Simulation can be used as a type of research. The data are collected from a fictive reality. With these data every kind of research can be performed.
What is Simulation used for?
Simulation is often associated with an unreal world. One can simulate to be sick so you do not have to go to school or go to your work. So let us be frank, simulation is not the real world. However it might look as the real word.
Companies can use simulation to forecast the future. It all depends on the quality of the model. It is like the weather forecast. A century ago the weather forecast was rather poor. A person could look at the sky and predict it will rain in an hour or so. Later the models improved by using information all over the world like high and low pressure and temperature. Decades ago only the weather forecast for the next day was fairly right. Lately the models improved and now a forecast for a whole week is rather well predicted. So, if you want to use simulation as a research, take care to have a good model.
Once you have a good model, the model can be adjusted. For instance, a prediction can be done about how many people will travel by train. Now suppose they double the price. Would still the same amount of people travel by train? Or suppose the price for gasoline rises, how many people would travel by train then? To make a good forecast, all these aspects should be part of the model. Besides that all the interrelations between the aspects should be investigated and this is the reason why simulation is difficult to use.
The advantage of using simulation
Even when the model is fairly poor, simulation can be used to run a business. All kinds of research can be done with it, like describing and comparing (predicted) situations.
Sometimes it is better to do a simulation instead of real-life experiments. In a simulation study it is better to predict the consequences of an accident with a train transporting a toxic substance than in reality.
Managers can use simulation to predict what will happen if an order comes with which they can make a lot of profit. A spreadsheet can be used to calculate how much profit the company will make. But the amount of work also must be part of making a good decision. Perhaps a larger machine should be purchased. The use of this machine may require a larger production facility, and perhaps even a new factory must be built. The acceptance of the assignment may turn out to be negative. Perhaps another solution can be worked out. With a different decision, the future looks slightly different. A number of effects can be simulated to see which decision is the best.
Some managers claim that they get better results on their gut feelings and point to some people who had really made it. Well, there are always success stories of the lucky guys. However, there are many more stories about unsuccessful enterprises but nobody likes to tell these. Best of all, make decisions based on good arguments. Simulation is a way that can help you with that.
Many people complain that predictions based on simulation almost never come true. Well, nobody can predict the future. Simulation only helps managers make better decisions.
Related topics to simulation:
Simulation is one of the basic types of research
Every research can be classified on three dimensions:
1) the research design
2) the location of data collection and
3) the number of cases.
Together they form the research cube. With this classification 72 types of research can be distinguished.