SIMULATING COMPLEX SYSTEMS

This chapter discusses the applications of computer modeling for business management. Using several common business situations, the ways in which computer models can simplify management decisions are discussed. Computer simulation employs program models to give information about how the system might respond under different conditions. However, computer simulation is only helpful if the model and the data used in the simulation are accurate enough. The choice of a model depends on the questions one wants to be answered about the system. A model of the normal operation of a vending machine is very different from a model of how the machine will react to being kicked by vandals or frustrated customers. The model of a system includes the specification of its inputs and outputs, and its internal states. It must also include rules for specifying how the state and output change over time as new inputs are added.