OR and Simulation in combination for Optimization

This chapter aims to promote and illustrate the fruitful combination of classical Operations Research (OR) and Computer Simulation. First, a highly instructive example of parallel queues will be studied. This simple example already shows the necessary combination of OR (queueing) and simulation that appears to be of practical interest such as for call center optimization. Next, two more ’real life’ applications are regarded: - blood platelet production and inventory management at blood banks, and - train conflict resolution for railway junctions. Both applications show the useful combination of Simulation and optimization methods from OR, in particular Stochastic Dynamic Programming (SDP) and Markov decision theory (MDP), to obtain simple rules that are nearly optimal. The results are based on real life Dutch case studies and show that this combined OR-Simulation approach can be most useful for ’practical optimization’ and that it is still wide open for further application.