QUANTITATIVE METHODS

LESSON 1: SIMULATION

- Simulation in general is to pretend that one deals with a real thing while really
working with an imitation.
- In operations research, the imitation is a computer model of a simulated reality.
For example, if flight simulator on a pc is also a computer model of some aspects
of the flight. It shows on the screen the controls and what the pilot supposed to
see from the cockpit. Now based on this example, we can say that simulation is
used before an existing system is altered or a new system is built to reduce the
chances of failure to meet specification to imitate unforeseen bottleneck to
prevent under or over utilization of resources and to optimize system
performance.
- Simulation can be used to answer questions like what is the best design for a
new telecommunication network, what are the associate resources requirements,
how will a telecommunication networks perform when a traffic load increases by
50%, how will a new routing algorithm effects its performance, which network
protocol optimizes network performance and what will be the impact of a link
failure.
- Simulation is used before an existing system is altered or new system built, to
reduce the chances of failure to meet specifications, to eliminate unforeseen
bottlenecks, to prevent under or over-utilization of resources, and to optimize
system performance.

MODELLING

- Modelling is the process of producing a model.

- A model is a representation of the construction and working of some system of
interest.
- A model is a description of some system intended to predict what happens if a
certain action is taken.
- A model is similar to but simpler than the system it represents.
 - One purpose of a model is to enable the analyst to predict the effect of changes
to the system.

WHY USE MODELS?

Let us take again the flight simulator on the pc as an example. Flying in a simulator
is safer and cheaper than the real airplane. For precisely reason, models are used. It is
very costly, dangerous and often impossible to make experiments with real system.

- Models are used in different industries because using a real system could be
very costly, expensive and sometimes dangerous and often impossible to make
experiments with real systems.
- Provided that models are adequate descriptions of reality (they are valid),
experimenting with them can save money, time and effort.

WHEN TO USE SIMULATIONS?

- The use of simulation becomes apparent as soon as a number of factors are

considered to influence the behavior of a system.
- Many approaches, especially statistical ones, are available to analyze
interactions in systems.
- Simulation modeling constitutes a unique approach that it enables the
simultaneous handling a range of such factors and ‘see’ their influence on the
behavior of a system.

HOW IS SIMULATION PERFORMED?

- Simulations may be performed manually. Most often, however, the system model
is written either as a computer program or as some kind of input into simulator
software.

TYPES OF SIMULATORS

A simulator is a device, computer program, or system that performs simulation. A

simulation is a method for implementing a model (see model types) over time. There are
three (3) types of commonly uses simulations.
 1. LIVE: Simulation involving real people operating real systems.
 Involved individuals or groups
 May use actual equipment
 Should provide a similar area of operations
 Should be close to replicating the actual activity
2. VIRTUAL: Simulation involving real people operating simulated systems. Virtual
simulations inject. Human-In-The-Loop in a central role by exercising:
 Motor control skills
 Decision skills
 Communication skills
3. CONSTRUCTIVE: Simulation involving simulated people operating simulated
systems. Real people can stimulate (make inputs) but are not involved in
determining outcomes. Constructive simulations offer the ability to:
 Analyze concepts
 Predict possible outcomes
 Stress large organizations
 Make measurements
 Generate statistics
 Perform analysis

HOW TO DEVELOP A SIMULATION MODEL?

Simulation models consist of the following components: system entities, input

variables, performance measures, and functional relationships.

STEP 1: IDENTIFY THE PROBLEM

- Enumerate problems with an existing system produce requirements for a

proposed system.

STEP 2: FORMULATE THE PROBLEM

- Select the bounds of the system. The problem or a partner of to be study. Define
overall objective of study in a fused specific issue to be addressed. We also need
to define performance measures, quantitative criteria on the bases of which
 different system configuration to be compared and rank. We have to identify also
briefly this stage the configurations of interest and formulate hypotheses about
system performance. We also need to decide the timeframe of the study.
Example will be used for one time decision or over a period of time on a regular
basis and lastly, identify the end user of the simulation model.

STEP 3: COLLECT AND PROCESS REAL SYSTEM DATA

- Collect data of system specifications, input variable as well as performance of the

existing system.

STEP 4: FORMULATE AND DEVELOP A MODEL

- Developing semantic network diagram of a system, translate this conception

model to simulation software acceptable form, verify simulation model executes
as intended.

STEP 5: VALIDATE THE MODEL

- We need to compare the model’s performance under known conditions with the
performance of the real system. Perform statistical interference test and get the
model examine by system expert. Assess the confidence that the end user
places on the model and address problem if there are any.

STEP 6: DOCUMENT MODEL FOR FUTURE USE

- Document objectives, assumptions and input variables in detail.

BENEFITS OF SIMULATION MODELING AND ANALYSIS

According to practitioners, simulation modeling and analysis is one of the most

frequently used operations research techniques. When used judiciously, simulation
modeling and analysis makes it possible to:

- Obtain a better understanding of the system by developing a mathematical model

of a system of interest, and observing the system’s operation in detail over long
periods of time.
- Test hypotheses about the system for feasibility.
 - Compress time to observe certain phenomena over long periods or expand time
to observe a complex phenomenon in detail.
- Study the effects of certain informational, organizational, environmental and
policy changes on the operation of a system by altering the system’s model. This
can be done without disrupting the real system and significantly reduces the risk
of experimenting with the real system.
- Experiment with new or unknown situations about which only weak information is
available.
- Identify the “driving” variables - ones that performance measures are most
sensitive to - and the inter- relationships among them.
- Identify bottlenecks in the flow entities (material, people, etc.) or information.
- Use multiple performance metrics for analyzing system configurations.
- Employ a systems approach to problem solving.
- Develop well designed and robust systems and reduce system development
time.

WHAT ARE SOME PITFALLS TO GUARD AGAINST IN SIMULATION?

Simulation can be a time consuming and complex exercise, from modeling

through output analysis, that necessitates the involvement of resident experts and
decision makers in the entire process. Following is a checklist of pitfalls to guard
against.

- Unclear objective
- Using simulation when analytic solution is appropriate
- Invalid model
- Simulation model too complex or too simple
- Erroneous assumptions
- Undocumented assumptions
- Using the wrong input probability distribution
- Replacing a distribution by its mean
- Using the wrong performance measure
- Bugs in the simulation program
- Using standard statistical formulas that assume independence in simulation
output analysis
- Initial bias in output data
- Making one simulation run for a configuration
- Poor schedule and budget planning
- Poor communication among the personnel involved in the simulation study.
 LESSON 2: MODEL BUILDING

OPERATIONS RESEARCH

 Or (management science) is a scientific approach to decision making that seeks

to best design and operate a system, usually under conditions requiring the
allocation of scarce resources.
 Term coined during WW II when leaders asked scientists and engineers
to analyze several military problems.
 A SYSTEM is an organization of interdependent components that work together
to accomplish the goal of the system.
 The scientific approach to decision making requires the use of one or more
MATHEMATICAL MODELS.
 A mathematical model is a mathematical representation of the actual situation
that may be used to make better decisions or clarify the situation.

EXAMPLE 1: A MODELING EXAMPLE

- Eli Daisy produces the drug Wozac in batches by heating a chemical mixture in
a pressurized container.
- Each time a batch is produced, a different amount of Wozac is produced.
 The amount produced is the process yield (measured in pounds).
- Daisy is interested in understanding the factors that influence the yield of Wozac
production process.
- Describe a model-building process for this situation.

EXAMPLE 1: SOLUTION

- Daisy is first interested in determining the factors that influence the process yield.
 This is a descriptive model since it describes the behavior of the actual
yield as a function of various factors.
- Daisy might determine that the following factors influence yield:
 Container volume in liters (V)
 Container pressure in milliliters (P)
 Container temperature in degrees centigrade (T)
  Chemical composition of the processed mixture
- Letting A, B, and C be the percentage of the mixture made up of chemical A, B,
and C, then Daisy might find, for example, that:
Yield = 300 + 0.8V +0.01P + 0.06T + 0.001T*P - 0.01T 2 – 0.001P2 +
11.7A + 9.4B + 16.4C + 19A*B + 11.4A*C – 9.6B*C
- To determine the relationship the yield of the process would have to measure for
many different combinations of the factors.
- Knowledge of this equation would enable Daisy to describe the yield of the
production process once volume, pressure, temperature, and chemical
composition were known.

PRESCRIPTION MODELS “prescribe” behavior for an organization that will

enable it to best meet its goals.

- Components of this model include:

Components of this model include:
decision variables
constraints

An optimization model seeks to find values of the decision variables that optimize
(maximize or minimize) an objective function among the set of all values for the decision
variables that satisfy the given constraints.

LESSON 3: SYSTEM ANALYSIS

WHAT IS SYSTEM ANALYSIS?

- Systems analysis is the process by which an individual(s) studies a system such

that an information system can be analyzed, modeled, and a logical alternative
can be chosen.
- Systems analysis is the process of examining a business situation for the
purpose of developing a system solution to a problem or devising improvements
to such a situation.
- System analysis is the process of observing systems for troubleshooting or
development purposes. It is applied to information technology, where computer-
based systems require defined analysis according to their makeup and design.

REASONS FOR INITIATING PROJECTS

- The organization has a problem.

- A new opportunity exists to make changes within the organization.
- A directive has been issues that mandates changes to be made.

PROPOSING A PROJECT

- The project proposal is the attempt to respond to or take advantage of a

particular situation and is an essential element for correctly launching the system
analysis.
- System projects that are to be shared by a number of departments and users are
usually approved by a committee rather than an individual.
- The project proposal is an attempt to respond to or take advantage of a certain
scenario and it is a necessary component for starting the system analysis
correctly.
- System project involving many departments and users are typically prove by a
committee rather than an individual. When a project proposal is presented to
committee, it is assessed its merits and decides whether or not it could be
approved.
 - The committee is made up of persons from various organizational functional
areas who are interested in the proposed system operation and information.

PROJECT PROPOSAL CONTENT

- The specifics of the business situation or problem.

- The significance of the problem to the organization.
- Alternative solutions.
- The possible use of computer information systems to solve the problem.
- The various people interested in or possessing knowledge relevant to the
problem.

SYSTEM DEVELOPMENT LIFE CYCLE (SDLC)

- The systems development life cycle (SDLC) describes a set of steps that
produces a new computer information system.
- The SDLC is a problem-solving process.
- The SDLC is a sequence of stages that results in creation of a new computer
permission system.

FEASIBILITY STUDY

- Feasibility study investigates the problem and the information needs of the
stakeholders.
- The goal of the feasibility study is to consider alternative information systems
solutions, evaluate their feasibility, and propose the alternative most suitable to
the organization.
- The feasibility study looks into the problem and the stakeholders’ information
need.
- It aims to assess the resources needed to create an information system solution
as well as the cost and advantages of doing so as well as the solutions feasibility.
 - A feasibility study goal is to consider various system solutions, assess their
practicality and recommend the best option for the firm.

METHODS FOR GATHERING INFORMATION IN A FEASIBILITY STUDY

- Interviewing users, employees, managers, and customers. (Most popular)

- Developing and administering questionnaires to the interested stakeholders such
as potential users of the information system.
- Observing or monitoring users of the current system to determine their needs as
well as their satisfaction and dissatisfaction in a current system.
- Collecting, examining, and analyzing documents, reports, layouts, procedures,
manuals, and any other documentation relating to the operation of current
system.
- Modeling, observing, and simulating the work activities of the current system.

SDLC PHASES

Is a process for resolving problems. A number of actions are delineated for each
step in the process. The business will be solved if these actions are completed in the
order stipulated by the SDLC.

PRELIMINARY INVESTIGATION

- The problem is defined and investigated. Due to limited resources, an

organization can undertake only those projects that are critical to its mission,
goals and objectives. Therefore, the goal of preliminary investigation is simply to
identify, select a project for development from among all the projects that are
under consideration.

REQUIREMENTS DEFINITION

- Specifies or the specifics of the current system as well as the requirements of the
proposed new system or studied and define.
SYSTEM DESIGN

- A general design is developed with the purpose of planning for the construction
of the new system.

SYSTEMS DEVELOPMENT

- The new system is created.

SYSTEM INSTALLATION

- This is the current operation is converted to run on the new system.

SYSTEMS EVALUATION AND MONITORING

- The newly operational system is evaluated and monitored for the purpose of
enhancing its performance and adding value to a system’s function.

It is a cycle; it means that looping back from a later phase on earlier one may
occur if the need arises. Each phase includes its own set of development activities.
Some of the activities may occur multiple phases across all phases, management
actively is fairly consistent. The SDLC is not the standard and may differ from one
company to the next. In other words, from one SDLC to next the titles and number of
phases may differ.

However, the SDLC described is for the most part represent what is commonly
used by businesses. And each phase certain activity is performed, the result of these
activities is documented in a report, identify with that phase and management reviews
that results the phase and determines if the project is to proceed to the next phase.
 LESSON 4: CLASSIFICATION OF SYSTEM

There are several classifications of a system. These systems can be classified in a

variety of way in order to gain a better understanding of them

1. PHYSICAL OR ABSTRACT SYSTEM (STATIC, DYNAMIC)

Physical system are the physical objects that human can touch and see or
sense. This can be either static or dynamic. Take for instance a computer
center, desk and chair are the stationary components that in the operation
of the computer center. Parts that are static do not change. The dynamic
system is always evolving on the other hand.
Computer systems are dynamic system like programs, data and
application can be changed to meet the demands of the user.
Abstract system is conceptual. These are not physical entities. They may
be formula to representation or model of a real system.

2. OPEN CLOSED SYSTEM

To achieve their goal, system interact with their surroundings.
Environmental elements for the system are things that are part. Systems
can be into two types based on how they interact with their environment.
These two types are open system and close system.
The close system are systems that don’t communicate with their
surroundings. Close system is only existed in theory.

3. MAN MADE INFORMATION SYSTEM (FORMAL, INFORMAL AND

COMPUTER-BASED)
The primary goal of information system is to handle data for a certain
company or business. The few functions include file maintenance,
information production and report writing.
An information system generates tailored data based on the organization’s
requirements.
 Formal information system is concerned in information flow from upper
management to lower management. Memos, instructions and other forms
of communication flow are examples.
Lower authority on the other hand, may provide the feedback to upper
management.
Informal information system employees are the heart of the informal
system. This are designed to address difficulties that arise in the
workplace on a regular basis.
Computer base information system, this class of system depends on the
use of computer for managing business applications.

SYSTEM THEORY

 System theory aims to explain the purpose and propose ideas about traits
emerged in complex system but do not appear to occur in anyone’s system
within the total.
 Emergent behavior is the term for this. So, when the complex system exhibits
emergent behavior, it indicates that this feature exhibit traits that do not appear
on their own.
 System theory is an interdisciplinary study of systems external link as they relate
to one another within a larger, more complex system.
 System theory seeks to explain and develop hypotheses around characteristics
that arise within complex systems that seemingly could not arise in any single
system within the whole. This is referred to as emergent behavior.
 ASSESSMENT EXAM 1

Simulation - is used before an existing system is altered or a new system built, to

reduce the chances of failure to meet specifications, to eliminate unforeseen
bottlenecks, to prevent under or over-utilization of resources, and to optimize system
performance.

Simulation Modeling - constitutes to a unique approach which enables the

simultaneous handling a range of factors and ‘see’ their influence on the behavior of a
system.

System Modeling - is written either as a computer program or as some kind of input

into simulator software.

Components of Simulation Model: System Entities, Input Variables, Performance

Measures, Functional Relationships

Model - is a representation of the construction and working of some system of

interest.

Simulator - is a device, computer program, or system that performs simulation.

Simulation - is to pretend that one deals with a real thing while really working with an
imitation.

Model - its purpose is to enable the analyst to predict the effect of changes to the
system.

Modeling - is the process of producing a model.

 LESSON 5: MODEL CLASSIFICATION

QUANTITATIVE METHOD

 Quantitative methods emphasize objective measurements and the statistical,

mathematical, or numerical analysis of data collected through polls,
questionnaires, and surveys, or by manipulating pre-existing statistical data
using computational techniques.

QUANTITATIVE RESEARCH

 Quantitative research focuses on gathering numerical data and generalizing it

across groups of people or to explain a particular phenomenon.

MODEL BUILDING

 Model building refers to the process of deciding what model to use for the
context.
 Operations research (often referred to as management science) is simply a
scientific approach to decision making that seeks to best design and operate a
system, usually under conditions requiring the allocation of scarce resources.

PROCESS YIELD

 Process yield is used to measure performance of the process. It can be

explained as the percentage of products that pass through the compliance
check.
 Measures of yield:
 First Time Yield (FTY)
 Final Yield (FY)

FLOW PROCESS CHART

 Is a symbolic representation that illustrates the sequence of activities within a

process.
 Three common types of flow process chart:
1. Man-type Chart
 2. Material-type Chart
3. Equipment-type Chart

CONCEPTUAL MODELS

 A conceptual framework can help guide research by visualizing theoretical

constructs (and variables) of interest.
 Designing conceptual model begins:
1. Conducting a thorough review of the literature.
2. Search peer-reviewed journal articles, books/monographs, conference
papers, and other relevant references.
3. Organize the literature around the topic.
4. Begin to develop research questions or objectives based on theory.

PRESCRIPTIVE OR OPTIMIZATION MODELS

 A prescriptive model “prescribes” behavior for an organization that will enable it

to best meet its goal(s).
 There are 3 components of prescriptive model and these are:
1. Object Function
2. Decision Variables
3. Constraints

STATIC AND DYNAMIC MODELS

 A static model is one in which the decision variables do not involve sequences
of decisions over multiple periods.
 A dynamic model is a model in which the decision variables do involve
sequences of decisions over multiple records.

PETRI NETS MODEL

 Petri nets were introduced by C.A. Petri in the early 1960s.

 A distributed system is any network structure that consists of autonomous
computers that are connected using a distribution middleware.
  Petri nets are specific types of modeling constructs useful in data analysis,
simulations, business process modeling and other scenarios.

FINITE AUTOMATA

 Finite automata or finite state machine is the simplest machine that is used for
recognizing patterns.

APPLICATIONS OF FINITE AUTOMATA

1. Designing lexical scanners.

2. Designing spell checkers
3. Sequential circuit design (transducer)
4. Designing text editors.

TYPE OF FINITE AUTOMATA

1. Acceptors
2. Classifiers
3. Transducers
4. Sequencers