In todays economy all manufacturers need to pay attention on how to build strong and long-term relationships with their dealers chain. In fact, it has been demonstrated that short term policies aimed to provide dealers immediate benefits (e.g., price discounts) may prevent the development of long term and fruitful relationships. Also supporting dealers in promoting manufacturers products has been proved as a sustainable strategy in long run.
Another implication of manufacturers bounded policies refers to their inclination to reinvest significant amounts of their sales revenues in advertising and product portfolio improvement, without taking into account the need to invest in dealers human resources, to make their strategies sustainable.
Based of the above remarks, this paper aims to demonstrate the usefulness of a system dynamics approach in involving both manufacturers and dealers in strategic reasoning.
Empirical evidence arising from a research project conducted by the authors with a manufacture operating in a high-tech industry, shows that using system dynamics as a methodology to support communication and learning may act as a significant lever to design successfully long term oriented policies. Such policies ought to increase dealers skills and motivation, and improve potential customers awareness of product benefits, at the same time.
The evolution of fleet maintenance and management policies highlights the growing importance of maintenance issues in both private and public companies. The need to improve maintenance performance requires an accurate evaluation of the trade-off between costs and benefits related to alternative fleet maintenance and management policies. However, the complexity of maintenance system makes this evaluation a very difficult task.
More often a fleet manager deals with the following key issues:
is it more profitable to repair or to renew the company fleet?
Is it more convenient to reduce the average age of the different assets (e.g., by increasing investments in new bus) or to expand the maintenance activities (e.g., by rising repairing costs)?
In fact, fleet managers cannot ignore the impact of their decisions on both company service and financial performance over time.
Aim of this paper is to show how the System Dynamics approach can effectively support fleet managers in designing and evaluating their strategies. The simulation model here presented is based on the result of a project with two Italian city bus companies. Through such tool decision makers can test different fleet strategies and assess their effects on company performance.
Electric power systems are traditionally designed and developed with the assumption that demand is exogenous to the system. Connecting the feedbacks from the system to consumers will provide incentives for consumers to reduce demand during periods of high system prices. A system dynamics model is used to analyze the dynamics and long term implications of adoption of technology to enable demand response. The model includes the decision by consumers to adopt demand response technology along with decisions by investors to build generation capacity. The adoption process reduces overall system prices for peak demand periods, creating feedbacks with generation investment. The effects of technology improvement via learning, long term demand elasticity, and policies to promote adoption are considered. The results of the simulations show that diminishing returns to adopters and significant externalities in terms of free rider effects limit the attraction of individual adoption. A subsidy to alleviate the costs to individuals can be justified by the significant system level savings from widespread adoption. Several pernicious effects can emerge from large scale demand response, however, including increased price volatility due to a reduction in generation capacity reserve margin, an increase in long term demand, and increased emissions from the substitution of coal plants for natural gas and renewable generation capacity.
PANEL: Andrei Borshchev, Xjtek,Russia; Nate Osgood MIT,USA; Mark Paich, Decisio Consulting, USA; Hazhir Rahmandad, Sloan School of Management, MIT, USA; Mark Heffernan, International System Dynamics, Australia; Sara Metcalf, University of Illinois, USA; Chris Johnson General Electric, USA;Geoff McDonnell UNSW Australia; Other users from industry.
There is increasing interest in combining agent based (AB) and system dynamics (SD) modeling methods. This workshop will demonstrate the differences between the AB and SD approaches using some popular examples from the Dynamics of Contagion and the Diffusion of Innovation, using the AnyLogic multi-method software. It will also walk through some practical examples of the use of combined methods in health, marketing and other industries. The workshop will conclude with a "warts and all" panel discussion involving experienced SD practitioners and researchers in SD, geography and computer science, all of whom are adding AB methods to their work.
Sustainable use of a natural resource ensures that the ecosystem associated with that use will also provide long term environmental services to society. Such services might include the provision of clean water, removal of excess CO2 from the atmosphere, flood protection, pleasant vistas, or enhanced biodiversity. These benefits are becoming less abundant as inappropriate resource uses hasten environmental degradation.
In theory, if beneficiaries pay for the environmental services received, and these payments are given to the resource users/owners to reward, or encourage, sustainable resource use, then such sustainable use will be assured. Schemes to implement such arrangements might be able to support conservation programs, and also supplement income of poor farmers and forest dwellers. Such payments are also seen as a means of encouraging better management of carbon dioxide in our atmosphere, by paying for forest practices which can store CO2.
How do such systems actually work? Can payments for environmental services encourage better resource management? Might they also create disincentives for management based on ethics, altruism, and stewardship? A generic system dynamics model was used to examine these questions.
Multiple objective optimisation (MOO) is an optimisation approach that has been widely used to solve optimisation problems with more than one objective function. The benefit of this approach is that it generates a set of non-dominated solutions which a policy maker can explore and evaluate before making a final optimal selection. This paper demonstrates that MOO can be used to assist policy makers explore a richer set of alternatives when deciding on a range of values for key parameters in their system dynamics model. In order to demonstrate the approach, a well-known case study The Domestic Manufacturing Company is used, and a stock and flow model and a multiple objective optimiser are designed and coded. The results show that valid solutions are generated, and that each of these solutions can be examined independently and hence give greater insight into the problem at hand - before a decision is made as to the most appropriate solution.
We analyze experimental data from the Beer Game in which the customer orders are constant (4 cases/week) and all the subjects are informed about this fact before the game starts. Even though the experimental settings disfavor oscillation and amplification, we still observe them. To analyze the decisions made by the subjects, we first estimate the decision rule used by Sterman (1989). This analysis suggests that typically subjects do not understand the time delays and the stock and flow structure of the Beer Game. Next, we relax some assumptions of this decision rule and use more sophisticated alternatives. These alternative decision rules do not yield overall improvement in terms of fit to the real data. However, for some subjects, these decision rules lead to significant improvement. Our analysis reveals strong evidence that these subjects were caught up in a reinforcing phantom ordering loop even though the experimental conditions strongly disfavor such behavior.
This paper discusses the benefits of having an interchange standard for system dynamics models, why XML is a good candidate on which to build such as standard, and how the development process may take place through community-wide participation. The paper also presents XMILE, a prototype model interchange standard, as a proof of the concept.
This report builds on a previous epidemiological model of a pneumonic plague outbreak that incorporated three behavioral responses as exogenous drivers and evaluated their importance in allowing us to replicate the actual outbreak (Heinbokel& Potash, ISDC-2003). The current paper describes our subsequent efforts to incorporate those critical and controlling behavioral dimensions into this model as critical feedback loops. We conceptually deconstructed the event into four segments: becoming aware of the outbreak, deciding to act in response, choosing a specific response, and returning to normal behavior. We utilized current psychological theories, such as the Psychometric Paradigm and Brunswiks Lens Model, to build small, conceptually clear, transferable, and combinable behavioral submodels to simulate the first three segments involving information and social networks, social trust, and risk perceptions. We believe these modeling efforts comprise first steps in a critical process of translating current, frequently static, risk theories to dynamically responsive vehicles that can be flexibly and quantitatively applied to reliably aid in understanding and influencing responses to such public health threats, other extreme events, and other dynamic risk scenarios in general.
The use of System Dynamic software tools are becoming a popular way of investigating complex problems. However, along with the use of these tools exists the risk of relying too heavily on the numerical part of the analysis and neglecting the preparation phase for analysis. Any modelling procedure in System Dynamic modelling goes through a conceptual phase that uses the Learning Loop approach. This phase is most often done unintentionally. Using the Learning Loop approach consciously facilitates the group modelling process to acquire four successive phases, i.e. Definition, Clarification, Confirmation and Implementation. This enables a clear structure in the process, from acquiring the task to documenting the results. Only by intentionally using the Learning Loop approach in a managed manner, can the full potential of the process be exploited. Qualitative analysis does not replace simulations with a computer model but simulations should serve as a continuation to reconfirm or refute qualitative hypothesis and a simulation should only occur when the mental model has been tested. Systems Analysis, including its thinking, analysis and dynamics, is not a method, but rather an adaptive learning behaviour. It is a behaviour that finds the optimally adapted method, applying at some times SD computer tools.
Microfinance institutions (MFIs) provide credit, savings, and other financial services to the poor and must successfully manage large volumes of small transactions. SymBanc is a system dynamics simulator designed to introduce students to the complexities of managing a Microfinance Institution (MFI) or to engage experienced practitioners in a discussion of the key determinants of success in such a dynamic environment. The simulator allows students and practitioners to grow an MFI from a single branch to a large network by making a variety of decisions about target market, staffing and facilities, loan and savings product design, and sources of external funding. Detailed feedback enables them to fine-tune their strategies during a simulation. This paper begins with some background on Microfinance Institutions and then presents the structure of the model underlying SymBanc and results of typical simulations. Initial experience using SymBanc and future enhancements contemplated for it are also described.
We were at the Lyons Pub. Peterson walked in with a presentable young man.
This is Randy, she said, pulling up a chair. Hes just back from Egypt. Ordering a beer, Peterson fished a photo from her pocket. Doesnt Randy look grand in front of the Sphinx?
Sedgewick turned to the young man Tell us about your trip.
Randy smiled in recollection. I stayed at Le Meridien in Giza. Costs a bloody fortune, but its worth it. Has a swim-in bar, dont you know.
And the Sphinx? Sedgewick prompted.
Randys expression turned weighty. Big. Damn big.
So youve never actually been to Egypt. Sedgewick said sadly. And, never seen the Sphinx.
Like Randy, many of us return from a model without true insight. In this workshop well deeply explore a model or two. You will see how eigenanalysis complements and speeds traditional approaches to understanding models. Math-phobics and math-lovers are equally welcome.
A number of papers have been published describing various System Dynamics (SD) models of Higher Education institutions and issues, on topics including the role of SD in Corporate Governance, Planning, Resourcing & Budgeting, Teaching Quality, Teaching Practice, Microworlds and Enrolment Demand. This paper builds on previous papers that provided a catalogue and classification of this work in order to highlight potential areas of research in this field of study and to identify system archetypes at different hierarchical levels and discover new ones. This paper therefore presents an updated taxonomy of System Dynamics Models in Higher Education. This paper builds on the earlier taxonomy by widening the scope of the survey of completed SD investigations in higher education management. The findings from these investigations are briefly described. The taxonomy classifies the completed investigations into six specific areas of concern and five hierarchical levels.
This paper proposes a model that gives deeper insights into the dynamics of interorganizational learning at the example of an alliance of two partnering firms. Current alliance research often tends to neglect a feedback-perspective which might be the reason why certain behavioral effects cannot be explained. However, we identify some major feedback-loops that influence interorganizational learning dynamics based on literature-based alliance research. Here, we focus on the concept of common and private benefits. According to literature findings the dilemma between the two kinds of benefits determines how many resources the parent companies invest in the alliance. We show how gatekeepers might lead a learning alliance to common success. We also show how short-term views of potential private benefits might not only lead to failed common goal attainment but also ruin a firms collaborative reputation in the industry.
A number of papers have been published describing various System Dynamics (SD) models of the Information Systems Investment Appraisal Process from several academic and professional viewpoints. This paper builds on previous papers that provided a catalogue and classification of this work in order to highlight potential areas of research in this field of study and to identify system archetypes at different hierarchical levels and discover new ones. This paper therefore presents an updated taxonomy of System Dynamics Models of Information Systems Investment Appraisal. This paper builds on the earlier taxonomy by widening the scope of the survey of completed SD investigations in the field. The findings from these investigations are briefly described. The taxonomy classifies the completed investigations into five specific areas of concern and six viewpoints.
A policy for rapid deployment of fiber-to-the-home may be in direct conflict with the health of the transceiver component supplier industry. The interests of consumers, regulators, and even service providers are in conflict with the industry that provides a critical component necessary for the service. The industry needs to recognize this conflict and explore strategies to keep itself viable in light of these conflicts. A system dynamics model is used to explore the effects of government policy on the deployment of fiber-to-the-home as a broadband technology. Specifically this article investigates the effects of a policy for rapid broadband deployment on the component supplier that is farthest from the consumer in the value chain.
This research tries to offer a design of the cash waqf management system in a system dynamics model. The Cash Waqf Management is expected to become one of the alternative instruments for the poverty alleviation programs in Indonesia. These programs require huge amount of fund that cannot be provided thoroughly by the government. Therefore, initiation of new sources of fund for such a program is inevitable. In the Islamic sosio-economic concept, there is a source of social fund that is economically and politically free of charge, namely cash waqf. In this concept, Nadzir (cash waqf fund manager) collects the fund from Waqif (cash waqf payer) and invest the money in the real sector and in any syariah-based investment opportunities. Nadzir could allocate profits and returns gained from the investments to poverty alleviation programs. Nadzir is obliged to maintain the amount of fund in such a way that it does not go below the initial amount. Therefore, Nadzir not only should be highly capable, but also needs an experienced financial institution in helping SMEs development efforts. Using the system dynamics methodology, we tries to know the structure of cash waqf system and simulate the behaviour of cash waqf model.
This paper describes a systems dynamics model that reflects the possibility of having three levels of complexity together and articulated on a synchronous synergy of all relevant participants of value added systems: the activities at the firm level, networks of industries, and supporting organizations at the regional level. Following a systemic approach, we have identified eight parameters to measure the attractiveness effect of a region: Clustering and associativeness, Value added, Differentiation value, EVA, Attractiveness leverage, Global market coverage, Innovation and Social Capital. Based on these indicators, we have developed dynamic models for emergent industries which have uncertain trends and no previous regional developments. At this moment we are working on models for the Software, Biotechnology, Aerospace and Autoparts Industries that are currently in the process of clustering in the State of Nuevo Leon (Mexico).
This paper uses a system dynamics model to analyze rule compliance in organizations. The analysis takes securities regulation as an illustrative case but applies to other private, nonprofit, and public activities complying with rules overseen by external bodies in the course of producing goods and services. We consider how three levels of behaviorproducers, internal organizational controllers, and external regulatorsinteract in shaping compliance with rules.
This paper explores the history of the Beer Game, its rules, and lessons. By triangulating information from the literature, archival analysis, and interviews with experts in the field, we have identified the main changes in the game over its almost 50-year history. Additionally, an exploration of possible changes to the game and new games in the field of system dynamics are examined.
How can we build dynamic models to effectively inform our research? The System Dynamics method offers established practices and principles to enable us to do so. This boot camp is directed to expose PhD students to the (iterative) SD modeling process.
The workshop consists of two parts. In the first part participants will engage in the process of model building from a case and getting some basic insights. Issues that will be discussed include problem definition, model boundary, scope/level of aggregation, generating insights from modeling, as well as challenging the research question.
The second part of the boot camp will address actual issues from participants research based on the important themes discussed in the first section. For this we ask participants to submit a one/two page summary of their current research, comprising: abstract, research questions, motivation for model and two or three main issues. We encourage submitting models in whatever stage of progress. The summaries should be in at latest on Monday of the conference (though earlier is strongly suggested!). The case material will be available upfront so that the participants read the case before hand.
Note: this workshop does not involve one-on-one coaching that the modeling assistance workshop offers, nor has it the conference setup of the PhD colloquium. These sessions are complementary to each other and participants are encouraged to participate in all of them.
Product development (PD) is a crucial capability for firms in competitive markets. Building on case studies of software development constructed from fieldwork at a large firm, this paper explores the interaction among the different stages of the PD process, the underlying architecture of the product, and the products in the field. The study corroborates the dynamics of tipping into firefighting (Repenning 2001) that follows quality-productivity tradeoffs under pressure. Moreover, we introduce the concept of the adaptation trap, where intendedly functional adaptation of workload can overload the PD organization and force it into firefighting because there is a delay in seeing the additional resource need from the field and underlying code-base. Finally, the study highlights the importance of architecture and underlying product-base in platform-based product development, through their impact on quality of new models under development, as well as resource requirements for bug-fixing. Put together, these dynamics elucidate some of the reasons why PD capability is hard to build and how it erodes. Consequently, we offer hypotheses on the characteristics of the PD process that increase its strategic significance and discuss some practical challenges in the face of these dynamics.
This paper provides an example of a system dynamics model that incorporates soft variables. The model examines the challenges that a superpower faces while maintaining its position in the global economic system. The effects on aggregate welfare of the population at home and abroad, as well as, issues of sustaining authority in the long run are explored through experimentation with a computer model. This theory is an extension of the framework developed by Saeed(1990), which was used to understand political instability and the failure of the government to stay committed to welfare agendas in the
developing countries. The present model captures the interaction between several institutional actors involved with the economic and the governance systems. They include the public, the authoritarian regime, the reformist movements that seek change within the existing framework, and the dissident movements that turn to violent methods.
A novel archetype, abstracted from published work and supported by anecdotal analogies is proposed. Its novelty is evidenced by a comparison with the 'Relative Control' archetype from Wolstenholme's classification. The significant difference is the erasure of the system boundary from 'Relative Control'. The effect is to bring the dynamics entirely within the system thereby creating a 'political' archetype: a structure internalizing the struggle between two opposed policies.
Pressures from human induced climate-change, pollution, and fossil fuel scarcity stimulate interest in alternative fuel vehicles, and in particular hydrogen fuel cell vehicles (HFCVs). The transition from internal combustion engine vehicles to HFCVs is complex as various chicken-egg mechanisms interact in a highly integrated fashion, and the mechanisms are highly non-linear. This paper focuses on one of the most critical chicken-egg problems: the mutualistic dynamics of HFCV adoption and its fueling infrastructure. The effects of local demand-supply interactions on these dynamics are explored in depth. This paper develops a dynamic, behavioral model of vehicle adoption and fueling infrastructure with explicit spatial structure. Simulations are performed for a reduced version. A homogeneous market with strategically locating fuel-station entrants yields fast transition through the formation of adoption clusters (niches). However, under heterogeneous conditions the same micro-mechanisms can counteract the emergence of a sustainable market. Policy implications are significant. This spatial behavioral dynamic model (SBDM) can be used to compare targeted entrance strategies for hydrogen fuel supply. Insights can be used for an aggregate HFCV transition model that includes other mechanisms. Finally, the paper should stimulate a discussion on merits and limitations of spatial modeling as applied to more general socio-economic issues.
This paper discusses a model developed to assess the effects of land-use changes on traffic congestion and air quality. The inputs are characteristics of development and the outputs are time in traffic per capita, and tons of carbon monoxide from vehicles. As previously developed urban dynamics models have done, the model includes a relationship between the output variables and the attractiveness of the area as a place to live. Particular attention is paid in this paper to challenges associated with modeling the relationship between population and land development in urban areas where alternative land-uses are being contemplated. The evolution of an approach to overcoming the challenges is presented.
Though evaluation of public policy and projects of government-to-government assistance are quite common in Japan, evaluator use logical model bases for evaluation that is simple tree type model without incorporate loop or feed back effects. Author has insisting that SD modeling is applicable for quantitative evaluation of public policy but find some difficulty with traditional group model building method. In this paper, we wish to discuss new style SD/ST model building for public policy evaluation.
The researchers attempt to visualize the complexity and dynamic behaviour of SME clusters in Egypt throughout the process of transferring a clusters state from static (idle) to dynamic (productive). This research constitutes the second of two complementary phases of a more comprehensive research that tries to quantify the qualitative measures of dynamic clusters through extending the application of the business dynamics tool to simulate the effect of different cluster-based economic development policy scenarios. After developing the mental model and during the conceptualization phase, the researchers highlighted the key-leverage causal loops showing feedback effects and uncovering the hidden cause effect relationships existing between the most important elements such as trust level inside the cluster, competition and the number of supporting industries. After validating the model, the researchers designed the policy analysis runs and undertook different scenario analysis over a time span of 50 years. Scenario analysis included studying the effect of elements such as institutions for collaboration (IFCs) on cooperation; effect of broker efficiency and success stories on trust building; and effect of trust on learning.
The tourism industry is considered a very important factor that contributes to the economic development Egypt. The industry has shown growth in the recent years in the number of tourist arrivals to reach a maximum of 6 million in 2003. It could not be denied that government efforts contributed to the growth but nevertheless the devaluation of the pound had a significant influence on the number of visitors. The performance of the industry might look fine in general. But, this is if compared to previous performance only. However, if an in-depth look is taken it is realized that the Egyptian tourism is performing far below capacity. This paper aims at explaining the way to improve the performance of the Egyptian tourism industry using a system dynamics methodology. This will be done by defining the main factors affecting the industry, then explaining how the whole system works and finally proposing a new modified model and required course of action.
Dwindling government resources and demands for increased accountability have challenged nonprofit organizations to meet their primary missions while also creating efficient and effective back-office accounting and information systems. Even though many nonprofits say that accounting and information support systems are mission-critical, they tend to staff these systems weakly and to be less efficient than they could be. The present paper uses a system dynamics model to show how the Limits to Growth and Shifting the Burden systems archetypes help explain this situation. The model runs show that the exercise of leadership is the underlying issuenonprofit managers must challenge organizational cultures and mindsets that act as limiting factors, causing the nonprofits to avoid implementing fundamental solutions to their problems. The paper discusses several action recommendations.
In order to determine whether model testing is as useful as suggested by modeling experts, the full battery of model tests recommended by Forrester, Senge, Sterman, and others was applied retrospectively to a complex previously-published system dynamics model. The time required to carry out each type of test was captured, and the benefits that resulted from applying each test was determined subjectively. The resulting benefit to cost ratios are reported. These ratios suggest that rather than focusing primarily on sensitivity testing, modelers should consider other types of model tests such as extreme condition tests and family member tests. The study also finds that all of the different kinds of tests were either moderately useful or very useful--fully supporting the recommendations of the experts. An interesting diagram called a "tornado diagram" is used to portray the results of the sensitivity testing.
In this poster, authors explain a System Dynamics model developed for measuring efficiency of the Small Aircraft Transportation System (SATS) that NASA has been developing to enhance intercity travelers' mobility in the country. The model is comprehensive in the sense that it includes multi-modes such as automobile, commercial airlines and rail. It also considers different types of decision makers such as travelers, airlines, Federal Aviation Administration (FAA) and Federal Rail Administration (FRA) that dynamically interact with each other based on its own interest. The model allows users to change several critical but uncertain parameters such as the price for SATS trip, airports for SATS operations, etc. This feature enables users to do "what-if" type of study. Technically, the model is developed as a stand-alone tool with a Graphical User Interface that encloses all computational procedures written in MALTALB. Socio-economic data and computational results are represented at a county level using the Geographical Information System (GIS).
Modelling of technology adoption has tended to be based on individual product diffusion, although traditional models have been extended to incorporate replacement, competition, generations of substitution and other managerial variables such as pricing. A question is: how can these models be broadened to represent service industry applications and generalised or upscaled to model the phenomenon of General Purpose Technologies? GPTs have the properties of pervasiveness and complementary technologies. GPTs suffer from long development delays or start-up problems involving the co-ordination problems of complementary bandwagon behaviour. System dynamics modelling is proposed as an effective industry-level modelling approach to link standard expert judgement market forecasting used in industry and theoretical analysis used by economists in order to provide robust technology management policies. This paper represents an overview of the work-in-progress research themes and a modelling agenda.
The automotive industry is considered as one of the main drivers of todays global economy. The industry spans across the globe, with nearly each country trying to develop the industry and its supply chain within its boundaries. This paper presents a Business Dynamics model that maps the Egyptian Automotive industry, which started as a public industry and then transformed to a market driven private industry. The Egyptian automotive industry focuses on the local Egyptian market, with no current plan for exporting to the global market. Such focus provides the Egyptian automotive industries with challenges that impede its growth. The Business Dynamics model presented in the paper presents an explanation of the current status of the Egyptian Automotive industry. The model is then used to provide insights for the current status of the industry, as well as testing several policy options for stimulating the industrys growth.
An Adaptive Expectations Approach to the Mechanisms of Transmission Model of the Central Bank of Colombia
Fernando Arenas Pontificia Universidad Javeriana
Franz Hamann Banco de la República
ABSTRACT
Looking for the potential applications of system dynamics in macroeconomic modeling at the Central Bank of Colombia, the Mechanisms of Transmission Model (MTM) was recast in a system dynamics model. The forward-looking function of the model that, in the case of the MTM is a rational expectations based function, was approached by means of the TREND function. This document describes the system dynamics model and shows comparative impulse-response results between the models, when PULSE and STEP shocks are applied to inflation target, monetary policy, food supply, nominal depreciation rate, and risk premium.
Faced with new challenges in managing the cyclical and volatile business environment, management at a Commodity Plastic (COM-P) Company agreed to apply System Dynamics (SD) to support strategy development. A SD model of COM-P industry was built by adapting the Pulp and Paper Model. The structure of COM-P Index Price creation was mapped and added to the generic model. The following were investigated: a) The effect of current delays in adjusting prices on phantom demand, on capacity utilization and shipment rates; b) The phenomenon of Phantom demand or pre-buying when customers perceive that prices may be about to go up was modeled; c) By applying the model, the amount of margin lost or gained by the industry due to the price protection terms in the contracts was estimated; d) The risk in the top ten long term contracts under different supply and demand conditions and oil prices in order to support the sales organization with their negotiations; e) The model was applied to get guidance on capital investment timing and to assess the effect of different oil prices and supply & demand scenarios on the profitability of new investments. In many cases the results were counter-intuitive.
In this paper, we present a novel project management model that incorporates several features yet to be actively addressed in the literature and focuses on earned value management. The model utilizes the basic structures employed in building project dynamics models. The effects of time-varying project team size, of training and communication overload, and of change management are incorporated into our model. With the help of our model and a hypothetical software technology project, we demonstrate how our system dynamics model can contribute beyond basic project tools like MS Project, in generating the earned value management indicators required by project managers under different scenarios and starting assumptions. Results are consistent with well-known behavior of projects in that the later the changes arrive, the longer is the delay in completing the projects. These phenomena are propagated through the earned value measures to see the actual effects upon schedule and cost performance indices. The study also focuses on the use of earned value measures as well as critical chain concepts to understand how these separately impact project duration and cost.
This paper takes a system dynamics perspective of the contemporary trend of Offshoring Knowledge Worker jobs from USA to gain a better and deeper understanding of the results and implications of the trend, its impact on the jobs and workforce dynamics. The results not only support the viewpoint of economists that offshoring is beneficial to the economy, but also highlight another impending phenomena just round the corner, namely the slow rate of growth of workforce. Net U.S. workforce growth is slowing because seventy-one million baby boomers are beginning to retire. In this context, model outputs suggest that offshoring is postponing the undesirable state of U.S. jobs outstripping the U.S. workforce by nearly five years. Thereby, policy-makers have longer to find effective solutions to tackle the impending shortage of workforce in decades to follow. The model suggests that offshoring could not have come at a better time for the US economy.
Society membership has grown by over 40% from 1999, but the representation of women has remained flat at 12%. Thus, in July 2004 the Policy Council unanimously approved the formation of a committee to work on tracking and improving the diversity of the System Dynamics Society. Last October, a pilot diversity survey was included in the annual membership renewals. In the course of developing the survey, members raised important questions about how diversity should be defined for the System Dynamics Society. More importantly, the initial results suggested potential solutions. Both issues raised questions that need to be discussed. How should diversity be defined with respect to the System Dynamics Society? How does diversity affect participation at conferences and in the society? What are some possible solutions? Please join us in this roundtable discussion on diversity in the System Dynamics Society.
The Climate Stewardship Act, a global warming mitigation policy calling for a cap-and-trade program, was reintroduced in the United States Senate this year. The Energy Information Administration analyzed the implications of the bill and found that under such a policy renewable energy will increase, with the strongest response coming from biomass energy. Dedicated energy crops are one source of biomass that is expected to contribute significantly to the future biomass energy supply. This paper describes a system dynamics model of the carbon impacts from a dedicated energy crop. The work relies on another carbon accounting model, GORCAM, which uses spreadsheet modeling to investigate various land management regimes. We were able to reproduce the GORCAM results for a 20-year harvest rotation; we then simulated several different harvesting intervals to gain insight into the carbon impacts of these rotations. Our results show that a shorter harvest rotation will remove more carbon from the atmosphere if the biomass is used to replace a fossil-fuel burning power plant compared with no-harvest or longer harvest scenarios. These results agree with previous work that found long-term benefits were greater for scenarios where trees were planted for energy generation rather than specifically for carbon sequestration.
Previous system dynamics work models the tipping of a series of product development projects into fire-fighting mode in which rework overwhelms progress. Similar dynamics also threaten the performance of individual development projects. The current work extends previous tipping point dynamics research to single projects and demonstrates how a simple, common feed back structure can cause complex tipping point dynamics, trap projects in deteriorating modes of behavior, and cause projects to fail. Basic tipping point dynamics in single projects are described, analyzed, and demonstrated with the model. Researchers recommend dynamic resource allocation policies to improve project performance threatened by tipping point dynamics. This existing work and the potential robustness of adaptive policies suggest that dynamic resource allocation policies can protect projects tipping point-based failure. But this hypothesis has not been tested for specific policies. We test several strategies for managing projects near tipping points, including dynamic resource allocation. The effectiveness of dynamic resource allocation as protection against project failure are modeled and described. Implications for project management practice and future research opportunities are discussed.
By 2011 Switzerland aims to liberalise the milk market which will result in market changes in the basic conditions for agriculture. The impacts of the liberalisation are investigated with a composite model obtained by combining an optimisation model for the agricultural sector and a dynamic simulation model for the milk and meat market. The calculations with the composite model indicate that milk price depends strongly on the phasing out of market support, while the abolition of milk quotas in 2009 is less decisive. An introduction of a dairy cow premium leads to a higher milk production, especially with abolished milk quotas. In this case the European milk price level represents the lower limit for the milk price in Switzerland. Compared to the milk market, with falling quantities meat prices are likely to exhibit a stable development.
There is a critical need to develop land planning processes that can build the
capacities of local communities to address stewardship and sustainability at both the individual and collective/landscape scales. Social learning has been advocated as a process by which to build the capacity of local communities to address these issues. This paper outlines a social learning process currently being conducted to collectively develop a common mental model (or schema) of local landscape change among private forest landowners of Morgan County, Tennessee. By seeking a shared schema of landscape change landowners will elucidate and engage hidden assumptions that guide their land use decisions. This learning process is expected to increase community capacity by giving landowners a common understanding from which to make and/or support more sustainable land use decisions. The effectiveness of the social learning process is evaluated using individual cognitive mapping in a pre/post test quasi-experimental research design.
As New Year rolls in, many of us take on challenge of personal change. Many set goals to lose weight; do more exercises; watch less television; do more studying; do less partying; or to shed a habit such as smoking. For several years in our Quality Management course students were asked to work on a term-long personal continuous improvement projects. The students were briefly introduced to basic concepts of causal loop diagrams and were encouraged to use them to clarify their theories regarding their own progress or lack of it. The basic premise is that the result students obtain and the dynamics they experience are built into the structure of their worldview and they learn if they can communicate and influence their worldview. This paper uses systems thinking lens to discuss the improvement framework and the experience reported by students. Majority of students did not make the progress toward their goals as much as they would have preferred. The student generated diagrams to explain their theories were either too simple or overly complicated, awkward and partially flawed. However, it can be claimed that the process of using the tool to clarify their thinking itself was worthwhile. After reviewing their narratives and the diagrams, several archetypes were consistently noted.
The Advanced Fuel Cycle Initiative is developing a system dynamics model as part of their broad systems analysis of future nuclear energy in the United States. The model will be used to analyze and compare various proposed technology deployment scenarios. The model will also give a better understanding of the linkages between the various components of the nuclear fuel cycle that includes uranium resources, reactor number and mix, nuclear fuel type and waste management. Each of these components is tightly connected to the nuclear fuel cycle but usually analyzed in isolation of the other parts. This model will attempt to bridge these components into a single model for analysis. This work is part of a multi-national laboratory effort between Argonne National Laboratory, Idaho National Laboratory and United States Department of Energy. This paper summarizes the basics of the system dynamics model and looks at some results from the model.
What aspects of basic system dynamics are covered by the traditional school math curriculum? The Booth Sweeney and Sterman (2000) bathtub tasks and the Jensen and Brehmer (2003) rabbits-and-foxes task were dissected into aspects. Questionnaires with tasks tapping into the identified aspects were administered to first-semester university students with a math-intensive high school background. Performance were as expected and conformed to the results of previous studies with these tasks. These results encourage further effort to devise additional tasks covering more basic aspects identified, and refining the existing tasks. Equipped with a well-design battery of tasks, it would in all likelihood be informative to test it with different participant groups, such as undergraduate, as well as graduate, students in math, engineering, and system dynamics.
Housing for the poor remains a major policy problem in U.S. cities. Jay Forresters 1969 Urban Model predicted that increasing the availability of low income housing exacerbates the city deterioration. Poverty and homelessness are on the rise in this country. Families, often single parents with children, and the elderly are two of the largest groups affected. Subsidized housing is one way to fight homelessness. This years budget proposal has President Bush slashing funding to the department of Housing and Urban Development, including many programs that help supply housing to the poor. I plan to investigate various low income housing policies to determine how and why they would or would not work.
This article intends to conceptualize the problem of low interagency collaboration in implementing local social welfare policies into a system dynamics model. This conceptualized model is introduced to explore the possible factors facilitating and hindering interagency collaboration between Department of Social Welfare (DSW) of city government and Social Affairs Section (SAS) of district office in both Taipei City and Kaohsiung City of Taiwan. The model combines insights from policy implementation theory, qualitative data from interviews with DSW and SAS staffs, and system dynamics literatures. Although this model is not yet formulated, several insights have been obtained. This study finds that the institutional design has made cooperation between two agencies difficult. Such an interagency relationship is reluctant compliance rather than partnership. This article argues that a homogeneous realization of the cooperation pattern among implementation participants is necessary for building effective interagency relationships in policy implementation.
Compared with many preventable epidemics, how did a relatively insignificant disease like SARS develop into an international scare? This article describes the application of system dynamics to understand the SARS epidemic in Beijing. The powersim model simulates the structure of transmission dynamics and factors that impact the epidemic. Here, the probable impacts of changes in the system delays, including delays to quarantine, delays of disease diagnose, and the authorities epidemic information transmitting delays, are discussed. The model aims to present detailed understanding of delayed feedback mechanisms inherent to eliminate the misperceptions of basic dynamics, and then to design high leverage policies for preventing SARS. The article concludes that an open and transparent public information system is the most powerful weapon to curb SARS panics. The governments prompt epidemic information feedback system and relatively instant strong quarantine policies have substantial impacts on containing SARS epidemic.
Market and technology changes have brought about new characteristics of product development. One of the most significant changes from the traditional to the new paradigm is the change from sequential and collocated development processes to concurrent and distributed processes. Although some researchers have built models of development processes and product development performance, most of these studies are about collocated development projects where the coordination between tasks is not explicitly studied. Consequently, there is a need to model the relationships between development processes and project cycle time in the distributed context, with special attention to the coordination between tasks. With the support of a design company, we developed and validated the model with data from mobile phone projects.
Business simulations are composed of a (SD-)model which represents the complexity and dynamics of business structures and concepts. Within a simulation the participants can make decisions to control the modeled enterprise. A business simulation can make the interdependencies between the different activities within an enterprise transparent to the participants. From an economical perspective the success within a business simulation can be measured by a set of specific core variables.
From an educational perspective the structure of the cognitive system which is responsible for the economical success is relevant. A subsequent aspect refers to the possibilities to support the elaboration of the mental model during the activities within a business simulation. Furthermore in the context of web-based learning environments there is the issue how to foster self-regulated learning processes.
A prerequisite for an effective feedback which supports learning is a continuous diagnosis of the problem solving process, in particular the diagnosis of the information-retrieval and decision-making processes.
This paper describes the basic concept of the diagnostics within a prototype of a web-based business simulation called solarSYDUS. Besides the SD-model this simulation contains a component for recording information-retrieval and decision-making processes during the simulation for analyzing problem solving behavior.
Both system dynamics (SD) and discrete-event simulation (DES) are used to help understand and explain puzzling real world dynamics. But what are the similarities and differences between these two approaches and which should be used in a specific circumstance? These are questions few have ventured to answer. In this research the two approaches are compared by developing an SD and DES model of the same problem situation, a fishery. An SD expert and a DES expert separately develop a model of the fishery through a number of evolutionary steps. At each step differences in the representation and interpretation of the models are identified. Overall it is apparent that while SD illuminates 'deterministic complexity', DES illuminates 'constrained randomness'. Either or both may be important in understanding and explaining puzzling dynamics. SD and DES should therefore be seen not as opposing modelling approaches, but as complementary.
I develop a System Dynamics simulation model to examine the conditions under which large firms adapt to sharp changes in the competitive landscape. This paper capitalizes on, and aims to extend the intra-organizational ecological theory of organizational adaptation, which reconciles the workings of selection and adaptation forces in the process of organizational change. The paper interprets the narrative theory from the feedback perspective, translates it into a system dynamics model, and simulates the model under different assumptions of firm characteristics. More specifically, I experimentally reproduce in vitro a firms adaptation process to closely scrutinize how the morphology of firms resource allocation mechanisms interacts with stocks of available resources to mould an unfolding adaptation path. The simulation experiments unveil the role of timing, path-dependence and self-reinforcing mechanisms in decision-making.
The activated sludge treatment system for treating municipal wastewater presents an interesting application of system dynamics modeling. This paper presents such a modeling approach to the strategy formulation of the treatment system in order to economically control effluent quality. First, factorial designs are carried out on the simulation results to identify factors that significantly affect effluent quality. Thereafter, open-loop control (both constant and time-varying), output feedback control, and output-integrated feedback control strategies have been applied. Statistical tests of significance indicate that the strategy of output feedback control has the maximum potential, in both summer and winter, to achieve the dual objectives of maintaining effluent quality within acceptable limits and minimizing aerator energy.
The growing reliance on technological infrastructures has made organizations increasingly vulnerable to threats from erstwhile trusted employees and clients. Recent research indicates that successful defense from these threats depends on both technical and behavioral solutions. In this paper, we report on our work to identify seemingly reasonable organizational actions that may inadvertently lead to increased risk exposure. We also consider how potential internal attackers may be encouraged or discouraged by monitoring the organizational responses to probes of the firms security systems.
Two interwoven work products are presented: A case study that presents a particular type of insider threat long-term fraud and a simulation model that supports the case, the underlying dynamic theory, and examination of policy options. The case and model combine to produce a motivating and useful exercise that illustrates the problems of insider cyber-threats. This material has been used in teaching of insider threat issues with satisfactory results.
The December 4th, 2004 issue of The Economist had a 3-page Special Report
entitled The future of the dollar which cites the following from the Roubini-Setser (R-S) paper ; if the real trade-weighted value of the dollar remains close to its average in 1990-2003 ( slightly above current levels ) and there is no change in domestic policy, Americas current-account deficit would rise to 8% of GDP in 2008 and its net debt would increase to over 50% of GDP. This projection came from one of three scenario simulations ( their Baseline scenario ) based on a model described in the R-S paper. The R-S papers model, when replicated in Vensim, contains one positive feedback loop to represent how interest on debt leads to exponential debt growth but excludes much of the of the papers rich mental models which imply much more endogenous model structure than that used in the papers scenario simulation model. This SD conference paper recreates the R-S scenario simulation model and then presents another version which tries to include more endogenous model structure based on the R-S papers own rich discussion and mental models.
System dynamics concepts and methods are rarely referenced in the field of coastal resources management, even though coastal systems and decision-making are dynamically complex and the SD literature offers a rich and relevant body of theory, practice and models. Recent work in the theory of ecosystem management calls for the use of modeling and is becoming of increasing interest to coastal managers. A simple stock and flow model of coastal management is presented that is drawn from the legislative design of one of the oldest and certainly successful U.S. state programs, Rhode Islands Coastal Resources Management Program. This model exhibits several dynamic behaviors intuitively familiar to coastal managers. Model runs are presented using parameters taken from the Rhode Island case, including runs with and without the coastal management program in place. These results are compared with performance data from the 35 year Rhode Island coastal programs permit data base, and closely reproduce long term trends in key variables. The forward-looking scenarios are utilized to suggest approaches for the state program as it enters the new century. Implications for newly emerging coastal programs in developing countries are also drawn.
Telecommunications in developing countries lack adequate planning and policies, so their telephone densities show the lowest values worldwide. The failure in considering the complexity of the regional telecommunication system in developing policies and technological strategies has increased the telecom gap between other regions and this particular sector of the world. We used a system dynamics modeling approach as a methodology that deals with the complexity of the system in order to evaluate existing value added services and access technologies in telecommunications that could accelerate the dispersion of regional telephone services in developing countries. The role of wireless systems, which have a low deployment delay, was found to be crucial in the growth of urban and rural telecom infrastructure in developing countries. The value added services were found to have a positive impact by increasing the financial resources of the telecom company and the number of urban telephone lines.
System Dynamics does an excellent peer review of articles. This year, eeing the reviewers' comments and suggestions online was especially welcomed feedback. The additional benefit of initiating a dialog with the reviewers was a bonus.
However, there is always room for improvement. Your thoughts and ideas are welcomed to help us continue to improve our peer review process. Please consider joining a dialog at our Boston meeting to further explore the peer review process. Your presence and ideas are welcome.
Some thoughts for consideration are as follows: 1. Need the peer review process start and end so abruptly? Should the reviewer and writer continue the dialog post the society meeting if mutually agreed? Should a reviewer mentor this process? 2. Are there submissions for review that could be enhanced and offered to other venues for publication, and thus improve recognition for the System Dynamics Society? Should a reviewer mentor this process? 3. Could a practitioners develop a business methodology from theory presented in a peer reviewed paper, or could academics proved theoretical underpinnings for a practical approach presented? Should a reviewer facilitate this process?
If you are interested in discussing these peer review ideas or others, please consider joining an informal meeting!
The success of the Polio Eradication Initiative promises to bring the world the benefits of sustained improvements in quality of life (i.e., cases of paralysis and deaths avoided) and saved costs from cessation of vaccination. Obtaining these benefits requires that policy makers manage both the transition from the current massive use of oral polio vaccine (OPV) to a world without OPV and the risks of potential future reintroductions of polioviruses. In 2001, we began a case study on retrospective polio risk management to demonstrate the importance of using a dynamic disease model to correctly estimate the cost-effectiveness of vaccines. Discussions with the CDC about the case study led to an opportunity for us to develop a large model to support the prospective decision making process. This paper tells the story of our journey, emphasizing insights about the requirements for analysts to create tools that really help high-level decision makers.
This paper explores Dynamic Unity between Theory U and System Dynamics
as a way to generally illuminate the "blind spot" and create the setting for
presencing. By describing the blind spot as a System Dynamics process with a
model and behavior, it is hoped that Dynamic Unity will facilitate recognition of the blind spot and produce better understanding of social actions. Dynamic unity between Theory U and System Dynamics will facilitate: identification of common assumptions, modeling of the current problem, producing repeatable results through simulation, and discovery of new insights from simulation results. The instance of presencing will remain the domain of social science, neuroscience and others to explain. Using System Dynamics to project policies through simulation, identify emerging phenomenon, accelerate the learning process, decrease dependence on past experience, change mental models into
new insightful beliefs will take us to the threshold of Theory U presencing.
Organizations are becoming more aware about the importance of economic, financial and risk management aspects of information system security. As a result, the balance between preventive and corrective security strategies must be studied. We understand Preventive Security as the ability of organizations to avoid the impact of an incident and Corrective Security as the ability of the firm to recover from the losses generated by an incident.
This paper presents a model to analyze the Preventive-Corrective security balance. The main objective of this model is to simulate and analyze the impact that two security behaviors (security investments and strategy) can have one a given enterprise environment. After running 54 simulations, some interesting security behaviors called our attention.
Traditional global models address important global problems using highly aggregated measures, but it may be argued that the world is strongly non-homogeneous at least at some fundamental level: developing (South) nations and developed (North) nations may have very different, asymmetric problems, goals and structures. This study aims to investigate these two distinct groups of economies in a context of global sustainability. We identified population, economic growth, welfare gap, energy supply and pollution as key issues and analyzed them in a systems perspective. A dynamic feedback model, which discriminates these two groups of nations, is constructed based on WORLD-3 model in order to study the dynamics of key parameters related to these issues for the period 1975-2050. Simulation experiments reveal that population characteristics of South and current mode of economic activity, which is extensively dependent on non-renewable energy resources constitute serious obstacles for the sustainability of the system. Hence, stabilizing the population growth in South, transition to alternative energy resources and investment support to South for this transition are vital for closing the welfare gap between blocks and sustaining the global system.
Effects-based Operations (EBO) is becoming the centerpiece of Western military thinking. The concept is based on influencing the behavior of adversary complex adaptive systems (such as terrorist networks) in dynamic environments. Mission analysis is the foundation of campaign planning. This paper suggests a process to improve how campaign planners identify effects necessary to yield a desired endstate during EBO mission analysis. The process is based on using a modified version of Soft Systems Methodology to structure the problem by providing planners a high-level initial understanding of the dynamic complexity associated with 4th Generation Warfare threats. Planners use this understanding to identify and diagnose specific adversary behavior inconsistent with the directed endstate. Potential system changes to modify problematic behavior are next identified and debated. Finally, the changes are converted into effects that serve as the input into more detailed planning efforts. The process uses group learning and shared understanding as a hedge against the ambiguity associated with 21st Century military planning.
In this paper, the typical anchor (expected value of the outflow or expected loss) used in the most popular decision rule of the stock management modeling, the Anchoring and Adjustment Rule is studied for structures including a decaying stock. A new anchor (equilibrium value of loss) is proposed and compared with the expected loss formulation. We demonstrate that equilibrium value of loss formulation helps bringing the control stock to its desired level more rapidly. In addition, we show that managing a decaying stock in a stable way is difficult when the supply line is discrete. Standard stock adjustment and supply line adjustment terms anchored around expected loss can yield highly unstable oscillations. Counter-intuitively, for some cases, ignoring the supply line adjustment term may completely eliminate unwanted oscillations. If equilibrium value of loss is selected as the anchor and when the decay time (life time) is small enough, management of the stock can even be done by ignoring all the adjustment terms.
This is a second paper of a series of macroeconomic modeling
that tries to model macroeconomic dynamics such as the determination of GDP (Gross
Domestic Product) and money supply from system dynamics perspective.
Following the first paper on the money supply and creation of deposits,
this second paper tries to model dynamic determination processes of
GDP, interest rate and price level on the same basis of the principle of
accounting system dynamics developed by the author.
For this purpose, a simple Keynesian multiplier model is constructed
as a base model to examine a dynamic determination process of GDP.
It is then expanded to incorporate the interest rate, whose
introduction enables the analysis of aggregate demand equilibria
as well as transactions of savings and deposits, and
government debt and securities.
Finally, a flexible price is introduced to adjust an interplay between
aggregate demand equilibrium and full capacity output level.
A somewhat surprise result of business cycle is observed from
the analysis.
Modelling knowledge in SD organisational interventions may become a puzzling task because of difficulties in achieving a common shared view among business key-actors about the impact of Intellectual Capital (IC) investments on future company performance.
Such difficulties are not only related to the intangible nature of IC, but also to the indirect role of knowledge in affecting performance drivers and outcomes. This phenomenon is particularly relevant in service businesses, where intangibles account for a high percentage of total assets.
In order to overcome such problems, a conceptual framework has been developed by the authors to build a generic SD model aimed to support business decision makers in IC planning, with particular regard to service firms.
Such model has provided the basis for developing two ILEs focused on a telecom mobile service provider and an insurance company. The first application was related to an education project, while the second one was linked to a consulting assignment.
The use of a conceptual framework as a basis to build an ILE has proved to be a successful strategy in order to better communicate business key-actors the potential of SD in modelling and assessing IC policies.
Main key-issues underlying model development and the ILEs application are discussed in the paper, and most significant outcomes from simulations are commented.
The complexity and characteristics of the pharmaceutical firm present an intriguing context for underlying information management issues during clinical trials for new drug development. This paper reports on the evaluation and performance of MIS for information management in clinical trials in new drug development. The main objective of the study is to examine the economic and business impacts of automating that process, to enhance our understanding of informational stakes involved, using a system dynamics (SD) model. The SD method is enriched in this paper with other conceptual frameworks such as Alters (2001) Work Centered Analysis (WCA) and the Balanced Scorecard (BSC) (Kaplan and Norton, 2001). Results of the simulations for alternative sensitivity analyses on errors rates in data transmissions, that is, on alternative error-rate specifications, do not necessarily influence project delay, but rather work intensity. A discussion details the usefulness of enriching the SD modeling process with alternative conceptual frameworks in the problem definition in such complex settings.
The phenomenon of dwarf or stunted small and micro firms (in Italian nanismo aziendale) is recognised in the small business literature. These are firms that have survived through many years, maybe many generations, providing their owners with acceptable returns and lifestyles, but have remained very small. They might therefore represent potential lost opportunities for owners and, given the importance of the SME sector, local employment and economies. A system dynamics model replicating the basic no-growth, cyclical behaviour attributed to stunted SMEs is firstly analysed. Alternative policies arising from different entrepreneurial views and aimed at changing behaviour to one of stability or steady growth, are then tested and analysed. In this relatively simple form, the model does link behaviours to system structure and could support individual entrepreneurs in understanding the reasons for dwarfism in their firm and the potential for unleashing growth. It could also form the basis for a more detailed model to support the identification and evaluation of strategic alternatives in individual firms.
The negligent upkeep of many abandoned industrial sites (brownfields) throughout the twentieth century has had grave impacts on the urban landscape of American and European cities. In recent years, brownfield redevelopment has come to be viewed as a strategy for sustainable land use and urban revitalization. This study assesses the feasibility of the construction of a dynamic simulation model of urban brownfield redevelopment. Literature surrounding brownfield redevelopment is reviewed and used to construct a dynamic hypothesis of brownfield redevelopment as it relates to site liability, economic viability, and availability of redevelopment funding. Finally, an initial system dynamics model of the brownfield redevelopment process is constructed. This quantitative analysis is performed using the 2003 US Conference of Mayors brownfield survey, which serves as a dataset on brownfield distribution and average site size. We conclude with suggestions for the extension of the model to capture spatial feedback in order to assess redevelopment effects on the surrounding matrix of urban land-uses.
Access to energy, particularly through clean and modern technology, can make substantial contributions to promote rural development in the poor areas of developing countries. However, the relationship between energy, poverty alleviation and sustainable development is still unclear. Additionally, while improving access to energy is required for development, the way that this has been supplied has not always warranted a sustained livelihood in rural areas.
With the purpose of gaining a better understanding of the relation between energy and development, the current research Renewable Energy for Sustainable Livelihoods-RESURL, aims to assess and measure the factors that contribute or hinder the development of efficient, viable and appropriate access to energy provision in remote rural areas by using a multidisciplinary and participative perspective.
A System Dynamics model is constructed to evaluate the contribution of energy to rural livelihoods. SD modeling facilitates understanding feedback and control processes, as well as delays in decision making. Simulations show how isolated communities in conditions of poverty could attain a satisfactory level of human, social, physical and financial development by making sustainable use of their natural resources through energy technologies. The study draws on the sustainable livelihoods approach as a framework for assessing community assets and capacities.
System Dynamics simulation models of organizational business system of management of material (raw-materials, orders, money, labor, personnel, population, capital equipment: tools, units and factories e.t.c.) and informational flows in productive company will be presented in this paper. Organizational business-production system is simulated by effective scientific discipline System Dynamic and realized by Dynamo (PD4) and PowerSim program packages, also.
Due to complexity and extensiveness of business management of organizational business process or production-distribution system global simulation models of companies are presented on the modular way, i.e. with seven relevant sub systems:
1. Production-inventory sub system;
2. Credits sub system;
3. Debits sub system;
4. Sub system of productive capacities;
5. Sub system of Cash-Flow;
6. Gross income-net income sub system;
7. Sub system of demand for organization products,
which are common structural characteristic in every productive business organization. These sub system are modelled according to its specific quality.
The paper is conceived as follows: sub systems of business production organization, entire model of productive organization system and its simulation, conclusion and used references.
Multiple Objective Optimisation (MOO) is a proven technique that can be employed by systems dynamicists as they seek to optimise parameters in simulation models. MOO employs genetic algorithms and Pareto-based ranking to find non-dominating sets of optimal solutions to problems that have more than one objective. The aim of this workshop is to: (1) Explain the multiple objective optimisation approach; (2) Show, though an interactive simulation model, how it can be applied to a popular system dynamics model (a two actor version of the beer game); (3) To explore with participants answers to a number of questions, including: (a) What kind of benefits can MOO bring over traditional optimisation approaches? (b) How do modellers decide on the appropriate payoff function? (c) How do decision makers approach the dilemmas of trading off two objectives? All participants will have access to a special purpose simulation application (Windows based) that will allow them to run simulations and optimisations on the two-agent beer game.
The rapid spread of HIV/AIDS is a global crisis one that is particularly devastating to the economies of nations where the disease is most prevalent. Booz Allen Hamilton, in conjunction with the Global Business Coalition on HIV/AIDS (GBC) and the Confederation of Indian Industry (CII), developed an innovative approach for The AIDS Epidemic in India: A Strategic Simulation. Their approach captures the complex interdependencies that drive the HIV/AIDS epidemic and its economic consequences. At the core of this strategic simulation is an analytic framework that leverages epidemiological and economic System Dynamics modeling, partnerships with leading academic centers, and simulation-driven gaming.
This paper offers insights into the dynamics of carbon emissions in metropolitan regions. These
emerge from a system dynamics model of urban land-atmospheric interactions. The paper provides
contextual background, outlines modeling methodology, inventories insights and documents policy
implications. Section One considers climate change, worldwide urbanization, urban CO2 emissions and
urban land-use/transportation dynamics. Section Two identifies the study area, the modeling tool, its
dynamic organizing principle, its structure and the scenarios used to explore system behavior. Section
Three considers urban CO2 emissions and the mitigating effects of land-use and transportation
policies. It compares these to practicable improvements in fossil fuel combustion efficiencies and finds
that modifying urban form compare favorably to improving combustion efficiencies. Section Four
asserts that, given todays global-scale inter-metropolitan economic competition, todays urban
challenge will be largely met by cooperation at the metro-regional scale to tame the dynamics of
carbon-based metropoli.
This paper presents insights from an interactive seminar game using system dynamics to help the U.S. Latin American policy community explore issues associated with the process of paramilitary demobilization in Colombia. The game used system dynamics to represent the strategic interactions of the key actors in the Colombian paramilitary peace process, including their pursuit of both competing and complimentary goals. The process leveraged the gaming mode and rapid causal tracing capabilities of the Vensim system dynamics software to generate an interactive event in which players generated a rich set of strategic interactions in a hands-on learning environment. The success of the event suggests a promising new approach for leveraging the power of systems thinking and system dynamics software in policymaking and learning environments.
Health care is a complex dynamic setting suitable for system dynamics analyses. The method has the potential to be an important quality improvement tool in the near future. However, it will be necessary to develop the models beyond the pure production model focus on the clinical care process from a patent perspective and in doing so it is inevitable that variables such as health, communication and care planning are involved. Consequently, useful and valid models for modern health care must involve variables that are unfairly designated as intangible. The present paper describes an exploratory system dynamics model of the care planning process. It draws on a range of studies and theories about the process. The paper discusses how it could be possible to incorporate and validate variables alongside the more traditional way.
A panel of business and industry practitioners will describe how they have and hope to use system dynamics in their organizations. They will discuss which issues they have addressed with system dynamics and also share their perspective on what have been their biggest challenges and most significant successes.
Given that systems thinking is a useful methodology in organization learning, the main purpose of this study was to identify and evaluate how and in what ways we could use systems thinking on curriculum/instruction planning in schools. In this study, we used ethnographic methods of observation and in-depth interviewing to gather information. The study took place in six public elementary schools. The evaluation was focused on the following questions: (a) What happened when the model were used?, (b) What did participants think about using the model in planning and instruction? and (d) In what ways did the use of the model influenced professional development? Evaluation data was collected from three primary sources: (a) principals and administrators interview (b) teachers curriculum, lesson plans, interview, and responses to an attitude survey; and (c) researchers observational notes. Conclusions made based on the results of this study. First, systems thinking can increase the quality of administrator-teacher and teacher-teacher interaction, teachers curriculum/instruction planning, continuous assessment of curriculum/instruction, and immediate and formative feedback. Secondly, it can also decrease overall time required on task of curriculum/instruction designing in the long run. Consequently, it promises curriculum/instruction design with more accountable quality.
Skilled human movement is apparently easily produced and highly coordinated despite the high number of degrees of freedom controlled during its execution. Here, we examine the learning of a whole body movement over practice from three levels of analysis: 1) elemental, 2) subsystem, and 3) macroscopic order parameter, with respect to the role of constraints in motor skill acquisition. With practice, the body segments were re-organized to achieve the 3 sub-tasks, namely: 1) a medio-lateral forcing torque, 2) a vertical downward force and 3) an anterior-posterior equilibrating torque. The output complexities of the two subsystems, the forcing (medio-lateral) and equilibrating (anterior-posterior) motions of the center of mass changed in a compensatory manner, increasing or maintaining the stability of the overt behavior. This pattern of findings supports the ideas of dynamical approaches to motor learning and holds interesting parallels to tenets of the Theory of Constraints (Goldratt, 1990) for system (re)organization.
Mental health service systems are inherently complex, both in their detail and dynamics. System dynamics offers great potential to help policy makers, administrators, and researchers make better decisions about service system changes. However, efforts have been constrained by not being able to construct numerical reference modes without making strong assumptions about the structure of the case flows. This paper presents a novel approach to generating numerical reference modes from administrative databases that is based on computation theory. The method is validated with simulated datasets, and its feasibility and substantive significance demonstrated in an analysis of a merged child welfare database containing 10,250 children and adolescents.
System dynamics has always held the potential to synthesize and advance theories in social science. Increasingly, social scientists and policy makers are recognizing the importance of complexity and turning to methods like system dynamics, geographic information systems, social network analysis, and agent based modeling. All of these approaches draw on some underlying modeling mathematical framework. This research reports on a method for integrating system dynamics with social network analysis and geographic information systems. The method is then applied to the specific problem of improving city residents perceptions of crime and safety in a model based on existing social theory.
Problems of strategic human resource management, such as proposed reductions in prospective retirement benefits under an American pension plan, present complex challenges. Typically, a firm pursues strategic objectives such as Cost control through changes in focal policies and programs affecting its workforce. At such times a firm should be wary of long-term consequences among individual employees, since the firm, its programs, and its employees, comprise a three-level feedback system. Unintended consequences at the micro-organizational level may lead in turn to additional unpleasant surprises at the program or firm levels. This paper discusses the development of a simulation model combining the approaches of agent based and system dynamics disciplines in addressing a clients multi-level concerns. It articulates differences between the agent based and system dynamics modeling disciplines in the service of this task, and discusses issues of implementation and praxis which have governed our design at points of tangency between these approaches in such a hybrid model.
A generic representation of the telecommunications infrastructure in a metropolitan area designed to be integrated into a much larger simulation of the seventeen key infrastructures[1] has been implemented in Vensim[2]. This Critical Infrastructure Protection Decision Support System (CIP/DSS) is designed to provide insights for the Department of Homeland Security (DHS) in making decisions about investments related to critical infrastructure protection[3]. Although a system dynamics representation was well suited to representing the dynamics and interdependencies in this complex system of systems, it was recognized early on that collaborations with key infrastructure domain experts and organizations would be important to the success of the project. This paper summarizes the results of a collaborative effort with Bell Laboratories, Lucent Technologies to leverage a detailed switched network simulation to inform the telecommunications system dynamics model in CIP/DSS.
A demonstration and discussion of the process and benefits of building a 'high level' strategic simulation tool for a UK Health Authority seeking to build an evidence base to support strategic investment decisions across the primary and secondary health care system. The presentation will discuss the key drivers for change and performance expectations in the UK health system. It will describe the rationale behind the Health Authority's request and the means of delivering on this. Particular emphasis will be placed on the learning process that took place during model construction, the key links to strategic decision making, evidence of the benefits to the Authority during and since the simulator development and the way in which the simulator tool has been placed locally to inform and influence performance monitoring. The workshop will demonstrate the model itself as well as outputs generated by at least one 'future scenarios' workshop held locally.
In its Preface, The 9/11 Commission Report states: We learned that the institutions charted with protecting national security did not understand how grave this threat can be, and did not adjust their policies, plans, and practices to deter or defeat it (2004: xvi). Given current realities and uncertainties better preparedness can be achieved by identifying, controlling and managing the elusive linkages and situational factors that impact state stability and fuel state decay and destruction and hence create new threats to the nations security. We propose to focus on the use of system dynamics modeling techniques to help understand, measure and model the complex dynamics shaping state stability, initially for two regions. We will specifically consider the impacts of unanticipated disruptions, such as a tsunami and its aftermath, on the dynamics of the two regions. For each region, we will develop a country model, along with an analysis of conditions and casual links between predicted futures plus corresponding mitigated options. The presentation will include an update on the status of this project.
A system dynamics model was developed to help hospitals assess their ability to handle surges of demand during various types of disasters. The model represents all major flows of patients through a hospital and indicates how specific responses to a surge may ameliorate bottlenecks and their potentially harmful effects on patients. The model was calibrated to represent a specific hospital in West Virginia and was tested under three quite different surge scenarios: a bus crash, a chemical plant leak, and a SARS outbreak. Under the difficult conditions of the SARS scenario, avoidable deaths of patients awaiting emergency care could be effectively reduced by adding reserve nursing staff not in the emergency department, as might be expected, but in the overloaded inpatient wards. The model can help hospital planners better anticipate how patient flows may be affected by disasters, and identify best practices for maximizing the hospitals surge capacity under such conditions.
In the article we address recurring causes of failures in starting up a new company. In particular, we explore flaws in entrepreneurs mental model when dealing with feedback and delays in building up stocks of assets. The work that we are presenting is in progress but scored the following targets. First, under a theoretical point of view, we laid down borders to define a theoretical territory where the strong connections can be observed that entwine literatures on start-up, on the resource-based view of the firm and system dynamics. Second, we created an experimental laboratory to test individuals recurring mistakes when dealing with a start-up.
Further developments of this work are in the direction of setting an experimental protocol to conduct empirical research on a sample of players.
This paper integrates the resource-based view (RBV) with concepts from the literature on managerial cognition and organizational slack to show how shifts in resource constraints can lead to shifts in firm performance and even industry structure over time. Using a process-based method, we show that a shift in constraints of resources, under the moderating impact of heterogeneous mental models and resource structure, shift resource allocations. In turn, this creates and sustains resource heterogeneity, leading to differential performance. Previously developed propositions are tested using simulation in two strategic business units from a leading player in the UK insurance industry. The conclusion highlights implications for research methods, strategy theory and managerial practice.
The government regulation policy, in the mobile phone services market which is characterized by its 'asymmetric' stance, has been provoked debates on many issues amid pros and cons. For that, many previous studies have endeavored to point out the limitations of asymmetric regulations and suggested the improving measure tools, most of previous studies showed common shortcomings. This study aimed at evaluating the government regulation policies over mobile phone market, by analyzing in advance the efficacy of any potential regulation policies, and by estimating the timeliness of the enforcement. To achieve this objective, a simulation model based on the system dynamics methodology was developed to test the impact of governmental regulation policies being enforced under various scenarios of the mix of government policies.
This paper examines a new approach to understanding corporate transparency (or, in reverse, opacity) system, which is used to recognize interconnections existing among firm-related agents how they sanction and monitor each others behaviors, ultimately tuning the activity of a firm in a systematic context. Firm-related agents include internal stakeholders (especially board of directors) and external stakeholders. While former approach individually can only examine corporate transparency/opacity in a one-sided way, we attempted to take on a more holistic and dynamic view using system dynamics. With our new integrative model, we propose a systematic solution to corporate transparency/opacity problems and provide a new means of studying corporate value more transparently than ever before, thus offering a better chance of corporate sustainability and also enhancing corporate value.
The growth of unsolicited commercial email (UCE) imposes increasing costs on organizations and causes considerable aggravation on the part of email recipients. A thriving anti-spam industry addresses some of the frustration. This paper contributes to our understanding of the UCE phenomenon by drawing on scholarly work in areas of marketing and resource ownership and use. Adapting the tragedy of the commons to the email context, we identify a causal structure that drives the direct e-marketing industry. Computer simulations indicate that although filtering may be an effective method to curb UCE arriving at individual inboxes, it is likely to increase the aggregate volume, thereby boosting overall costs. The analysis advances understanding of the digital commons, the economics of UCE, and has practical implications for the direct e-marketing industry.