This study investigates the market barriers in increasing the market share of Alternative Fuel Vehicles (AFVs) and possible policy options to overcome them by using a system dynamics model. In particular, this study first conceptualises the AFVs market model by aid of generic system archetypes suggested by Wolstenhome (2003, 2004). Among four generic system archetypes suggestd by Wolstenhome, the market structure of AFVs and conventional cars can be explained by relative achievement. Starting from the generic system archetype, this study extends the model to take account of various model assumptions. According to the AFVs market model of this study, if there is a significant network effect on vehicle operating costs, it is difficult to achieve the shift to AFV even in the long term without a policy intervention because the car market is locked in to the current structure. There are several possible policy options to break the locked in structure of car market, such as subsidy on vehicle price (capital cost), subsidy on fuel (operating cost) and niche management policy.
The paper presents a conceptual framework for modeling of dynamic systems with variable structure. A practical motivation comes from analysis of value networks complex systems of stand-alone business entities that bond together, more or less tightly, through exchange of goods, services, and money. The existence of bonds between certain businesses, and their strength, are determined by the relative performance of individual businesses in terms of a value they add along the network. The collection of effective bonds defines the structure of a network. As the performance of businesses changes over time, so does the network structure. Better performing nodes are more likely to get bonded, and nodes with stronger bonds are better positioned to further improve their performance. Having an operational model of the value network behavior, with the capability to predict the changes in the network configuration as a result of the changes in the individual node performance, is a crucial prerequisite for effective management of the network performance. We propose a stochastic model of the dynamic behavior of a value network, which combines probabilistic graphical modeling with stochastic extension of system dynamics to model a network configuration and individual node performance, respectively.
In academia, the two main measures of research performance are publications and citations. These two measures in a sense quantify the research success of scientists and academic units. Perception of these performance measures can create pressures on researchers and cause different behaviors in different conditions. The aim of this study is to examine the behaviors of researchers in response to the dynamics of publication and citation pressures. A model including faculty members in a department, their publications and citations has been constructed by using system dynamics methodology. An important factor that determines citations for a paper is the quality of the paper. Reputation of an academic unit is established as a result of citations that the unit receives over time. There is an important feedback loop so that the reputation in turn influences the citations the units will enjoy. A researcher, who has citation pressure on him, would be forced to produce higher quality papers for getting more citations. On the other hand, publication pressure would cause the researcher to produce lower-quality papers in higher numbers, in shorter times. The main decisions of researchers are thus modeled through allocation of researchers time in research activities and time devoted on each research. The results obtained agree with our dynamic hypothesis and qualitative information about the behavior of actual academic units.
In this paper we will introduce a system dynamic model that aims to identify the mechanisms how learning in innovation process converts to profit. This model is built on a single firm level from a strategic management approach. The model is built with modular structure that is in-line with different theoretical aspects that are covered with-in the simulation. In this research 3 main feedback loop groups are identified that offer different approaches in innovation process performance improvements for the manager. These options and their effects are evaluated with the help of the model and the initial data is presented in this paper.
In this study, it is aimed to investigate the business dynamics of a hypothetical record company. The recent declining trend in musical industry in many countries has brought up the issue of free sharing of musical content. A system dynamic approach was taken to imitate a setting where there are both legal and illegal ways of obtaining an album. Special attention was paid to the self-marketing effect of the musical content present in the market. The life cycle of a particular album that is assumed to have a high potential of being popular is simulated. Despite the outstanding self-marketing effect of the shared content, the record companys profits decrease following the decline in sales due to diversion of people to illegal ways of obtaining the album in the mid-phases of the life cycle. Scenario analyses showed that the companys benefit from free sharing depends on how the increasing illegal content affects the market. If the diverting effect of illegal content is low, the demand generated is realized as legal sales to a satisfactory extent and thus the company actually profits.
A system dynamics model is constructed to study the development of tolerance and dependence to phenobarbital in the long-term. Phenobarbital is a regularly used sedative drug. Its target is the brain. As a side effect, phenobarbital enhances the synthesis of metabolic enzymes in the liver and thus increases its own metabolism rate. Furthermore, in regular use, the brain adapts to the presence of the drug and its sensitivity decreases with time. These factors decrease drug effectiveness and urge the user to increase the dose during continuous use. A feedback loop results as the increased dose affects enzyme and neuroadaptation dynamics. Because adaptive changes persist even after drug intake stops, upon abrupt discontinuation of the drug, the patient experiences rebound effects such as hyperexcitability and seizures. The model incorporates enzyme induction and neuroadaptation dynamics and serves as an experimental platform to study the behavior of the drug user as he/she develops tolerance. Additionally, it is possible to evaluate dosing regimens in order to facilitate gradual withdrawal from the drug so that rebound effects are avoided. Our simulation experiments revealed that whether dependence is partial or complete, the duration of a successful regimen is more than half the duration of regular use.
The airline industry is characterized by strong dynamic developments. Concentrating on the smallest possible market for an airline company to develop, in this paper we want to demonstrate the effects of entry and exit on city pairs, i.e. the routes between two airports, by presenting a System Dynamics model to simulate and analyze strategic movements on airline markets. By varying the preconditions, e.g. distinct business models and initial entry setups and calibrated with the data of German Antitrust law suit between Lufthansa and Germania, we will show the various consequences of different market scenarios, comparing the results with hypotheses from a literature review. Additionally, we will show the effectiveness of a policy of predatory pricing against market entry under different conditions.
This paper reports how systems perspective and simulation modeling method can help healthcare administrators and practitioners broaden their boundary perception and create shared understanding of their system. The case used in this study involves a community mental healthcare program in New York State where Systems Thinking and System Dynamics are used to uncover misalignment in the system boundary perceived by the different levels of healthcare administrators. The difference in the perceived system boundary can have a critical impact on the success of a healthcare program if the perception drives planning and assessment of the program implementation. More specifically, this study looks at how the perceived system boundary influences assessment of workload and capacity issues in the program. The study finds that without a systems perspective, unintended consequences of disparate boundary perception can persist without being recognized at the system level, as the local effortsor solutions that are not necessarily globally optimalare arranged to alleviate the unwanted pressures in the system.
Multi-tier, multi-channel supply chains are now common in many industries including aviation. Such supply chains provide high-value aviation parts to the Government, and many have been plagued recently by shortages. A system dynamics model has been developed of an aviation supply chain producing a major sub-assembly composed of eight components, each component coming from a three tier supply chain. These components are used in new production as well as overhaul of damaged parts. It was found that in the face of varying demands substantial bullwhip was produced and that it became especially pronounced at the lower levels of the supply chain. Moreover, it was shown that the government ordering process is extremely sensitive to common data errors such as the production lead-time and that production constraints, not included in the ordering algorithms, created deep and prolonged shortages. On going research is developing improvements to the formulation of the ordering process and developing optimum inventory strategies for creating push-pull boundaries in the manufacturing process.