Dear Kaveh, there are tons of methods to simulate that. The common problem are the boundary conditions and general assumptions that you have to make. Please find below some literature to read through.
Abaqus would also be able to do that simulation, but DEFORM is surely more specialized.
Best regards
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We have developed some methodology to simulate the residual stresses induced by orthogonal cutting using equivalent loadings, the advantage of which is to avoid the complex simulation of cutting mechanisms. Any thermomechanical Finite Element code can be used for the numerical simulation. You can find details about the method in the following references :
F. Valiorgue, J. Rech, H. Hamdi, Ph. Gilles, J.M. Bergheau, “A new approach for the modelling of residual stresses induced by turning of 316L”, Journal of Materials Processing Technology, Vol. 191, Issues 1-3, Aug. 2007, pp. 270-273.
F. Valiorgue, J. Rech, H. Hamdi, P. Gilles, J.M. Bergheau, « 3D modeling of residual stresses induced in finish turning of an AISI304L stainless steel », Int. J. of Machine Tools and Manufacture, Vol. 53, Issue 1, pp. 77-90, 2012.