Bulacan State University

City of Malolos

QUANTITATIVE BUSINESS ANALYSIS

SIMULATION MODELING

System Simulation is the mimicking of the operation of a real system, such as the
day-to-day operation of a bank, the value of a stock portfolio over a time period,
the running of an assembly line, of the staff assignment of a hospital in a
computer. Instead of building extensive mathematical models by experts, the
readily available simulation software has made it possible to model and analyze
the operation of a real system by non-experts, who are managers but not
programmers.

Simulation modeling is imitating a real-life situation with a probabilistic approach

where the organization wants to minimize labor cost and waiting time of
customers.

Monte Carlo Simulation

Monte Carlo Simulation uses random numbers over a probability

distribution to simulate what could actually happening in real situation.

Example:

Dylan is the Call Center Supervisor of Cebu Pacific and he wants to

improve the efficiency of his lone staff while reducing the average waiting time of
the clients who book by phone. He is able to determine the probabilities of client
call interval as well as the service rate of the staff and wants to use random
numbers from Appendix D in his analysis of the first 20 clients. The figures are
summarized in the table below.

Time between Client Calls Service Time of Staff

Time Probability Cumulative Random Time Probability Cumulative Random
(min) Probability Number (min) Probability Number
(limit) Interval* Interval**
0 0.05 0.05 0 to 0.05 0 0.00 0 0
1 0.15 0.20 0.06 to 1 0.30 0.30 0.01 to
0.20 0.30
2 0.25 0.45 0.21 to 2 0.35 0.65 0.31 to
0.45 0.65
3 0.35 0.80 0.46 to 3 0.20 0.85 0.66 to
0.80 0.85
4 0.15 0.95 0.80 to 4 0.15 1.00 0.85 to
0.95 1.0
5 0.05 1.00 0.96 to 5 0.00 1.00
1.0
*Appendix D Column 1 ** Appendix D Column 2

Questions:
1. What is the average interval of Client Calls? 2.30 min
2. What is the average service time per client? 2.10 min
3. What is the average waiting time of clients? 2.20 min
4. What is the average idle time of the staff? 0.4 min or 24 sec

Solution:

1
Set-up the simulation table

A B C D E F G H I J
Client Rando Arrival (min), Ai Arriv Random Servic Servi Servi Wait Idle
Numb m al Number e ce ce Time, Time=
er numbe Time ** - (min) Start, End, Wt = Ss – Se
r* - , At based , St Ss = Se = Ss – of
based on the max Ss + At (G- previou
on the table of (Se St D) s client
table random of (G-H
of number prev) Se = previou
Rando s or At G+F s) or
m Column if Ss of
Numbe 2 none no
rs Ss = client
column max
1 (Col
H /
D) or
Col D
if
none

1 0.10 1 1 0.65 2 1 1+2 1- 1

=3 1=0
2 0.27 2 3 0.13 1 3/3 = 4 0 3 -3=0
3
3 0.99 5 8 0.60 2 4/8 = 10 0 8-4=4
8
4 0.66 3 11 0.69 3 11 14 0 11-
10=1
5 0.53 3 14 0.99 4 14 18 0 14-14
=0
6 0.91 4 18 0.24 1 18 19 0 0
7 0.02 0 18 0.48 2 19 21 1 0
8 0.18 1 19 0.59 2 21 23 2 0
9 0.98 5 24 0.32 2 24 26 0 0
10 0.64 3 27 0.71 3 27 30 1 1
11 0.05 0 27 0.59 2 30 32 4 0
12 0.20 1 28 0.64 2 32 34 5 1
13 0.51 3 31 0.54 2 34 36 4 0
14 0.01 0 31 0.01 1 36 37 6 0
15 0.56 3 34 0.84 3 37 40 4 0
16 0.84 4 38 0.25 1 40 41 3 0
17 0.29 2 40 0.46 3 41 44 2 0
18 0.05 0 40 0.76 3 44 47 4 0
19 0.44 2 42 0.63 2 47 49 5 0
20 0.85 4 46 0.36 2 49 51 3 0
Total 46 Total 42 Total 44 8
Average Q1.46/20= Average Q2. Average Q3. Q4.
2.30 42/20 44/20 8/20=
= = 0.40
2.10 2.20
* Appendix D Column 1 ** Appendix D Column 2

1. For Column B (Random Number) and Column C (Arrival):

From the Appendix D, column 1, we can determine the time interval of the
arriving call (Ai) in minutes:

Client Number Random Number Interval Ai

2
 1 0.10 0.06 to 0.20 1
2 0.27 0.21 to 0.45 2
3 0.99 0.96 to 1.00 5
4 0.66 0.46 to 0.80 3
5 0.53 0.46 to 0.80 3
6 0.91 0.81 to 0.95 4
7 0.02 0.00 to 0.05 0
8 0.18 0.06 to 0.20 1
9 0.98 0.96 to 1.00 5
10 0.64 0.46 to 0.80 3
11 0.05 0.00 to 0.05 0
12 0.20 0.06 to 0.20 1
13 0.51 0.46 to 0.80 3
14 0.01 0.00 to 0.05 0
Client Number Random Number Interval Ai
15 0.56 0.46 to 0.80 3
16 0.84 0.81 to 0.95 4
17 0.29 0.21 to 0.45 2
18 0.05 0.00 to 0.05 0
19 0.44 0.21 to 0.45 2
20 0.85 0.81 to 0.95 4

Total Ai = 46
Average = Ai / n = 46/20 = 2.30

The average interval of phone calls is 2 minutes and 18 seconds

2. For column E (random number), F (Service), and G (Service Start)

Client Number Random Number Interval St

(Column 2, App
D)
1 0.65 0.31 to 0.65 2
2 0.13 0.00 to 0.30 1
3 0.60 0.31 to 0.65 2
4 0.69 0.66 to 0.85 3
5 0.99 0.86 to 1.00 4
6 0.24 0.00 to 0.30 1
7 0.48 0.31 to 0.65 2
8 0.59 0.31 to 0.65 2
9 0.32 0.31 to 0.65 2
10 0.71 0.66 to 0.85 3
11 0.59 0.31 to 0.65 2
12 0.64 0.31 to 0.65 2
13 0.54 0.31 to 0.65 2
14 0.01 0.00 to 0.30 1
15 0.84 0.66 to 0.85 3
16 0.25 0.00 to 0.30 1
17 0.46 0.66 to 0.85 3
18 0.76 0.66 to 0.85 3
19 0.63 0.31 to 0.65 2
20 0.36 0.31 to 0.65 2

Total St = 42

3
Average = 2.10

The average time a client is served on the phone is 2 minutes and 6 seconds.

3. Compute the time the service starts (Ss) and when the Service Ends (Se) in
minutes

Ss = maximum (Se of previous client, At) or At if no previous client

Se = Ss + St

Client Ss (Maximum) Se
Number
1 1 1 1+2=3 3
2 (3,3) 3 3+1=4 4
3 (8,4) 8 8+2= 10
10
4 (10,11) 11 11 + 3 = 14
14
5 (14,14) 14 14 + 4 = 18
18
6 (18,18) 18 18 + 1 = 19
19
7 (18, 19) 19 19 + 2 = 21
21
8 (21, 19) 21 21 + 2= 23
23
9 (23,24) 24 24 + 2 = 26
26
10 (26, 27) 27 27 + 3 = 30
30
11 (27,30) 30 30 + 2 = 32
32
12 (28, 32) 32 32 + 2 = 34
34
13 (31, 34) 34 34 + 2 = 36
36
14 (31, 36) 36 36 + 1 = 37
37
15 (34, 37) 37 37 + 3 = 40
40
16 (38, 40) 40 40 + 1 = 41
41
17 (40, 41) 41 41 + 3 = 44
44
18 (40, 44) 44 44 + 3 = 47
47
19 (42, 47) 47 47 + 2 = 49
49
20 (46, 49) 49 49 + 2 = 51
51

4
5. Compute the Waiting Time (Wt) in minutes

Wt = Ss – At

Client Wt = Ss – At
1 1-1 0
2 3-3 0
3 8-8 0
4 11-11 0
5 14-14 0
6 18-18 0
7 19-18 1
8 21-19 2
9 24-24 0
10 28-27 1
11 31-27 4
12 33-28 5
13 35-31 4
14 37-31 6
15 38-34 4
16 41-38 3
17 42-40 2
18 44-40 4
19 47-42 5
20 49-46 3

Total is 44 minutes, with an average of 2.20. Thus, the average time a

client waits to be served is 2 minutes 12 seconds.

6. Compute the Idle Time (It)

It = Ss – Se of previous client or Ss if no client

Client It = Ss – Se
1 1 1
2 3-3 0
3 8-4 4
4 11-10 1
5 14-14 0
6 18-18 0
7 19-19 0
8 21-21 0
9 23-23 0
10 28-27 1
11 31-31 0
12 33-32 1
13 35-35 0
14 37-37 0
15 38-38 0
16 41-41 0
17 42-42 0
18 44-44 0
19 47-47 0
20 49-49 0

5
 Total It = 8 minutes, with an average of 0.40 seconds. Thus, The average
time the staff is idle between clients is 24 seconds.