Foreign direct investment has a strong impact on the level of employment and its structure in companies. The article presents the structure of factors regulating and adjusting the employment scale to real productivity needs. The presentation is based on one of the best examples of foreign direct investment in Poland - GlaxoSmithKline Pharmaceuticals, Joint Stock company. The privatization process is like a mirror of destabilized economy. The correction of employment structure inside the company reflects the overall employment fluctuation in economy and even the structural unemployment classification. The model built on the GSK example, describes the 8 years long process of employment adjustment and can be recognized as a benchmark for the employment transition in foreign companies in Poland.
Our objective is to examine the consequences of soy rust to the U.S. agriculture in the next 2-5 years. In 2000, the U.S. harvested approximately 2.8 billion bushels of soybeans from almost 73 million acres of cropland, accounting for more than 50 percent of the world's production. The crop generated $12.5 billion dollars, $6.66 billion in exports. Soy rust established itself in the south last November and is expected to disseminate and deposit in the crops during this years planting season. The extent of outbreaks depends upon climatic conditions. Early detection is crucial since soy rust is deadly to the soy plant within 48 hours. Monitoring systems will warn farmers of the presence of the spores and farmers are instructed on how to identify and treat it. There is uncertainty regarding the sufficient and timely availability of fungicide. In addition to historical data, we incorporate observations of on going planting and harvesting. Parameter ranges in the model are narrowed as more information becomes available and existing uncertainties dissipate. The impact of soy rust is analyzed in aggregate, looking at overall production and market share contrasted against natural noise in the yields.
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.
This paper develops a hypothesis that the normal mode of operation for many organisations is well beyond their safe design capacity and that many health and social care organisations in the UK are in this position. This situation arises from having to cope with demand, irrespective of their supply capability.
The irony is that such organisations can appear to cope at the strategic level. This is because operational managers employ a variety of well-intended, informal, survival techniques to meet performance targets. However, such practices can perpetually mask the underlying reality and have serious unintended consequences .
Evidence for the hypothesis has emerged from a number of studies carried out using system dynamics to identify and promote systemic practice in local health communities in the UK. The rigour of quantitative simulation model construction has identified mismatches between how managers claim their organisations work and the observed data and behaviour. The discrepancies can only be explained by surfacing informal coping strategies. Indeed, the data itself becomes questionable as it reflects more the actions of managers than the true characteristics of patient pathways.
If proved wholly or even partially correct there are some important messages in the paper for Health and Social Care management, the meaning of data and for modelling.
Real-world policy analyses efforts indicate repeated behavioral patterns that inhibit systems approaches, such as the time and budget pressures, the trade-off of detail vs. high-level insights, and the tendency to dwell in the familiar rather than delve into the unrevealed. Examining mainstream (non System Dynamic) business and policy processes issues such as these seems critical to increasing the introduction of systems approaches. However, the perspective we as a community of modelers takes is critical to reinventing business and policy analyses. To the extent the barriers are seen as circumstances of the modeling environments there is little leverage towards resolution; if we can see the impediments as being a result of our behavior as analysts, the nature of the barriers change and there is much more opportunity for improvement. The paper examines a nonSystem Dynamics policy analysis for the electric utility industry from both these points of view.
The two most important fundamental needs of towns and cities are a sufficient supply of adequate drinking water and the removal of polluted water. History has shown that if these needs cannot be met, cities rapidly become uninhabitable. New Zealand's current water systems were designed and built in the 19th century and have not been improved much since. Generally, infrastructure has been built on the assumptions of abundant water resources and the unlimited ability to treat and dispose of polluted waters. Especially in Auckland, New Zealand's largest city and one of the most rapidly urbanising cities in the world, there is increasing tension due to rapid urban growth and the costs associated with replacing old water infrastructure and extending it to new urbanised areas. The challenges of managing urban water systems in New Zealand today call for an application of system dynamics. Our proposed research is based on the hypothesis that systems thinking and modelling methodology can be applied to the question of urban development in the Auckland region and is a valid instrument to identify policies that effectively foster the sustainable development of urban structures, in particular urban water infrastructure. This paper discusses the current situation and challenges, and outlines the proposed research.
The objective of this workshop is to provide participants an introduction to agent-based modeling of
crowd dynamics. A summary of pedestrian socio-psychological egress behavior will be presented
together with an outline of existing modeling techniques and software tools. A detailed description of a
simple crowd model that can be implemented using MATLAB will be presented. Participants will learn
how to develop a simple yet fully functional simulation and visualization of crowd dynamics. Skeleton
Matlab scripts will be available for download from www.sanithw.org starting July 1st, 2005 but will also
be available via PC/MAC compatible USB drives during the workshop.
In a constantly changing environment, a Computer Security Incident Response Team (CSIRT) has to evolve over time in order to sustain or improve its effectiveness. The main task of a CSIRT is to help victims mitigate the effects of computer security incidents. A frequently identified problem for a CSIRT is that they are overworked, understaffed and under funded. In this paper, we present a conceptual model of such conditions based on a case study. The model is a first attempt to understand the main factors influencing a CSIRTs ability to handle computer security incidents effectively, and to identify ways to improve their overall effectiveness. Based on theory from process improvement and information from the case study, we have identified that short-term pressure from a growing incident workload prevents any attempts for developing more response capability long-term. Fundamental solutions to solve this problem will typically involve a worse-before-better trade-off for management.
Information revolutions change the world by taping into a positive feedback loop. If we can identify the loops we can understand where they might be going and what their limits might be. We need to know the difference between a short-term trend and a long term dynamic. We need to know where this information might be pushing us so we can know if it is where we want to go.
Trying to look at a category, as broad as information revolutions, to identify patterns requires an approach that will give a broad but well specified picture a way to understand the positive feedback loops that create the growth and also to understand the countervailing loops that come into play in various ways. I believe that causal loop diagrams can give us a clearer picture of this kind of broad, messy problem
This paper describes transform approaches to control Vendor-Managed Inventory (VMI). The effect of different modelling techniques and their significance is examined. Modelling was achieved with the Simulink package using the equations developed by Disney and Towill for a VMI system model. Analysis of several types of delay representation were compared to illustrate how the results depend on their formulation. The effect of using a discrete model is to deepen the stock-out and increase the required order rate. Analysis of the stability of the different models are discussed and evaluated. It is shown that the continuous model with an exponential delay is always stable and with a fixed delay can be made stable. The requirement for the system is also computed for a discrete model with exponential delay. Reduced inventory stock-out and a smaller WIP peak are achieved with different order smoothing function. This has special significance for e-manufacture.
An interactive learning environment (ILE) appropriate for intermediate macroeconomics students has
been simplified for students in introductory college and high school courses. Without changing the
underlying model or the simulation options, the simplified instructional approach relies on feedback
loop diagramming more than stock-and-flow diagramming. Interactive Vensim causal loop diagrams
are embedded in a STELLA interface, using slide show and video software. In addition, students appear
to learn more as model-users if they engage in preliminary model-building activities using simple
word-and-arrow diagrams.
Diffusion models of radical technologies are often based on an epidemic structure developed on the Bass principles of generic external and internal communications. However, in most cases such processes involve more complex communication and decision mechanisms. The diffusion processes should account for interdependences with other innovations and also the substitution mechanisms with regard to the technology in place. Substitution must be understood with a much broader scope than the analytical view of the Fisher and Pry model. As many diffusion authors have acknowledged (but partially excluded from their models), diffusion is a social process with innovation moving through interpersonal networks. We propose a model that accounts for the dynamics of social factors in technological substitution. Based on the System Dynamics methodology, our model disaggregates most of the communication structure and individuals characteristics that are implicitly embedded in traditional diffusion models. Our discussion starts with the characteristics of radical technological innovations. We then proceed with the theoretical basis of our social aggregation approach by presenting Kellys personal constructs system theory, outlines of social psychology, decision making under uncertainty, and the interdependences between innovations characteristics and human behavior. We also make an attempt at considering both sides (consumers adoption / competitors imitation) of a substitutive diffusion. Brice Dattée's research is funded by the National Institute of Technology Management in Ireland.
This work captures and analyzes the fundamental dynamics of innovative industries with a System Dynamics model. We selectively reviewed the innovation literature, identified the dynamics to be modelled, formulated a conceptual model of these dynamics, and then developed the initial simulation model. By design the conceptual model is simple and generic. It is intended to apply to a broad range of products and services assembled and process-based, complex and simple, physical and digital, business and consumer, early stage and mature, 19th century and 21st century. That is what we mean by the fundamental dynamics of innovative industries. In many variations and combinations they can explain the evolution of most markets. The initial simulation model was developed from the conceptual model. It represents products based on two generations of technology. At this stage the simulation model does not represent a specific market or industry. It is quantified with hypothetical inputs, parameters, and cause/effect relationships. The simulation model recreates well-documented reference modes of market evolution. We currently are building the information base which will enable the initial model to be applied to the photography and display markets.
The, for economists well-known Goodwin model was one of the first models which tried to combine cyclical behavior and economic growth. The basis for this is the predator-prey model a basic structure for every System Dynamicists. The economic literature about the Goodwin model is enormous, but so far, it was mostly concentrate on the mathematical behavior or on some extensions that could be implemented. In addition, there are only two papers from R. Solow and D. Harvie about an econometrical verification of the model and none from a System Dynamics perspective. This article provides therefore two System Dynamics models of Goodwins theory and tests the enhanced one on the German economic situation and on the data provide by Harvie 2000. Additionally there are some suggested modifications of the Goodwin model, tested from different authors, which reveal surprising outcomes for the understanding of Goodwins theory.
In this paper, I will present relatively simple system dynamics models which capture some of the insights of a key critic of the U.S. policy for defending the country, Stephen Flynn. Flynn is especially concerned with the over-reaction to the attacks of September 11, 2001. He warns of the dangers of shutting down legitimate commerce and investing in overseas offensive measures as a knee-jerk reaction to the attacks. It is not that he is advocating a lax approach to security. Rather he is advocating a measured look at the implications of a draconian defense policy which may cause much more damage to our societal infrastructures than the attacks that triggered it. He also presents recommended solutions.
In the modern era, the advances in information technology have been dramatically shaping the ways people live as well as the ways organizations manage their businesses in their professional business domains. Implementing various kinds of information systems, such as Decision Support Systems, has been recognized as one of the most crucial tasks for organizations in order to continue to be competitive or even to survive. Although considerable effort has been devoted to improving the performance of information system implementations, organizations are still constantly suffering from the failures of information system implementations. In this study an extensive framework that depicts the context of information system implementation is developed. A system dynamics approach is used to investigate the dynamic nature of information system implementations. By using the proposed system dynamics model, we contend, executives and information system professionals of organizations can gain comprehensive insights into organizational behaviors and substantial policy-making implications regarding information system implementations.
The pattern of one-shot growth is most seen in software industry. The purpose of this paper is to understand the growth dynamics of a software house and to facilitate the software house to manage its growth. This paper models a major domestic ERP software house in Taiwan that is experiencing the one-shot growth process. Business type-level packages and high quality service is the companys secrets for its success. With a good reputation for high quality systems and services, the companys growth strategy is to expand the market it serves by developing new kinds of packages for more business types. However, how to balance the human resources requirements of R&D and ERP is rather difficult when long delays exist everywhere in a software house. With the system dynamics model built, this paper identifies the archetype of limits to growth hidden inside the software house and illustrates how the problem is worsened by the companys intuitive reactions.
A discussion, with panelists representing different perspectives, facilitated to encourage full participation by everyone present. The field of inquiry dubbed environmental dynamics (ED) includes a broad range of interests, many with differing views of the ecological world. These include, for example, purely ecological studies involving the interactions of organisms and their natural environment, technical studies of the effects of human activities on the environment and different methods employed to limit or counteract those effects, big picture analysis of the human-influenced world and the direction it is headed, plus many others. Popular topics often associated with ED include: environmental regulation, the ecocosm dilemma, the oil crisis, global warming, environmental limits [to growth], etc. The roundtable will explore the relationships among these different topics, emphasizing the role of system dynamics. The goals will be to establish common ground, to create useful distinctions, and to help organize the ED endeavor.
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.
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.
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.
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.
This study reports of an experimental economics analysis of the new proposed Swedish-Norwegian tradable green certificate market (TGC). The green certificate market is a financial instrument to stimulate renewables within the context of liberalized, transnational electricity markets (a kind of market-oriented subsidy scheme). Green certificates are financial assets issued to green producers that can be traded freely. Previous system dynamics studies showed that trading- and investment behaviour were critical factors in analyzing the market dynamics. As a follow-up, this experimental economics study conducted 14 laboratory experiments with about 10 to 20 students per session. A particular feature is that participants handle both short-term trading and long-term investments, which allow us to analyze the interplay between these types of decisions without imposing behavioural assumptions on the model. The laboratory experiment shows that the market is likely to crash, due to the long time delays of supply side adjustment. The study provided new insights concerning agents trading and investment strategies, in particular the performance of various market designs. The mix of trading strategies employed in response to the experiments, are difficult to understand and capture in an SD model.
The paper describes a system dynamics model developed for dynamic analysis of human resource for the agricultural sector in different sources of employment, viz., government, private (including corporate), academic, financial institutes, non-governmental organizations, self employment, and others in India. Besides projecting an overall scenario for continuation of current agricultural education policy and trends, the paper analyses simulated results from the model for the current curriculum with 80:20 proportion of technical to soft skills. The analysis shows that in the coming years the private sector will emerge as a major employer for the graduates of agriculture and allied sciences.
Following several calls for participation in environmental policy, an increasing attention is being dedicated to the development of deliberative platforms for the sustainable governance of our global village. In this paper, we start by adding perspective on the role of participatory modeling within a strong participatory vision for sustainability. We then explore how system dynamics and ecological economics worldviews interlock in promoting participatory modeling approaches to environmental decision-making. Focusing on the synergies between group model-building and mediated modeling, some lessons from two participatory interventions developed in Portugal are extracted. The evaluation of the case studies indicates positive outcomes at the individual and group level, with respect to learning, reaction, commitment, communication and consensus. The outcomes at the organizational level are still more limited. Further research is suggested on the comparison and complementarity between participatory modeling and other deliberative methods.
The planning of investments for the ports of the North Atlantic range (Hamburg, Rotterdam, Antwerp, Le Havre, Goia Tauro) face a strong growth of the market (double over the next 10 years), large economies of scale, congestion in ports and hinterland connections, and strong competition for parts of the European hinterland. Several investment strategies can be followed. The present strategy has resulted in overcapacity. Modeling allows to trace the dynamic impacts from alternative strategies.
Health care in the Netherlands presents a unique mix of governmental and private responsibilities. Costs for long-term care, expensive treatments and uninsurable care for the complete Dutch population are covered by the Exceptional Medical Expenses Act (AWBZ), administered by 32 regional offices. Every health care provider operates under a contract with the regional administration office. Once contracted services are available, insurers are obliged to reimburse providers for these services even if they are not used by clients. In the coming years part of the Dutch health care will be deregulated and several types of care will be offered under market conditions. Whereas costs for care capacity are at present reimbursed by the government, this situation might change in the future. Regional care offices in general have little insight into long-term developments in supply and demand for health care. This paper describes a system dynamics study on demand and supply for a specific type of nursing care, dementia. The model shows how feedback between waiting lists and volume of different types of demand for care, leads to fluctuations in required capacity. The feared overshoot in long term nursing capacity did not materialize in model runs under a range of environmental scenarios.
Modelling the worldwide nuclear reactor park including all supply chain details, i.e. the nuclear fuel cycle, demands for an integrated nuclear energy system model which also includes feedback loops representing physical feedbacks within the system as well as, and most prominently, socio-political feedbacks in the decision-making on the various available deployment pathways for nuclear energy.
Argonne National Laboratory (ANL) started in 2000 with the development of such integrated nuclear energy system models, i.e. DYMOND and more recently DANESS. These models are based on system dynamics modelling used in various industry sectors and allowing to model the full mass-flow chain of time-varying mixes of nuclear reactor plants and associated fuel cycle options. Several other sub-models may then be coupled to the mass-flow kernel to calculate heat loads, economics, life cycle inventory, and several other parameters and feedback decision-making loops important in the assessment of nuclear energy futures.
This paper concerns a project of limited scope to study why innovations in health care often fail to be adopted and how this may be improved. The project consisted of two workshops with participants from different areas of health care. The objective was to identify factors influencing adoption of innovations, relating the factors to each other, and looking for measures to stimulate the adoption of innovations. During the first workshop, possible effects of innovations and prerequisites for adopting innovations were identified and prioritised. This resulted in draft causal loop diagrams. During the second workshop, refined diagrams were used to identify measures for stimulating the adoption of innovations. In addition, a game incorporating the results of the workshops was developed. The main causal mechanisms were translated into the game which can be played by people who work in health care to improve their understanding of some of the dynamics involved.
System dynamics models are being used by more and more businesses to train employees from new hires to veteran managers, communicate strategic change within the company, share mental models between stakeholders and align business perspectives between business units. Advances in computer technologies help this process to a great extent by enabling users to interact with models more effectively and efficiently. This workshop will introduce you to ExTrain(r), one such technology that facilitates the use of simulation models in strategy communication and management training.
The ExTrain(r) is a web-based application platform that serves as a virtual practice field for managers to exercise decision-making power under various business conditions in a risk-free environment. ExTrain(r) applications can be used in individual online simulation sessions or within a facilitated environment with interaction from trainers. Each application is also supported with a facilitation tool that allows trainers to monitor simulation progress, user performance and intervene if necessary.
In this workshop, we will introduce you to the ExTrain(r) platform and its new features from a user perspective. You will also get a chance to learn more about the integration and maintenance of simulation models within ExTrain(r) environment. There will also be a hands-on demonstration of the system where participants will take part in a sample war-game application. Participants will be divided into four teams, each of which will take control of a virtual technology company. Starting on level ground, you will compete for revenue growth while maximizing profit through various business decisions. Facilitation will be provided to help you understand the key business dynamics and formulate your strategy.
This paper describes the process of a combined system dynamics modeling and scenario planning approach. It empirically investigates how envisioning and probing system dynamic modeling has the potential to raise effectiveness of scenario planning for organizational learning and improved decision making. The approach is illustrated by means of a case study that was used to explore the influence of social trends on dynamic interactions between transport behavior and spatial development in Switzerland. In this case study a system dynamics model was developed that served as a communication tool for strategy development and for enhancing goal alignment between different policy sectors at the national level. A qualitative content analysis illustrates how comments from participants of group modeling workshops can be opened up as empirical indicators of stimuli for improved learning. Additionally, it gives empirical evidence that the chosen approach contributes to mitigating four drivers of unexpected decision failure as discriminated by Chermack (2004a): bounded rationality, the tendency to consider only exogenous variables, stickiness and friction of information and knowledge, and mental model with decision premises.