Discuss two advantages and three disadvantages of simulation models.

Simulation has many advantages. One advantage is that the simulation model provides a convenient experimental laboratory. An analyst can perform what-if studies, that is, change the design characteristics or operating rules to determine their impact without changing the actual system. For instance, the number of jobs entering a manufacturing process can be changed to learn the effect of greater demand on waiting times. Another advantage is that the modeler does not have to disrupt the current process to examine alternative equipment, material and information flows, decision rules, and configurations.

Disadvantages of simulation include the difficulty of collecting the appropriate input data, selection of the correct probability distributions to model uncertainty, and accuracy of outputs. Another challenge with simulation is designing good experiments to test for statistically significant differences in various scenarios and changes in decision variables. Simulation models provide the opportunity to make mistakes in programming, and structuring the simulation model is highly dependent on the expertise of the modeler. Finally, sometimes the results of the simulation are not very traceable, so it is hard to clearly determine cause and effect, and that is why experimental design is so important.