The use of a model of some activity or process to examine the way it works and to solve problems associated with it. The model may be a physical construction; e.g. the stresses to which an aeroplane design may be subject can be examined by simulating its flight by means of a scale mode! in a wind tunnel. More generally, however, a mathematical model of the system concerned will be constructed and a computer used to reproduce the essential workings of the system. In this latter sense, simulation has come to play a very important role in operations research. The reason for its use is, of course, that it is generally much cheaper to construct a model, physical or mathematical, than to operate the process itself.
Reference: The Penguin Dictionary of Economics, 3rd edt.