What factors should you consider when choosing a simulation model for your business?

1 Purpose and scope

The first factor to consider is the purpose and scope of your simulation model. What are the main questions or problems you want to address? What are the key variables and outcomes you want to measure? How detailed and realistic do you want your model to be? Depending on your answers, you may need a different type of simulation model, such as discrete-event, system dynamics, agent-based, or Monte Carlo.

2 Data and assumptions

The second factor to consider is the data and assumptions you use to build and run your simulation model. Data is the foundation of any simulation model, so you need to ensure that it is accurate, relevant, and reliable. You also need to make explicit and reasonable assumptions about the behavior and interactions of the elements in your model, such as customers, competitors, resources, or policies. You should document and validate your data and assumptions, and test their sensitivity and robustness.

3 Complexity and uncertainty

The third factor to consider is the complexity and uncertainty of your simulation model. Complexity refers to the number and interdependence of the elements in your model, while uncertainty refers to the variability and unpredictability of their behavior and outcomes. Both complexity and uncertainty can affect the performance and validity of your simulation model, so you need to balance them with your purpose and scope. You should also use appropriate methods and tools to handle complexity and uncertainty, such as simplification, calibration, verification, validation, or sensitivity analysis.

5 Communication and presentation

The fifth factor to consider is the communication and presentation of your simulation model and its results. Communication involves the process of sharing and discussing your simulation model and its findings with your stakeholders, such as managers, clients, or partners. Presentation involves the format and style of your simulation model and its outputs, such as reports, graphs, tables, or animations. You should use effective communication and presentation techniques to convey your message, engage your audience, and support your decision making.

6 Evaluation and improvement

The sixth factor to consider is the evaluation and improvement of your simulation model and its outcomes. Evaluation involves the assessment of the quality, usefulness, and impact of your simulation model and its results, based on criteria such as accuracy, validity, reliability, relevance, or efficiency. Improvement involves the revision and refinement of your simulation model and its processes, based on feedback, learning, or new information. You should use continuous evaluation and improvement cycles to enhance your simulation model and its performance.