This paper has two goals: The first is to present a computerized version of Beer Game originally developed as a board game to teach managers the principles of supply chain management. The multiplayer interactive simulation game we develop is 100 percent faithful to the original game, so that experimental results from the physical and computerized environments can be safely compared. The simulation model used to represent the game also illustrates some subtleties that a model builder must be careful about while simulating a discrete and physical game. Secondly, the game was used as an experimental platform and experiments were done in order to analyze game medium (computer vs. board), demand pattern and learning effects on performances of players. One striking result is the fact that subjects who played the board game scored significantly better than those who played the computerized version under the same conditions.
This paper analyzes the design and functionality of the nuclear reactor, and the human failures on on-line operations, which had led to the accident at the Chernobyl power plant, In April 26, 1986. The paper finds that the combination of the Chernobyl-reactor characteristics and freak infringements of safety rules did cause the accident. The former aspect is due to the process of graphite-moderated uranium fission, which tends to increase in reactivity in the case of a malfunction or faulty operation. The latter is caused by the effect that infringements which did not cause accidents in the past lead to more violation of safety rules in the future. Transferred to organizational improvement programs, a corporation has to redesign its structure in the vein that failures cannot spread quickly (i.e. loosely coupled system elements), and to generate an atmosphere in order to encourage and utilize the full benefits of employees participation.
In this paper, we develop a comprehensive eigenvalue analysis for linear models, in order to identify the leverage points in models. The analysis is comprehensive as we develop a closed-form analytic function relating the behavior of any state variable to all parameters in the model. Moreover, by decomposing the behavior into several modes of behavior each characterized by an eigenvalue and an eigenvector it is possible to develop a closed-form analytic function relating a certain mode of behavior to all parameters in the model. In the first section of this paper, we explain the mathematical foundation of eigenvalue analysis. In the second section we identify the origin of the modes of behavior. This enables us to pinpoint the leverage points of the model. Finally, in the last section, for illustration purpose, we apply the method to a linearized version of the classical market growth model. The analysis of this linearized model enables us to explain the model behavior as a superposition of a number of behavior modes, and set the stage for analyzing the original, non-linear version of the model.
Neoclassical economics seems to have rejected the concept of limits to growth by assuming that the market and the technological advances invoked by it will make it possible to tap new resources and create substitution of production factors, while it has outright excluded limitations invoked by the political, psychological and social institutions in its analysis. Classical economics, other the other hand, appears to have been cognizant of a multitude of limitations to growth, including demographic, environmental, and social. This paper reconstructs classical economic growth models using system dynamics method and demonstrates their behavior using computer simulation. A case is made for taking a pluralistic view of the growth process and reincorporating a multitude of institutions driving it into our models to arrive at realistic policy options.
This paper defines a hypothetical Law (HL) of capital accumulation that includes a growth rate of supply of labour force as a non-linear function of capital intensity. The main state variables are the labour productivity, relative wage, employment ratio, and capital-output ratio. An application of an extended Kalman filtering to the US macroeconomic data 19692002 exhibits long wave as a viable pattern generated by capital accumulation.
Applying the Structural Control Theory the present paper reveals closed loop control over a fractional growth rate of total profit and its advantages in comparison with an open loop control. The supposed control law of primary distribution of income for the macroeconomic oscillatory system is derived as a substantial modification of the initial HL.
It is shown that the US state and business leadership has been pursuing pro-growth stabilization policy with a focus on primary income distribution at least since 2001.
India is emerging as one of the biggest markets for offshore services. Business process outsourcing (BPO) is the delegation of one or more information technology (IT) intensive business processes to an external provider that, in turn, owns, administrates and manages the selected processes based upon defined and measurable performance metrics. Offshore outsourcing is an umbrella term covering a range of IT and business services delivered to companies in developed countries by personnel based in developing countries. Though Indian outsourcing industry is growing, the attrition rate is also rising in this sector. So is the backlash against outsourcing. In order to survive and grow in this scenario, Indian firms must ensure that their services are not only cost-effective but also qualitatively superior. The present study probes into these issues. The study aims to explore the structure of Indian outsourcing industry through the methodology of system dynamics. A system dynamics model has been developed, validated and simulated over time to understand the trends that characterize this industrial segment. The implications of the results of the study are discussed.
This paper is aimed at formalizing an objective method to analyze and assess operational risk in supply chains. The proposed approach consists of exploiting the analogy among logistic networks and dynamical systems; in particular, it proposes to identify the risky events characterizing a generic supply chain by studying its attributed Petri net and the corresponding coverability graph, whereas it suggests to assess the risky events effects by building the logistic network simulation model, experimenting on it and applying ANOVA to the experimental campaigns results. Finally, the method has been applied to a single-item, 3-stages supply chain to show how it can be practically used.
Firms need to act entrepreneurially to compete in today ultra-competitive business environment. This requires firms to actively search for and exploit opportunities to increase revenues or decrease costs in an uncertain environment. Within a firm, these activities are the functions of the entrepreneur or the entrepreneurial resources. In return for their services, these resources receive payments known as entrepreneurial rents. These rents are the result of subjective judgments and the activities that generate them are subject to imitation. Thus, entrepreneurial rents are both ex ante non-contractible and temporary. These characteristics make their measurement difficult for managers. This paper is an attempt to measure entrepreneurial rents using a system dynamics framework. System dynamics models are uniquely positioned to capture the dynamic complexities of these rents. In doing so, I present a SD model of a three-site hog production operation and compute the entrepreneurial rents generated from several arbitrage and innovation activities.
This paper focuses on the application of system dynamics in the integration of knowledge management (KM) and human resource management (HRM) with specific reference to the determination of the optimum setting of time-based policy parameters. The integration of KM and HRM is w.r.t. the engineering competence pool development and deployment. The feedback as well as feed-forward loops were used in the development of the control loops, which govern the simulation carried out in two distinct stages. In both the stages, the influence of the governing time-based policy parameters has been studied to investigate the critical parameters, which significantly influence the effectiveness of the system. The simulation results envisage the effect of the policy parameters, based on which implications are drawn for better policy evaluation and control. Even though the study has a national context, the procedure adopted in this research has the potential to be extended to the global level.
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.