Potential of Simulation Effort Reduction by Intelligent Simulation Budget Management for Multi-Item and Multi-Stage Production Systems

Simulation is utilized to analyze multi-item and multi-stage production systems that are driven by material requirements planning (MRP). The range of possible parameter combinations and solutions increases as the model of the production system includes more components. In simulation experiments with a fixed number of replications per iteration, it might be unfeasible to test a large range of these MRP parameters. This paper discusses how to efficiently manage the simulation budget, to avoid wasting it in exploring non-promising solutions. Therefore, intelligent simulation budget management (SBM) is applied, where the results of the current iteration's replications are compared to the average results of the previous iterations. The current iteration is skipped if its average overall cost is outside the defined percentile boundaries. A simulation study using two multi-item and multi-stage MRP systems is performed to evaluate SBM potential. The results show that the SBM methodology leads to significantly reduced simulation efforts.