What is a simulation model?

A simulation model is a digital twin of a business, representing the core activities that drive outcomes. In the lesson you will learn how simulation models are structured in Elara.

Processes and resources

Models in Elara consist of resources and processes. Resources represent everything the business has at a certain point in time – including capital, equipment, people, information, and ongoing contracts/deals/arrangements. Processes represent the activities that occur over time and which may alter the state of the resources (e.g. spend some money to acquire some equipment, etc). You use the EDK the define the resources and processes in a model, and Elara will automatically perform an event-driven simulation of the model for you. You can use the same model to simulate different possible scenarios.

Predicting the future

Often the drivers of outcomes are not deterministic or fully known in advance. For example, a retailer will not know precisely how many customers will come through the door tomorrow, but they can usually make an approximate estimate. Models in Elara can include randomness or uncertainty, and you can forecast a range of future possibilties with a Monte Carlo approach. You can leverage advanced machine learning within an Elara model to easily tame messy, real-world situations that that don't permit a straightforard mathematical description.

Optimizing the future

The final aspect of a model are the optimization objectives and decisions. You can define a high-level objective to maximise in the EDK, as well as set of decisions to be made. Elara will explore the various options available in the decision space to quickly determine how to achieve the optimal outcome.

A model is just one representation

It is worth pointing out that for a given business or organization, there may be more than one relevant model. A model is just a "representation" or "view" of the business (or some part of the business), and different representations may be suitable for different goals. For example, you may have a high-level model that predicts annual turnover and profit, plus another low-level model representing the specific activities of a single department. There is nothing stopping the business benefiting from insights and recommendation from both models simultaneously. You will need to tailor the scope and detail of your models to suit the business problems being addressed.

Next Steps

In the

next lesson you will learn how Elara uses resources to model the state of a business and processes to model core activities.