It is not easy to find a good production schedule which can be used in practice. Therefore, production scheduling simulation with a simple dispatching rule or a set of dispatching rules is used. However, a simple dispatching rule may not create a robust schedule, for the same rule is blindly applied to all internal production processes. The presumption is that there might be a specific combination of appropriate rules that can improve the efficiency of a total production system for a certain type of orders. In order to acquire a better set of dispatching rules, simulation is used to examine the performance of various combinations of dispatching rule sets. There are innumerable combination of rule sets. Hence it takes too much computer simulation time to find a robust set of dispatching rule for a specific production system. Therefore, we propose a concept of the knowledge based simulation to circumvent the problem. The knowledge based simulation consists of knowledge bases, an inference engine and a simulator. The knowledge base is made of rule sets that is extracted from both simulation and human intuition obtained by the simulation studies. For a certain type of orders, the proposed system provides several sets of dispatching rules that are expected to generate better results. Then the scheduler tries to find the best by simulating all proposed set of rules with the simulator. The knowledge-based simulator armed with the acquired knowledge has produced improved solutions in terms of time and scheduling performance.