How to Build Simulation Systems

In order to create a simulation system we need a realistic model of the system behavior. One way of simulation is to create smaller versions of the real system.
The simulation system may use only software or a combination of software and hardware to model the real system. The simulation software often involves the integration of artificial intelligence and other modeling techniques.
What applications fall under this category?
Simulation is widely used in many fields. Some of the applications are:

• Models of planes and cars that are tested in wind tunnels to determine the aerodynamic properties.
• Used in computer Games (E.g. SimCity, car games etc). This simulates the working in a city, the roads, people talking, playing games etc.
• War tactics that are simulated using simulated battlefields.
• Most Embedded Systems are developed by simulation software before they ever make it to the chip fabrication labs.
• Stochastic simulation models are often used to model applications such as weather forecasting systems.
• Social simulation is used to model socio-economic situations.
• It is extensively used in the field of operations research.