or parameters within a system on an experimental basis may mean waiting a considerable amount of time to collect results on all the combinations that are of concern to the decision maker.

In business and management, a simulation is a mathematical imitation of a real-world system. The use of computers to conduct simulations is not essential from a theoretical standpoint. However, most simulations are sufficiently complex from a practical standpoint to require the use of computers in runningthem. A simulation can also be considered to be an experimental process. In a set of experimental runs, the decision maker actively varies some of the parameters or relationships in the system. If the mathematical model behind the simulation is valid, the results of the simulation runs will imitate the results of the real system if it were to operate over some period of time.

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