Methodologies are built upon fundamental assumptions (called paradigms) which are rarely questioned within a respective community. When applying a methodology without being aware of these assumptions we risk accepting wrong conclusions (abduction risk). Therefore this paper proposes that the development of valuable simulation models strongly depends on the sound alignment of purpose, object and methodology. In order to align these dimensions and in the light of upcoming tools capable of multi-paradigm-modeling a clear conception of the available methodologies, their differences and suitability becomes a necessity. In the context of modeling and simulating of socio-technical systems three methodologies seem reasonable. Next to System Dynamics (SD) these are Agent-based (AB) and Discrete-Event (DE) modeling and simulations approaches. The following paper analyzes and compares all three approaches in order develop an initial concept idea for an orientation framework which aligns purpose, object characteristics and methodology for choosing and/or combining suitable modeling approaches.
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 product development process to overlapped and distributed process. This paper explores the appropriate overlapping policy in distributed product development based on a system dynamics model. The major contribution of this study is to suggest that it is very dangerous for a company to develop innovative products with distributed teams. Not only coordination time but also wrong overlapping policy makes delay unavoidable for the distributed and innovative projects. The simulation results are empirically proven by our experience in the consumer electronics companies and previous literature.
Competitive bidding system, bearing the advantages of simplicity and fairness, is expected to encourage economic benefits through the free market competition mechanism. However, as the characteristics of construction industry are different from those of other industries, many issues such as abnormal low-bids and poor project quality have been derived from the competitive bidding system, and hinder the development of the construction market. By using System Dynamics this research developed a contractors pricing model consisting of two intended economic feedback structures with competitive bidding philosophy and an unexpected adverse one, namely Opportunistic Bidding feedback structure. The results suggest that the ideal competitive bidding system is only effective when contractors opportunistic bidding behaviors are restrained. The emphasis of governments policies should be placed on inhibiting the Opportunistic Bidding, as it is the leverage point to improve the efficiency of public construction market.
It is well known that the long distance telecom service providers suffered heavy damage in the aftermath of the telecom bubble. What is it about the telecom industry that drove participants to fall victim of the bubble dynamics despite historical understanding of the destructive consequences of past bubbles? Was the bubble simply the result of a perfect storm, or was it an inevitable reflection of industry dynamics? To what degree did the bubble arise from irrational exuberance and misperception of demand growth, and to what degree did it simply reflect pathological emergent behavior arising from individually rational actors? The answer to such questions are interesting historically, but may also help provide insights for regulators and enterprises. The objective of the analysis described in this paper is firstly to use system dynamics to characterize the telecom bubble phenomena, secondly to analyze and understand the mechanism of the telecom bubble, and thirdly to utilize the model to make preliminary recommendations that may help to lower the risk of similar phenomena in the future. The model provided insight into the impact of factors such as technological advancement, misinformation concerning demand growth, competition among network service providers, and the impact of demand forecasting techniques.
In this article we present results of different experiments with the
Beer Distribution Game focusing on decision patterns and the effect of
varying information on the decision quality. Besides the known decision
patterns such as the ordering heuristic presented by Sterman (1989)
and the well investigated bullwhip effect in the Beer Distribution Game,
we make two other observations. First, as an extension to available
studies, we suggest that decision behavior could be explained by policies
that change over time. Second, a non linear relationship between
the anchor and the decision is presented and contrasted to the linear
heuristic. Information seems to play an important role in the decision
making process, but the effect is not necessarily positive. This
could be explained by coordination problems. Overall, the complexity
of the Beer Distribution Game raises various questions about the
experimental design.
This paper examines the role of system dynamics in corporate strategic development. A framework for strategic development is introduced based on an analogy with feedback control. The strengths and limitations of the analogy are discussed. The basic framework is then extended to include strategic rehearsal as a virtual feedback process' at the corporate level to test and modify strategic initiatives before and during implementation. System dynamics is one effective way to provide such virtual feedback. An example is given based on a modelling project for a company in fast-moving consumer goods. The purpose of the project was to investigate the strategic implications of a new product launch in a highly competitive industry. There is a description of how the model was conceptualised with the management team and a review of simulations that were helpful in assessing the strategic initiative. The paper concludes with comments on the insights from the project.
The Swiss Chapter consists of researchers, educators, consultants, and practitioners in the corporate and public sectors. Approximately 110 people receive our e-mails and about twenty of them have paid our newly introduced membership fee so far. The number of participants in chapter meetings has been around ten ever since we first met in 2003 (although there are distinct oscillations). Additional activities involve enhancing academic and consulting competences as well as educational programs.
Chapter meetings are organized where we usually combine a presentation about System Dynamics in action with the discussion of organizational issues. With such a structure we try to maximize the benefits of our members. Our key conclusion so far is that there are quite some people in Switzerland who deal one way or another with System Dynamics. Everyone in this heterogeneous group is ultimately motivated to reach his or her individual SD related goals. The value added by the Chapter lies in the provision of networking, learning and exchange opportunities.
This article presents a System Dynamics model that determines the optimal level in which to invest in information security and wish to reflect delay which can happen between factors and analyze information security investment effect. We Look into how investment of information security can have an effect on information security while analyzing the causal factors in information secure industry. Finally, research feedback loop which decreases necessity of information secure when satisfaction is fully enough because of information security investment.
Keywords: information security (IS), investment of IS, side effect, optimum level of IS, System Dynamics.
This paper intends to fuel a thought about representing and extracting reasoning in System Dynamics (SD) models. A perspective on the flow of information as policies in the system and also flow of information as logical structure or reasoning of the model is discussed. It also discusses how influences in the model are implemented as rate equations and challenges the impossibility in deriving rate equations from the qualitative model. This paper raises concerns that the qualitative SD model normally describes the principle behaviour of the system in dual mode whether a growth or decline and omits the structure of reasoning in the model. Finally this paper argues that the logical structure of policies, if effectively represented at the formulation stage would open a channel for a revived and renewed process of developing SD models
Housing premises rent has been big socio-economic and political issue in the Czech Republic for a long time. The calculation model of maximum rent for square metre of a housing unit has been changed several times since the year 1994. It has not been assessed stable policy in this branch. As a consequence of this was expensive housing premises rent particularly in Prague. A new law concerning one-sided rent increase should bring a clearer concept. The law was authorized by parliament on 1/3/2006, will come into force by 1/10/2006 and will stand by 31/9/2012.
The purpose of the project has been to create a price trends dynamic model of housing premises rent in Czech Republic in this period. All study has been divided into two parts. First one of them includes price trends of rent analysis between the years 1994 and 2005. There are introduced approaches to rent calculations and its values in Prague for various flats categories including rent increases. The second part deals with a price trends dynamic model of housing premises rent according to new law noted in full paper. There is also described the calculation model.