A method for simulating behavior of first and second interrelated components within a system. The method comprises modelling behavior of said first and second components using first and second functional specifications; simulating behavior of said first and second components in predetermined circumstances by instantiating at least one first entity within a hierarchy of interrelated entities; and instantiating at least one further entity in response to the or each instantiated first entity. The or each further entity is selected by a simulation system on the basis of its hierarchical relationship with the at least one first entity.