According to K. Stanovich1 there is a process in our brain which is used to decouple internal model of reality from reality. It takes some effort to use this process, because our brain needs to pass several stages to activate a simulation. First, an autonomous mind should notice need to pause its processes and pass control to higher functions. The autonomous mind is what other researchers call system 1 or slow mind.
After that a person should understand the need to run simulation and have no obstacles to decouple internal model of reality from person’s surroundings. Of course the model should be correct to yield any positive results. So a person should have some knowledge not only about world but also about running simulations, because it isn’t some kind of intuitive knowledge all people have from birth.
Also cognitive biases may prevent simulation from starting, because they often prevent control elevation from more automatic functions to higher ones. But when a person finally decouples from reality and starts simulation, how can it help?
It can be used to find an expected result from an action: a person imagines how this action leads to consequences. If different actions were imagined, a person can compare results and use this findings to choose between these actions. So simulation can be used to make predictions and choose an alternative with the best outcome.
Of course if you know the initial conditions and the outcome from your past experience, you probably don’t need to simulate this situation.
1. ^ On the distinction between rationality and intelligence: Implications for understanding individual differences in reasoning. KE Stanovich - In K Holyoak, R Morrison (Eds.) (pp. 343-365), The Oxford handbook of thinking and reasoning, 2012.