Process simulation is a model-based representation of  chemical,  physical,  biological, and other technical processes and unit operations in software. Basic prerequisites for the model are chemical and physical properties of pure components and mixtures, of reactions, and of mathematical models which, in combination, allow the calculation of process properties by the software.
Process simulation software describes processes in flow diagrams where unit operations are positioned and connected by product or educt streams. The software solves the mass and energy balance to find a stable operating point on specified parameters. The goal of a process simulation is to find optimal conditions for a process. This is essentially an optimization problem which has to be solved in an iterative process.
In the example above the feed stream to the column is defined in terms of its chemical and physical properties. This includes the composition of individual molecular species in the stream; the overall mass flowrate; the streams pressure and temperature. For hydrocarbon systems the Vapor-Liquid Equilibrium Ratios (K-Values) or models that are used to define them are specified by the user. The properties of the column are defined such as the inlet pressure and the number of theoretical plates. The duty of the reboiler and overhead condenser are calculated by the model to achieve a specified composition or other parameter of the bottom and/or top product. The simulation calculates the chemical and physical properties of the product streams, each is assigned a unique number which is used in the mass and energy diagram.
Process simulation uses models which introduce approximations and assumptions but allow the description of a property over a wide range of temperatures and pressures which might not be covered by available real data. Models also allow interpolation and extrapolation - within certain limits - and enable the search for conditions outside the range of known properties.