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Book Contents

Ch. 9
Building Model-Driven Decision Support Systems

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Simulation Models

Often companies are faced with planning the production of a new product or building a new factory. Although these may seem like straightforward analyses, managers need to make many interrelated decisions. For example, production of a new product involves decisions regarding equipment, scheduling and control and manufacturing philosophy. Many factors influence these decisions, including the need to meet production volume goals and costs associated with achieving these goals. Discrete event simulations and costing models can help evaluate complex, interrelated decision issues.

Simulation has many meanings, depending on the professional discipline where the term is being used. To simulate, according to many dictionaries, means to assume the appearance or characteristics of reality. It also means a model that generates test conditions approximating actual or operational conditions. In a DSS context, simulation generally refers to a technique for conducting experiments with a computer-based model. One method of simulating a system involves identifying the various states of a system and then modifying those states by executing specific events. A wide variety of problems can be evaluated using simulation including inventory control and stock-out, manpower planning and assignment, queuing and congestion, reliability and replacement policy and sequencing and scheduling.

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