The past offers few guidelines for forecasting the future of a drug in a new therapeutic category, but a systems dynamics model that counts patients instead of prescriptions can help predict demand for the product.
This paper attempts to explain the pervasive problems of poverty and hunger of the developing countries in terms of the internal tendencies of their socicio-technical organization. The analysis is based on a generic system dynamics model of an agrarian economy which determines income distribution and food adequacy endogeneously but treats government policy as exogenous. It is suggested that the policies such as agricultural development, financial and technical assistance for the poor, and population control, that directly address the symptoms of the problems of poverty and hunger, may be defeated in the long run since socio- technical arrangements of the system favor persistence of poverty and vulnerability to food shortage. These policies will, however, be successful if concomitant efforts are also made to reduce income inequality through fiscal measures and to build up a food slack in the system through obtaining food calories uneconomically from cereal production.
The general considerations for the development and customization of a generic system dynamics model for rural community development are presented. A preliminary version of a generic model is presented. Alternative customization strategies based on problem complexity as perceived by the community are discussed. The customization involves generating a network representation of the problem using a modified version of interpretive structural modeling and a pattern transfer procedure to enhance the generic model. The entire procedure is based on cognitive criteria to overcome human information processing limitations; to provide a rational and systematic approach to the simplification of problem complexity, and to promote a shared understanding of the problem situation among the participants.
This paper discusses the development of cognitive criteria for use in guiding the problem definition phase of System Dynamics modeling. The System Dynamics modeling process is presented as currently defined in the literature. The problem definition phase of the process is then isolated because of its overriding influence on model structure. Topics relating to information, information processing and group decision making are discussed and the shortcomings of human judgment and inference are identified. These shortcomings are related back to the tasks required for problem definition and criteria are identified which can serve as guidelines for the development of cognitive aids for structuring System Dynamics models. The paper closes with a brief discussion on operationalizing the concepts of cognition, creativity and social interaction as tests of the relative value of these criteria.
The present article describes an example of the application of the MDS approach (Modelli Dinamici per Strategie - Dynamic Models for Strategies) to the study of criteria for a supply policy and for a consequent economic evaluation of the different supply policies which may be adopted. The aim of the study is limited to an evaluation of the direct economic effects of the different hypothetical policies, excluding those associated with the market and with different production steps. The results of a series of simulations using the model are presented along with an outline of the economic benefits deriving from the adoption of a "tight-rein" stocks policy carrying a reasonable level of risk.
This short paper is intended to stimulate thinking and hopefully more serious efforts toward understanding how systems thinking tools can most effectively catalyze the development of management intuition. This effort draws from an on-going research program, the program in Systems Thinking and the New Management Style, aimed at advancing systems thinking as a practical tool for developing a more wholistic, long-term, and creative (as opposed to reactive) orientation in organizational leadership. The program involves a network of organizations, many of which have been pioneers in developing more visionary nonauthoritarian work environments. The organizations serve as laboratories to explore innovations in management education. The central premise in these explorations is that the localization of management responsibility will require transforming an organization's capacity to learn, so that local control and understanding can advance together. The research at M.I.T. is focused on developing a library of "generic structures," relatively simple models of organizational dynamics that recur in diverse settings, which can provide a foundation for that education. This paper discusses basic assumptions about learning that underlie the program.
The failure rate for small businesses is extremely high. Inadequate financial control is a major contributory factor. The pattern of interactions between a fluctuating sales rate and the levels of receivables, payables, inventory and cash is highly complex. A model is described which simulates the experience of a small business in managing current assets and liabilities. It demonstrates the way in which liquidity changes over the operating cycle, how cash flow, and profit are dynamically different and how the firm's need for financing is constantly varying. System Dynamics is a useful tool for understanding and improving the financial management of small firms.
The law of the conservation of energy has great practical importance in physics. Is a similar law applicable to economics? For an answer, System Dynamic-related methods were applied to the economic Two Sector Diagram. They show the forces of Supply and Demand operating on the economic flows of money, goods and labor. The demand can be expressed quantitatively by a utility function, which shows that economic forces and flows are informational concepts. Consequently, the two main forms of energy in any economic system are code transport and numerical code values. Only the latter are essential.
This work is the application of systems simulation to regional analysis and its constains the philosophy and approach of the report dealing with economic growth in the Susquehanna River Basin prepared by Battelle Memorial Institut-Columbus Labs but a new look: the subsystem Input-Output matrix into the framework and with the demands (usually exogenous variables) like endogenous and with no necessarily fixed technical and capital coefficients over the time and its resolved by no conventional methods The application was in the Istmo De Tehuantepec, México.
Production of pig iron in a blast furnace is a complex phenomenon. This paper identifies the major interdependencies forming a feed back structure, leading to a system dynamic model of blast furnace. The model has been used to evaluate projects on an overall and long range basis.