Within the MIT System Dynamics National Model, the risk-free interest rate is determined jointly by the normal interest rate and by liquidity. The normal rate is the rate which agents believe would obtain under normal circumstances, in the absence of transitory pressures. The normal rate continually adjusts to new interest rate conditions. During times of deficient liquidity, agents will increase the risk-free rate above the normal rate. The converse also holds. The risk-free rate will continue to adjust until pressures in the system are relaxed. Estimation results support the national model theory of interest rate formation.
Although there are more than 3000 end uses of aluminium in the world and more than 300 in India, yet there are five sectors viz. power, consumer durables, transport, building consturction canning and packaging which account for more than 90% of aluminium consumption. To study the dynamics of demand of aluminium in these sectors, system dynamics model having various sectors viz. Population, economy, power, consumer durables, construction, packaging and canning, transport and aluminium consumption model has been simulated from 1970 to 2000 A.D. using dynamo.
A method is described and illustrated for explicit incorporation of and computation with ranges of initial conditions, functions, and parameter values in dynamic models using interval analysis. This approach is neither a statistical nor fuzzy set analysis but instead utilizes interval arithmetic which is particularly well suited for computerization. When a dynamic model is couched in interval analytic terms, ranges of all possible solutions are generated allowing not only an analysis of ranges of behavior modes but for sensitivity and stability analysis to be performed as a natural part of the model. Moreover, uncertainties such as specification, numerical method (e.g., numerical integration), and roundoff errors can also be analyzed in conjunction with or separate from the interval dynamic model.
Mid-volume, mid-variety operations characterize flexible manufacturing systems (FMS) or job-shops found in most factories. Profitability of FMS depends upon effective scheduling of material flow, machine use, staffing, and buffer capacities. Many systems adjust to changes in demand and equipment failure in the long term. In the short term, however, large changes may occur in inventories, staffing requirements, and machine utilization. In general, these large changes reduce production efficiency and profits. An approach is demonstrated for attenuating or eliminating changes or swings in a system when there occurs some abrupt change. Delays and delay parameters in the system model are adjusted, subject to practical constraints, to produce a smooth and rapid transition after the change. A simple econometric model is used for illustration. A symbolic and algebraic manipulation language is required to implement the approach.
Burnout is a problem associated with work in social service organizations. It is characterized by loss of energy, negative attitudes, and decreased performance. This system dynamics model encompasses the literature on burnout and belongs to a general class of stress and motivational models which describe problems of alcoholism and sexual harassment in the work place, etc. The gap between performance and professional expectations generates physical and psychological fatigue, which decreases involvement and performance. Supervisors frequently ignore the workers' problems, but will initiate structure when quality is perceived to decrease. The gap between expectations and performance may account for burnout initially, but cannot account for maintaining burnout after expectations decrease. Learned helpless may be the mechanisms that sustains burnout.
Many electric utilities have a heavily debt-laden capital structure. A number of factors have contributed to this situation, but chief among them is the theory that increased debt improves a corporation's earnings per share. This theory is derived from a relatively simple financial model which relates earnings per share, capital structure, interest costs, and income. Using a more comprehensive model, this paper shows that reducing debt as a percentage of capital structure can improve the interest coverage, earnings per share, and market price per share of electric utilities.
The analysis of the evolution of non linear dynamical systems is a complex task. The cases where: i) the model equations can be regarded as a careful and reliable representation of the real system and, therefore, need no revision or modification; ii) the parameter values are precisely known; iii) the initial conditions are precisely known, are rather rare. At least one of the previous conditions is not fulfilled in most of the systems of interest for System Dynamicists. Therefore qualitative analysis of dynamical systems, i.e. the study and classification of their asymptotic behaviours, is of extreme importance, at least in long term models.The methodologies of knowledge representation recently developed in the field of expert systems can be applied to this problem. We therefore developed MAPS, an expert advisor for the qualitative analysis of dynamical systems. MAPS takes the system equations as input, classifies them according to their features and performs the necessary calculations at each stage, sending appropriate messages to the modelist. At present MAPS deals with autonomous second order systems of ordinary differential equations. Further developments are foreseen concerning the study of higher order sytems and the design of an "equations database" for comparison with previously analyzed equations.
The United States Occupational Safety and Health Administration (OSHA) regulates the level of occupational safety and health within firms and inspects firms for violations of its regulations. Regression-based evaluations of occupational health and safety conditions in the United States generally conclude that OSHA's regulation fails to increase either the level of safety or safety-related investment. However, case studies and other forms of qualitative research suggest that regulation does increase both. Resolving this discrepancy requires a research strategy that combines elements of qualitative research and quantitative research. Simulation modelling can be used to bridge these two methods. Generally, the research project constructs a simulation model of accident generation within firms, generates synthetic data from variations of the model, and evaluates the sensitivity of regression methods to variations in the model. This paper presents the structure and base run behavior of the model used in this research project.
A new approach to Environmental Impact Assessment (EIA), based on system dynamics concepts is presented in this paper. System dynamics models will however be useful in EIA only if people are able to develop"good" models. The conceptual basis for building an expert system designed to guide people in developing system dynamics models is introduced in this work. Such an expert system will have two main modules: a system dynamics component, which will include basic system dynamics concepts and heuristics; and a specific application component, which will consist of the main relations and rules governing a givenenvironmental area. The system will also include an interface with a dynamic simulation language and with a decision aiding formulation.
This study uses a system dynamics model to understand the process of economic growth in the oil dependent economy of Indonesia. Many long-run growth patterns resulting from the various intuitively appealing development policies are analysed and an attempt is made to identify the best policy set for attaining a sustainable growth pattern. The study shows that influencing factor prices in a way to facilitate adoption of capital intensive technologies increases acceleration of growth and is a key policy to sustain growth in the long run.