Simulation is one of the modeling techniques that are listed as tools and techniques to develop schedule (PMI process). A simulation can calculate an overall schedule based on the component activity duration estimates. It can be run (calculating) multiple times with varying estimates. Running it multiple times based on the probability of the different estimates can help to estimate the overall schedule and show some of the areas of largest schedule risk.
Simulation is described in section 18.104.22.168 of the PMBOK, 5th edition.
Simulations may also be a part of the project activities, for instance as part of a test of a product or process.