Simulation modelling is something that can be used in a variety of different situations. Most commonly it is used to represent the effect of changes to a situation, such as a process variable or even an entire process. It can be usefully employed to show the effects of "what if" scenarios, such as what will happen to process turnaround times if the number of customer interactions increases by 25%, without a corresponding increase in available staff to deal with the customers.
One of the clear benefits of simulation modelling is that it provides a dynamic model which can give a realistic view of a situation before it is actually implemented. As simulation modelling software can be relatively low cost (compared to the cost of installing a new process), for a large and expensive process, this can be extremely cost effective. eg. the cost of building a dynamic simulation model of a new motor car production line far outweighs the cost of the real thing.
Its main disadvantage is that for low volume, low cost processes, purchasing and building a simulation model can be expensive, time consuming and unnecessarily expensive.