By simulation one means a description of a system or event with a mathematical model or calculation algorithum, which is normally realised in a computer program. If the model contains random components, then the simulation is called Monte Carlo.
Simulations (usually Monte-Carlo) are used often to solve theoretical problems where explicit calculations are impossible or are too demanding to be performed. They may also be used when real experiments are too dear, difficult or dangerous to perform. Since a simulation model is only a more or less good approximation of reality, it can never completely replace an actual experiment.
Applied to measurements, simulation can be used for example to calculate the effects of complex calibration and control procedures.