The Efficiency of Variance Reduction in Manufacturing and Service Systems: The Comparison of the Control Variates and Stratified Sampling

Abstract

There has been a great interest in the use of variance reduction techniques (VRTs) in simulation output analysis for the purpose of improving accuracy when the performance measurements of complex production and service systems are estimated. Therefore, a simulation output analysis to improve the accuracy and reliability of the output is required. The performance measurements are required to have a narrow and strong confidence interval. For a given confidence level, a smaller confidence interval is supposed to be better than the larger one. The wide of confidence interval, determined by the half length, will depend on the variance. Generally, increased replication of the simulation model appears to have been the easiest way to reduce variance but this increases the simulation costs in complex-structured and large-sized manufacturing and service systems. Thus, VRTs are used in experiments to avoid computational cost of decision-making processes for more precise results. In this study, the effect of Control Variates (CVs) and Stratified Sampling (SS) techniques in reducing variance of the performance measurements of M/M/1 and GI/G/1 queue models is investigated considering four probability distributions utilizing randomly generated parameters for arrival and service processes.