Discrete-Event Simulation and System Dynamics for Management Decision Making

2Discrete-Event Simulation: A Primer

Stewart Robinson

School of Business and Economics, Loughborough University, UK

2.1 Introduction

Discrete-event simulation (DES) grew largely out of a desire to model manufacturing systems. Based upon the foundation of Monte Carlo methods, DES models were developed to improve the design and operation of manufacturing plants. Among the earliest examples is the work of K.D. Tocher who developed the General Simulation Program in the late 1950s at the United Steels Companies in the United Kingdom; see Hollocks (2008) for an excellent summary of these early developments.

Over the years DES has been applied to a much broader set of applications including health, service industries, transportation, warehousing, supply chains, defence, computer systems and business process management. Much of this work has focused on improving the design and operation of the systems under investigation, but there have also been examples of DES for aiding strategic decision making.

DES is seen as a, if not the, mainstream simulation approach in the field of operational research (OR). Indeed, many OR specialists simply refer to it as ‘simulation’, seemingly ignoring the potential to simulate using other approaches, including system dynamics. DES does imply a very specific approach to simulation from both a technical and a philosophical perspective. In this chapter we will explore both of these perspectives. To set a context, we first present an example of a DES model. ...