Busy lines are a persistent and persuasive problem common to all telephone systems, whether it counts with the most advanced digital technology and network management or no, there will always be a period during the day on the week where telephone calls cannot be completed due to busy line with the resultant loss of revenue. If expansion programs for telephone lines were not in accordance to actual demand growth telephone calls, this problemwill grow to the point where retrials would seriously impairthe telephone system operation. This paper describes the use of a system dynamics model for designing and evaluating expansion policies that respond to actual demand and ameliorate problem.
In a world of increasing complexity and turbulence organizations run the risk to loose effectiveness as well as efficiency when managed on the base of linear thinking and shortsighted decision making. System thinking and organizational learning instead will become a prerequisite for competitiveness and survival.
Population is an element in the social system. There are a number of elements in the social systems which will influence the population growth rate. On the other hand, population growth will, in turn, exert influence on other social elements. We can, therefore, apply the system dynamics (SD) model to dealing with the problems of population control. This paper, based on the investigation carried out in Anhui Province of China, conducts a study of the policies concerning population control in China by use of the system dynamics model.
The coordination in industrial systems should be one of the major challenges for future competitive advantages. The issues of industrial system’s coordination have been studied in system dynamics at the very beginning of the field. However, system dynamicists had not put enough efforts to study the industrial “systems”. This paper attempts to use system dynamics approach to study the “dynamics complexity” issues in industrial systems. The Center-Satellite System simulation game (CSS game), which based on Taiwan’s center-satellite industrial system (a huge industrial system with over 120 Center-factories, each with up to 400 networked Satellite-factories) was developed. Future research directions are discussed.
Recent research in the field of System Dynamics has been concerned with defining archetypal structures by which toclassify insights in dynamical systems. For example, Richmond has proposed both infrastructure and activity archetypes, whereas Senge has defined eight relevsnt generic structures. Additionall,Wolstenholme has defined a number of management situations as being made up of actual outcomes which are opposed to those intended.
What is the relative importance of internal versus contextual forces in the birth and death of scientific theories? Elaborating on the analysis of a model of multiple paradigm competition and scientific development already developed by Wittenberg and Sterman, we find that situational factors present when a paradigm is launched largely determine a paradigm’s probability of rising to dominance. Stronger paradigms that survive the emergence phase live longer than their weaker counterparts, but this too is contingent upon factors present during the emergence period.
This article concerns the problems that junior college students encounter when trying to understand and utilize the concept and insights traditionally provided by the teaching of mathematics. In this context, the concept “change” is significant because it is closely associated with the ‘derivative” and the "integral” defined in mathematical analysis.
The author explores a comprehensive methods of system analysis, inference and synthesis and model sets for studying complex system. These methodologies and model sets can be used in studying the development strategy and planning of socio-economic-ecosystem. It has been successful in the study of Pudong Economic Zone of Shanghai.
Based on system dynamics, this paper creates an approach of combining qualitative and quantitative analyses, systems thinking, system analysis, synthesis and deduction with a set of models. First, We build up a generic model set with various economic indexes. About several dozen modern management methods have been applied to the different subsystems implied by their parameters and feedback structures.
In recent years many system dynamics modelers have pointed out that for effective implementation of model results it is that the client participates in the model-building process. This has lead to various more or less successful approaches in group model-building. However, up to now little systematic research has been conducted in the area of effectiveness of group model-building. Systematic evaluation of group model-building is important in order to a) understand how clients and organizations are effected by group model-building; and b) improve the effectiveness of the group model-building proces. In this paper evaluation results are presented of four model-building projects based on clients' opinions of the successfulness of these projects.
This paper presents one middle term simulations model and its main results. We chose the production systems which produce complex capital goods, for example electrical equipement or household goods. The objective of this type of system is to build up stocks of finished goods which are put at the disposal of the customers. The corresponding macro model was designed by a systemic vision and split into three components which represent the operating, decision and information production sub-systems. The simulation of the generic model has permitted the improvement of system dynamics knowledge. We detected prominent decision loops and some unnecessary loops in production control.
Fuzzy numbers is presented as an alternative to probabilistic methods for the management of uncertainty in system dynamic model. Fuzzy numbers are particularly suitable to represent vagueness and qualitative values. Fuzzy numbers are used during simulation, but due to interactiveness among variables there is a need for global optimization methods. Some examples that illustrate the use of fuzzy numbers, both directly and as a means to represent qualitative values, are shown.
This paper explores the behavior of the gross investment considerig the linear versions and two non-linear versions from Kalecki’s model. This model assumes that there is an average gestation lag of investment and it is formuled by means of a mixed differential-difference equations.
This paper examines the use of a system dynamics modelling technique to enhance the contribution made by cash flow forecasts to decision makers' mental models. It is argued that by making explicit and accessible the dynamic complexity in cash flow relationships, systems dynamics can provide valuable insights for decision making puposes. By permitting the exploration of behavioural responses to perceptions about the financial position of thee business, a richer picture of the decision outcome is developed leading to changes in decision makers perceptions about the riskiness of a proposed course of action. A case study of a commercial organisation is used to illustrate these insights.
Service quality cannot be measured and tested in as straight forward a manner as in manufacturing. This biases serve businesses to focusing on keeping measurable variables-typically, expenses and work flows-in control, while underinvesting in the intangibles of service capacity and service quality. In the long-term, results can be mediocre levels of service quality, poor customers satisfaction, high turnover of service personnel, and ultimately, higher total costs. In this paper we will present an emerging theory of interactions between Service Quality and Service Capacity, relate this theory to past research in both the System Dynamics and Total Quality Management traditions and outline ongoing empirical testing of the theory.
What should every professional dynamicist know? What are the core works defining our field? This survey of the English-language system dynamics literature identifies and summarizes one view of the essential papers, book, games and software programs that have influenced the development of the field. Such a list serves as a means of reflecting on the foundation of current research and practice, thus providing a catalyst for a continuing discussion among system dynamicists on the major themes of the field and the contributions that define them. In presenting this bibliography, the authors encourage other researchers., practitioners and student to add their views to the present effort.
This Paper develops a conceptual model of a collegial system working without external adjudication or an institutional charter governing the conduct of its operations. The model is applicable to many of the academic and research organizations established in the developing countries, which have attempted to emulate the equivalent professional organization in the advanced industrial countries but have achieved low efficacy. The analysis suggests that an unadjudicated collegial system is not sustainable, for it will tend to create an authoritarian administration which will impair the collegial norms and misallocate scarce resources to the activities fueling bureaucratization and expansion of administrative scope, while professional autonomy, innovativeness and self-actualized behavior are suppressed. Professional conduct tends to be more-value rational than the bureaucracy since it is subject to reviews by external peers. Thus, legitimation of referent power is essential to creating value-rational decisions which assure a balanced resource allocation that sustains a collegial system. Limiting scope of the administration through an external scrutiny of its conduct or a charter appears to facilitate this process.
The purpose of this paper is to show that a well-known group of economists known as “Post Keynesians” or “Post Keynesian Institutionalists”, engage in macroeconomic modeling in a way that is strikingly similar to the system dynamics method. It will be argued, therefore, that system dynamics can be used to improve Post Keynesian macroeconomic analysis. In addition, this paper will present an original system dynamics model of macroeconomic growth, instability, and income distribution, that can clearly be classified as Post Keynesian. Of interest is that the model generates, among other behaviors, an economic long wave.
This paper is a case study on the introduction of systems thinking tools into a research group within a large information service company. The central dynamics involved in this learning process was a continuous goal shift. We address the realities of trying to develop a shared dynamic problem definition, and show how would-be practitioners internalize the material in unexpected and often paradoxical ways.
The paper proposes a methodology, of building system dynamics models for queuing systems. The methodology is applied to a variety of queuing systems and it is observed that, the models so developed are more transparent than conventional state-transition diagram and incorporation of real life complexities are easier. In effect working out the transient and steady state behaviour of a wide variety of queuing system becomes easy without going into much mathematical tedium.
The paper review the experience of a consultancy in the company called BETA. Two goals are pursued: cognitive and methodological. Cognitive goal refers to the System Dynamics methodology applied to a concrete case of the company growth and strategy making within a traditionally dominated accounting framework. Based on symbolic (though keeping similarity to real) data, the article presents the ithink™ model construction and simulation within 3 strategic scenarios: optimistic, realistic, and pessimistic. The methodological objective contains the use of the Partitioning and Tearing Method in the problem conceptualization and model preparation. Although the scope of the paper excluded a possibility of its detailed description, it is argued that this method has proved to be very useful in working with complex problems containing many variables.
Periodically, at different times of its history, the Argentine economy has been dominated by a vicious circle, well known among developing countries. The Central Bank pays interest on money and such interest is financed through emission of more money thus, causing inflation. In one of these periods: the corresponding to February 1981-July 1982, the accumulated inflation increased to 250 per cent. In 1982, the government decided to reduce the interest rate abruptly, in order to achieve a quick reduction of the inflation rate. However, the year 1982 witnessed the failure of the application of this financial reform. Although the growth rate of liquid assets declined, the inflation rate of July 1982 duplicated the precious month rate. This article reformulates a small economic model, in the Cagan tradition, due to Rodriguez (1986). It was conceived to explain the historic dynamics of the financial indicators, after the reform. Hopefully, the readability of the model should improve, when compared with the original version. And, instead of attributing the dynamics globally to the complex behavior of the system, the paper identifies the cause of this dynamics throughout the causal structure that produced it.
The purpose of this paper is fourfold: 1) to survey the literature on evolutionary economics in general; 2) to survey the literature on evolutionary economics modeling in particular; 3) to outline the contribution that system dynamics can make to evolutionary economic modeling; and 4) to present two original, evolutionary, system dynamics models.
Innovation is a topic that has received much attention in the literature in recent years. For the most part, these articles have not solved an important problem facing the managers in today’s large organizations -- how to manage a portfolio of interactive product- and process- innovations, addressing the interrelated forces, including monetary constraints, manpower planning & technology capability, to a dynamic environment. By systems thinking of these problems, the author first set up a generic S.D. model as a Microcosm for portfolio analysis of technological innovations. Based on this Microcosm, an experiment aimed at pattern selection of product-& process- innovations was conducted, drawing the conclusion different from the famous Abernathy/Utterback’s. Finally, the mechanism of group decision on project selection of innovation portfolio using the Microcosm was explained, and the group decision support system was constructed.
By the thought of coordinative development between Science & Technology, economy, education and finance, this paper first concerns the problems facing China on the resource allocation of Scientific Research. A comparative study on both developed and developing countries is made. In the meantime, the mechanism of the coordinative development between Science & Technology, economy, education and finance, the coordinative development between Scientific Research (Basic Research), Applied Research & Development as well as the priority of Scientific Research in different stages of social & economic development, a system dynamic model is constructed, focusing the analysis of scale & speed of resource allocation for Scientific Research in China.
This paper describes what is meant by modelling at Sunderland and how System Dynamics fits into this ethos. The teaching and the examples covered in this System dynamics module are different the usual course and the paper deals with our experience in these areas. The reaction of Eastern European ( Bulgarian ) students to this type of teaching is discussed. Students must complete a project in a work placement to obtain a masters qualification. The reaction of companies to the use of System Dynamics ( a new experience for most ) is discussed and examples of the type of projects that have been completed are given. The paper concludes with a description of a Hypercard project which extends the use of System dynamics to Engineering students.
The development and diffusion of innovations is a highly dynamic phenomenon. It is influenced by various factors like price, product quality, and market entry time. The paper discusses the impact of pricing strategies on R&D performance and the diffusion of innovations. It is based on a comprehensive decision support model in the field of innovation management. The model consists of two components: (1) an evolution algorithm modeling the processes of corporate R&D, and (2) a DYNAMO-based modul mapping corporate policy making and the structural fundamentals of market dynamics. The integrated model is used to analyze the dynamic consequences of different pricing strategies on research and development, the readiness for market entry and the resulting competitive advantages.
This paper presents a system developed to design strategies for organizational expansion based on system dynamics and expert system methodologies. The tool was especially built to plan the expansion of a computing system network.
The main objective of the MISTELA model is to integrate the different aspects of strategic planning of TELEFONICA DE ESPAÑA into one signal unit. By so doing one is obviously forced to give up many of the small details in order to be able to look at the larger picture. MISTELA uses a systemic approach to construct the model described in, this paper, Systems Dynamics was chosen, since this technique permits straightforward combination of different modelling procedures such as statistical inference, calibration by trail and error, linear and/or quadratic programming, etc. To give an idea of the size of the model, it handles about 1,500 equations, definition and identities. There are some 700 conceptual variables, and because many of these are vectors, in effect there about 4,000 scalar variables.
In almost all urban areas, existing infrastructure (transportation, water, sewer, social services) lags behind desired infrastructure. Planning new infrastructure depends on future land use forecasts. The distribution of future land use is also dependent of on available infrastructure. Due to this feedback, the infrastructure shortfall problem is resistant to solution through infrastructure improvement and local land use regulations. We have developed regional land use/infrastructure planning models that combine fairly simple system dynamics structures with spatially disaggregated databases. The models provide insights about the effectiveness of alternative policies, using detail of the local area that planners need.
Decision Support System (DSS) are commonly used in the manufacturing industry to assist management in decision making processes. There are several major types of DSS systems and each is useful for solving specific manufacturing problems. The development of intelligent DSS systems that can carry out high level reasoning is itself a challenge and a requirement by modern management. This paper illustrates the formulation of a DSS system (called Performance Decision System) that can be used for solving complex manufacturing problems. The DSS system is based on two major types of DSS; System Dynamics and Experts Systems.
This paper describes the work and experience gained by a team using a system thinking approach to developing a microworld to support the strategic planning of Athabasca University (AU), a fast growing opening university in western Canada. The opportunity for this experience arose from an invitation by the university President to teach an introductory course in Systems Thinking to a group of 30 senior management representing the faculty, administration, and the governing council. This work is intended to aid in understanding the dynamic forces which have allowed AU to double the number of courses registration in the past five years while lowering cost to government of providing access to AU from $1,179 to $635 per course registration (in constant dollars) since 1985. This work reports the experience of AU in building a Microworlds® system in order to accelerate organizational learning. The system is based on the system dynamics methodology and was developed using STELLA®. The system has been used to test different scenarios of strategic options which are almost impossible to evaluate otherwise. The system was validated against actual data and was used as management flight simulator to the system till year 2000. Repeated runs of the simulations have proved that quick fixes to one part of the system do not necessarily help its overall performance. It has been found that the process of constructing a simulation model is as valuable for problem solving as the final model itself.
The Beer Game is still today, one of the tools with the greatest impact in demonstrating that the behaviour of a system is generated by its structure. However, we believe that in its original form too much time is needed to play it and carry out a proper debriefing. In addition, it is not always easy to guarantee the hypothesis of isolation for the different positions within the game. Finally, we feel that participants often have difficulty in picking up quickly and clearly the process characterizing the game. To deal with these and other problems we have introduced certain modifications which, in our view, totally or partially resolve these difficulties.
A great number of System Dynamicists coincide in our belief that the methods and tools presently used in virtually all management education centres insufficient to cope with an ever more complex reality. For some years now there has been a significant movement within our field which aims to provide alternative ways and tools which will serve to fill the existing gap. Working along these lines we created a work group and started, within the EC Comett framework in 1990, a project termed “Learning laboratories in computer-aided Systemic Business Management”, sponsored by numerous European firms and institutions. The aims of the project are multiple and interrelated: production of learning tools based on System Dynamics, facilitating reflection on causes, design of learning laboratories in business management following a systemic approach, trying out the tools created and checking learning processes for different circumstances, development of training courses, promoting training of trainers.
The function of a competitive intelligence system is to generate a manufacturing strategy which is superior than the competition. A competitive intelligence system consists of a set of tools that capture and synthesize the competitors manufacturing strategies in order to generate the desired strategy. A competitive intelligence system that uses reference models is presented here and its use illustrated with a case study. A reference model is a generic system dynamics model which includes the cause-effect relationships that explain the current quality of the competitors products.
The savings and loan industry has been the primary source of home mortgages for American families since 1932. Since 1984, however, 25 percent of the savings and loans, approximately 700 out of 2800, have failed. Although the total costs associated with these failed savings and loans have yet to be determined, estimates range from $300 billion to $1 trillion. This paper discusses a system dynamics model of the effects of interest rate risk and default risk focusing on the savings and loan industry. Using the model to test the effects of policy initiatives specific to the prime interest rate and the default risk on loans, the authors demonstrate that the savings and loan crisis might have been lessened or even avoided if the regulators had a better understanding of the system’s structure and the effect of that structure on system behavior.
The diffusion of new technologies into the market is a critical factor in the success of any technology based company. This paper describes a system dynamics model which integrates a number of key concepts presently used to understand the diffusion process (e.g. technical progress functions, cost-experience curves). It shows how these concepts, together with management decisions regarding R&D investment, marketing, and pricing, drive the evolution of diffusion between technologies. It then illustrates how simulation can be used to understand the critical success factors in technology diffusion, and what this means for the management of technology-based companies.
In this paper we describe a modification of the Beer Distribution Game which we have used with MBA students and executives. In this version, we introduce a change in communication rules at the end of week 24. Our game debriefing addresses all of Senge’s five learning disciplines and stresses the basic question: how do we deal more effectively with underlying structure? This variation on the usual rules shows a way for designing experiments with the Beer Game to improve our understanding of how organizations learn.
The Management Flight Simulator is now being established as a tool to facilitate experiential learning with both undergraduate and postgraduate management students, and managers within learning organisations. Existing MFS provide user-friendly reports and graphical representations of historical data, designed to the limits of human computer interface (HCI) good practice. Although, existing MFS make use of sophisticated quantitative databases and models, but lack the softer data: managers’ in-trays, meeting notes, employee feedback, interviews with customers, press and television news reports, industry observers, financial analysts, and so on. Managers in real life rarely make decisions without going to look at a problem for themselves. Using multimedia MFS, users will be able to do the same, by interrogating and making observations using electronic-based media.
Management Flight Simulators (MFS) are now being used together with model-supported case studies in learning laboratories as part of undergraduate, graduate and executive courses, and also with managers in learning organisations. This paper reports results with three groups of undergraduate and postgraduate students, in a business school environment. With one group, a multi-stage experimental design is used to collect a variety of process data, including:
At its inception, the paradigm of SD was deliberately made distant from that of OR. Yet developments in 'soft' OR and systems theory now have much in common with current SD modelling practice. This paper briefly traces the parallel development of SD and soft OR and argues that a dialogue between the two would be mutually rewarding. To support this claim, example of soft OR tools are described along with some of the field's philosophical grounding and current issues. Potential benefits resulting from a dialogue are proposed, with particular emphasis on the methodological framework of SD. The paper closes with some suggestion on how to begin learning from the links between the two fields.
Managers involved in the production and trading of a commodity had adopted conflicting positions regarding the macro-dynamic behaviour of output and revenues in their market. The tools of system dynamics were used to articulate the assumptions of the participants and, in so doing, support a dialogue in which the understanding that the managers had of the key variables could be altered. The eventual use of a small STELLA model allowed the managers to isolate two specific, micro effects from which the conflict emanated. Further idea sharing allowed a consensus to be achieved on those two and, furnished with this new understanding, the participants aligned behind a single view of the market’s behaviour.
The form of the management flight simulator should follow from the functions it serves for the user. Interfaces designed to facilitate educational interventions should differ in functional form from interfaces designed to provide support systems for executives making real time decisions or conducting scenario planning exercises. Designers should consider the purpose of the interface, the nature of the interaction, the characteristics of the users, the context of use, and the style of presentation before developing the software application. This paper provides examples of how radically different design criteria lead a design team to choose different forms for several management flight simulators and executive-information systems.
A system dynamics model was develop for a company looking to reduce delivery times in projects involving the engineering, procurement and construction of complex equipment systems for pulp and paper mills. The model has some original features, particularly its portrayal of a critical path determined the ‘gates’ connecting sequential activities, which should be of general interest to project modelers. The model has helped the company identify practical ways to reduce delivery times by at least 30% and do so without driving up costs.
Advocates of the "Modelling as Learning" philosophy would not endorse a policy of handling over a ready-made model to a new client. In commercial environments, however, consultants and clients move on and there is pressure to maximise return on investment. This often means that existing System Dynamics models must be transferred between consultants and clients. Within the Business Consultancy department at Shell both the consultants and clients change jobs every three years or so and model handover is an issue that must be managed.
This paper investigates how mode-locking and other highly nonlinear dynamic phenomena arise through the interaction of two capital-producing sectors in a disaggregated economic long-wave model. One sector might represent the construction of building and infrastructure capital with long lifetimes while the other represents production of machinery, computers, etc. with much shorter lifetimes. Due to the positive feedback associated with capital self-ordering, each sector in isolation produces a self-sustained oscillation with a period and amplitude determine by the characteristics of that sector. However, the sectors interact through their mutual dependence on each other’s output for their own production. When this coupling is accounted for, the two sectors tend to synchronize or lock together with a rational ratio between the periods. While keeping the aggregate equilibrium characteristics of the system constant, we study how this locking occurs as a function of the difference in capital lifetimes and as a function of strength of the coupling between sectors. Besides mode-locking and quasi-periodic behavior, the observed phenomena includes cascades of period-doubling bifurcations, chaos, and intermittency. When the difference in capital lifetimes is very large, the system behaves like a one-sector model with a reduced capital content of production: Only one oscillatory mode remains, and it is much less pronounced than in the original one-sector model.
The Beer Distribution Game is one of the most popular ways of introducing managers and students to system dynamics. One of the reasons for this popularity is its success at teaching, on an experiential level, one of the fundamental principles of System Dynamics--that structure causes behavior. It does this in an entertaining and engaging manner. Some players have become so engaged in the experience that they want to explore the dynamics of game further. Because of this interest computer versions of the game have been developed to accelerate the opportunities to explore the game’s dynamics and make it easier to use and facilitate. This paper will highlight some of the features of these games which facilitate learning by individuals or teams.
In this paper were describe consulting groups, an effective tool used with great impact in different organizations to foster shared vision and the development of alliances. Through this tool, executives have the chance to present projects they want to strengthen, dilemmas of leadership and communication they want to understand or resolve.
This paper discusses visualisation as a key tool in the related fields of gaming/simulation and system dynamics. Using two gaming projects as examples, techniques and processes of visualisation from the gaming discipline are explaned. Conceptual modelling through the use of schematics us an important element of the system dynamics as well as gaming/simulation methodology. The authors conclude that both schools should invest in doing research and applying existing visualisation theory to their special styles of schematic building. The review of some concepts of 'visual language' shows that there is a lot of "we-in-gaming" or "we-in-stem-dynamics" take for granted when we work with schematics.
The office-space valuation literature concentrates on office-building attributes, such as square footage, height, number of floors, perceived architectural quality and distance from business districts or transit stops. Real estate researchers combine central place theory with landmark proximity in an effort to explain the complex relationships underlying office-space pricing. Yet, existing models have been inconsistent in relating office-space rents to square footage, indicating the possibility of spatial autocorrelation among corporate economic activities. The dynamic behavior pattern of the commercial real-estate cycle signals the creative interaction of business firms in their locale. A system dynamics model describes the interaction of these relationships in a particular location, namely midtown Manhattan.The model incorporates a third-order cost function, central place theory and landmark externalities to describe the causal structure underlying the valuation of 103 office buildings in midtown Manhattan, from 1980 to the first quarter of 1990. To embody spatial autocorrelation among corporation economic activities, the model accounts for the migration of wealth controlling and wealth producing firms. The results reflect the complex interrelationships underlying prime office-space markets and place in perspective their long-term cycles as exemplified by the New York office market.
Service researcher support the necessity of integrating policy and design dimensions with service front-line variables in modeling service systems. Current research unveils multiple causes of good and poor service quality as well as the goal that service design for quality should attain. The goal is to neither to narrow nor to close, but to reverse the gaps among customer expectations and perception of service quality. Grounded on the contributions of conceptual and empirical research, a small three sector system dynamics model describes the interactions of policy and service front-line variables in a typical quasi-manufacturing service. The firm treats customers defections as measurable scrap and, in a company-wide effort to ferret out weaknesses against potential loss, its top management is committed to soliciting feedback from defecting customers. Computed decision scenarios trace the patterns experienced with performance to the inauspicious effects of pulling on internal policy levers too hard. The resulting dysfunctional behavior shocks the entire service system, including customers, defectors and profit per customer. A radical change in the firm’s average customer life (avgLife) target triggers a cycling-doubling pattern in the call soliciting feedback from defecting customers. This chaotic pattern forces the entire system to respond accordingly. System dynamics can provide the integrated-process view required for understanding self-inflicted problems in services. Along with its policy analysis and service design implications, the simulation output indicates the morphology of the topology possibly underlying customer perceptions of service quality.
This paper describes the work and experience gained by a team using a system thinking approach to developing a microworld to support a of business process re-engineering and corporate-wide reorganization of a Canadian oil and gas producer. The opportunity for this experience arose from an atmosphere of change produced during several years of depressed prices for oil and gas and the consequent need for the players in the industry to downsize. This work is intended to provide managers with strategic management learning laboratory of a newly designed decentralized business unit.
This research addressed about the policy to reduce the nitric oxides pollutant in developing cities. The model was developed based on the balance between development of domestic automobile industry and improvement of urban environment so as to simulate the nitric oxides pollutant level and the domestic economic level through the alternative policies. The result shows difficulty to reduce pollutant with economical development in developing cities.
This paper describes a System Dynamics model which forms the basis for a management flight simulator that explores the impact of two total quality initiatives, Formal Inspection and Quality Function Development and adoption process. The paper focuses on the new perspective on software development dynamics gained in the construction of the model. It describes the measures of performance used and the causal structure of selected sectors. The model links existing software projects management and market diffusion structures, adding an explicit representation of product functionality and evolving customer requirements based on Kano’s Dimensions of Quality diagram. A discussion of future goals for this research and an evaluation of the impact of this kind of work on the software industry is presented.
Using interviews and a Delphi exercise, valuable information was collected from experts concerning the problem definition and model conceptualization stages of system dynamics studies. This research examined when to select and use various knowledge acquisition techniques and knowledge representation structures. Now this information is being incorporated into a comprehensive expert system for training novice SD analysts. A teacher model and a student model are being incorporated into the expert system to provide pedagogical flexibility and intelligent tutoring. This paper reports on the initial work on the prototype instructional expert system, and plans to extend this prototype.
System provides methods for Strategic Planning and Management. Lyneis (1980) presents robust ways to achieve time based strengths by minimizing delivery delays. Accumulations of matter and information conform the logistics and intelligence of Strategic Planning. Policies and Strategies are both rules to manage the system. The interaction with the environment is common to both fields and inclusion of the decision makers within the system enhances the strategic scope of the analysis. Feedback loops are new elements for Strategic Thinking. Now, they come packed in archetypes that are basic components of strategy formulation. s expand methods traditionally used by Strategic Planners, for instance the BCG matrix used to allocate investments. Peter Senges (1990) Fifth Discipline is a good example of a combination between the System Dynamics and Organizational learning, a traditional component of strategy development. Dynamics can also profit from Strategic Management. Managers are more familiar with Strategic planning than they are with Dynamics. So, it is a way to call the manager's attention. Besides, the organizational use of Strategic Planing at the top of the organization opens the door of company headquarters to System Dynamicist. However, some caution is necessary to improve the use of the discipline by the learning managers.
This paper addresses a simulation study that has been carried out in the Rotterdam Port to assess the value of decision alternatives for terminal entrance facilities and procedures. The organizations involved in this project are dynamic systems by nature, so static analysis and design technique does not suffice when supporting decision processes. The Dynamic Modelling approach was therefore applied in a case study.
A System Dynamics model specially built to analyze residential energy policies is presented. The model allows to simulate substitution of household equipments for more efficient ones using two stage economic decision process. In the first stage the user select the most economic alternative and in the second stage the user compares the financial condition to acquire the chosen energy alternative considering his buying capacity during the period of analysis (delays are condidered). The model allows to examine several aspects such as: alternatives on technology diffusion, energy consumption growth and effects of pricing policies on diverse energetic demands. The model was applied to the Medellin Metropolitan Area, Colombia. Results are included.
Group decision making and discussion often leads to unanticipated ends. The use of strategic support software to improve such processes yields higher quality debate. Simulation technology provides for explicit mental models, the exploration of assumptions, and instantaneous analysis of “what-if” scenarios. This paper will look at how the design of executive support software is shaped by dialogue and debate, and how interactive strategic management tools shape such discussions.
In this paper a JIT/KANBAN manufacturing process is simulated using both discret event, and system dynamics methodology. The results obtained are analized and compared. The purpose of this research is to determine the aspects to be more conveniently studied by modeling the system with each simulation approach.
This article presents a family of variously structured gaming simulations for training which have been once used to teach and experiment the learning tools of System Dynamics Analysis. These games, names after their prototype, are called The Games of Lucumia. Here we present also the results of a game modelled by the participants based on System Dynamics techniques.
System dynamic models are tools that allow one to explore the quantitative behavior of systems through time. However, real systems are usually multidimensional with both quantitative and qualitative variables. Recent development in digital video and sound processing suggest the enhancement of system dynamics models with streams of images and sounds related to the systems those models try to represent. A framework to integrate systems dynamics modelling and multimedia technologies is proposed herein. A multimedia systems dynamics water pollution model is included for illustrative purposes.
A crisis in a previously successful enterprise occurs when the value generated by the company’s activities become insufficient to cover the total cost incurred during a certain period. Frequently, in our days management faced with this problems needs to modify company goals and reduce costs over a short time. The rapid changes of goals and aggressive cost reductions frequently cause unexpected and dangerous secondary effects. These may inhibit company growth for a long time after the costs are brought into line.
System dynamics, in spite of its solid philosophical foundations and a very promising practical prospect, has not experienced the growth that one would expect from its potential. I argue that a major cause of this relative stagnation has been the lack of formal, regular undergraduate system dynamics courses in universities. System dynamics community must spend more time and effort discussing issues of university-level system dynamics education. This paper is an attempt to start such process. In the paper, I first present a taxonomy of different types of university-level system dynamics courses. Then, based both on personal experience and published literature, I identify four groups of problems and issues to be addressed by the system dynamics community before the system dynamics education can proliferate. These are: lack of formal teaching material, insufficient literature on teaching methods, problems of terminology, and insufficient emphasis on undergraduate system dynamics teaching. Personal experience has taught me that system dynamic courses are extremely rewarding for both the instructor and the students. Once the above problems are dealt with, I believe that the university level system dynamics education will proliferate, which should be a major step toward initiating an exponential growth process in the field in general.
The purpose of this paper is to explain the expansion and the contraction of the population in Norwegian rural communities. A preliminary system dynamics simulation model with emphasis on migration have been developed portraying a population sector, and sectors for kindergarten, education, housing, business, resources, and regional policy. The results of our simulations is being compared to actual development in eight communities for the period 1976 to 1988 with respect to the total number of employed in the private sectors as well as the number unemployed and the number of migrants.
The article discusses some statistical techniques applied as confirmatory tools to the System Dynamics modelling and analysis of Blood Bank Inventory Management systems. Instead of using arbitrary means, problem definition and statements are corroborated with statistical mehods of correlation and formulation of adjacency matrices. This is extended to the estimation of some of the parameters of the system. Numerical Performance Measures (NPM) used to evaluate the system response to various inputs are discussed. The response of the system is illustrated primarily as time series plots. System trajectories or phase plane plots are presented with statistical inferences in relation to the model. It is concluded that for SD model refinement and analysis statistical techniques can be used judiciously as a confirmatory tool in unison with judgmental evaluation of the system.
The main objective of most system dynamics modeling project is to support some kind of strategic decision making activity. This paper describes a modeling project where the primary goal was to establish an organizational platform for change. The project was conducted with a group of mid-level managers of a company at the eve of a period of organizational change. This group of managers engaged in a series of participative modeling sessions, facilitated by the authors. Extensive evaluation of the project results indicates that such a platform for change has been established.
This paper describes the use of System Dynamics models to manage the very substantial risks associated with complex design, development and production projects. The authors present a systematic approach to controlling the risks associated with a project’s cost, schedule and technical performance.
Researchers for complex systems become more and more important in modern science. System dynamics has done its significant work for the integration of System Theory and Computer Science in this field. Each dynamic system forms a complex causality network. Now we can use the panweighted network in Pansystems Theory for the dynamic system modeling, and further perform the automatic reasoning on this model. This new ideal may be developed into a deep seated issue in AI. In this article, the method of both modeling and automatic reasoning on a panweighted network in dynamic systems will be introducted together with a simple and typical example in System dynamics. The further extention of this new method will be discussed in other articles.
“Commons-type” computer simulations are increasingly popular tools for helping students grasp the underlying trap of individual versus collective rational action in situations of joint ownership and finite resources. Historically, these simulations have been designed on mainframe or mini computers with site limited capacity for either visual or auditory feedback. This paper presents a preliminary commons-type game designed for use with the emerging local extended-area MacIntosh based networks. This paper also tests whether providing diagrammatic and verbal descriptions of the inherent resource and behavioral feedbacks enables players to avoid the fundamental commons trap: Short-term individually rational actions which result in collectively irrational consequences.
This paper focuses on the financial markets crash of October 1987 to examine the effects of trading strategies and other institutional structures on price behavior during this period. It presents a system dynamics model which looks at average, aggregate stock prices. It specifies connections among various trading sites and techniques. In particular, it examines the influence of financial and technological innovations such as stock-index futures and other derivative instruments and high speed order execution and transaction systems on market performance. A major conclusion is that the financial markets are characterized by complex structures only partially economic in nature. This suggests that the interplay between market pricing behavior and institutional behavioral reactions are more complex than is currently believed.
Central Europe faces a decade of restructuring due to the move from centrally planned economies to free markets. Its economic evolution into the current structure of resource utilization and output composition is traced by using a dynamic model. Major production factors and their interaction are simulated to quantify the issues of the transition: these include the transformation of traditional industries and their reorientation towards services, the parallel transfer of ownership of assets and financial intermediaries, restructuring the labor pool, demographic changes and energy efficiency.
Firstly, the network diagram of energy supply and demand system was drawn then a linear optimized model of integrated energy with economy, the target of which is the least cost of energy supply, was developed to optimized the best energy supply structure. Secondly, according to above results, an SD model was built up to predict and to study the developmental changes of the system from the long point of view. Finally, the two models combined was applied to a village with a population of 800 people in the North China Plain and results of computer simulation showed on the base year (1990), if energy transformed devices were invested properly, the cost of energy supply system will be lowest on the condition of meeting the energy demand, at the same time it can save energy, and the energy supply is sufficient. But, with the development of economy and the upgrading of people’s living level, the energy supply will become an important factor for rural economy development. Several alternative plans designed to simulate the system gave different influences of energy to economy.
This study attempts to examine the effectiveness of our proposed learning environment for systems thinking, and the effects of different kinds of task’s screen design for the interactive dynamic decision game to enhancing the learning effect. Two experiments were implemented for the two investigation purposes. In the first experiment, we found that the proposed learning environment was viable for learning resulting from the positive effects of challenging goal setting and causal feedback on the increase of participants’ motivation and understanding of the game. In the second experiment, the effects of causal feedback was examined directly by the comparisons of three different kinds of task’s screen design including causal, hierarchical, and department types. We found causal type of screen design induced more analytical cognitive type just as the prediction of the inducement principle (Hammond,1998) and outperformed the other two screen design as predicted by the correspondence-accuracy principle (Hammond,1998). But the effect of causal type on performance improvement was not significant. The insignificant effect of causal relations task’s screen design on performance improvement revealed that the learning of systems thinking relied mainly on “by doing” or “by failure”, not on “by knowing”. In conclusion, we suggested that the design of dynamic decision game aided systems thinking learning environment should take the motivation factor into account to lead participants make more efforts to learn systems thinking by doing through failures. Although causal relations type could not improve learning effect significantly, however, it induced corresponding causal analytical cognitive type that is beneficial to the learning of systems thinking.
This paper informs the scientific and religious communities about a breakthrough in the study of religion: System Dynamics is being used to model and simulate the experience of a mystic during the time when he traversed the dramatic road to mystical union. The paper briefly presents how his modelling task is being approached and some of the key insights being made by focusing on the dynamics of the important dark night of the soul phase which preceeds mystical union. This gives a synopsis of the essence of my book manuscript, A Meditation of Mystical Union.
Scholars have long attempted to understand the nature of scientific change. Is science characterized by the steady application of universally-accepted norms of logical inquiry, or is it an enterprise that periodically reconstructs itself from new fundamentals? One of the best-known examples of the latter view is Thomas S. Kuhn’s Structure of Scientific Revolutions. Kuhn argues that new theories replace old ones rather than build upon them, and in the process revolutionize science’s very image of itself (1962:84-85). Scientific progress is seen not as a steady accumulation of truths, but “as succession of tradition-bound periods punctuated by non-cumulative breaks” ( Kuhn 1970:208). Kuhn’s theory has had enormous influence in the social sciences, but it is also of enduring interest in the physical sciences (Barnes 1982; Lightman and Gingerich 1992). The notion of paradigm has, rightly or wrongly, been used to legitimate alternative methods of research as well as to delegitimate dominant modes of inquiry. Nonetheless, although ‘paradigm competition’ has become well-established in the academic lexicon, little is known about what such competition actually entails. How do internal and contextual forces interact to shape and constrain the development of new paradigms? Why do some paradigms last for centuries while others quickly wither?
Models and computer-based information systems frequently meet resistance and suspicion by management, because they often do not meet the knowledge demands of management in a company. Solving this problem requires approaching modelling and information systems development as a management discipline. This discipline involves the activities of developing, maintaining, effective using, and conserving of models and systems. The paper concludes with a normative view of the relation between management levels and model management activities, and considers the possible use of computer-based information systems for effective model management.
In this paper, we put forth another approach to the dominant structure analysis, which we call parameter elasticity method. This method is based on the law of differentiability of solution with respect to parameter. It concerns itself with the dominant structure that contributes most to a particular behavior or behavior change. By applying this law, we develop the new method and new qualitative indexes to determine the dominant structure of a system. This new method has some advantages. One is that it can be applied directly to nonlinear systems without linearization. Another is that it can be accomplished within DYNAMO. In some condition, it may be a good guide to model simplification.
City grew, stagnated and then declined in the past two centuries. This is a general pattern in history in our world. Clearly, there must have been some powerful factors at work. This paper tries to make an explanation of such phenomena. Primary forces behind economies of agglomeration and urbanization and behind diseconomies of agglomeration are explained and revealed. Furthermore, in order to avoid such passage, some principles and ways are explored by system dynamic theory and modeling.The development pattern of a metropolis is closely related to its inner dynamic structure. Policymakers should be well informed and adjust the structures accordingly.Developing new zones adjacent to a metropolis is an effective way to pump the new life into the city. Meanwhile, the coordination and equilibrium between the new and old areas should be appropriately arranged and incorporated.The paper makes a study of the macro relationship among the flows of population, manpower, raw materials, funds and information between two zones and the impact of transportation problem on the whole city.Taking an example of Shanghai, a megalopolis, a series of policies for rebuilding up the functions of the city are suggested.
It is important to apply modern management methods and means to raise the productivity in modern era. But there isn’t powerful and systematic tool, we developed a tool and a series model which based on S.D. theory to diagnose the corporation structure and evaluate the effect of management methods application in corporation.
China’s economy had got its newest growth during the “No. 6 Five Year Plan” period, however, the problem of unbalanced production structure in China’s economy system turned to be more obvious and serious, reflected by the fact that the base economic production, defined as energy production, transportation and raw materials production faced a bigger lag in satisfying the social demand. Raw materials industry, including ferrous metal industry, nonferrous metal industry, chemical industry, building materials industry and forest industry showed even more serious tighteness in meeting the demand. The paper tackles with such a compliacated economy system by combining the qualitative method and quantitative methods. We believes that such a combined approach is effective in dealing with problems associated with a planned, but more and more market orientated economy, such as the economy system of China.
In order to understand the inner mechanism of corporations and incite their vigour, we create a model which provides us with the study of the development of new product R&D and advanced technology absorption, product life period, market promotion, the adjustment of the length of working time, productivity and hiring or firing of workforces.
For system dynamicists, it is important to understand how humanbeing solving problems and making decision in the real world. However, how humanbeing solving problems and making decision in the dynamic causal feedback environment are still not well understood both in psychology and in system dynamics. This paper is a preliminary study which attempts to deal with issues of problem solving, thinking strategy and pilot knowledge in a so called meta-dynamic decision making environment. The task was a computerized beer game modified from the board type beer game. Experiment results showed that there existed a goal-strategy dynamics in human problem solving. The thinking strategy contained both “structure-understanding” and “non-structure- understanding”. The pattern’s pilot knowledge from previous trials had influence on some subjects’ decision making. It’s possible influences in real world are discussed. Finally, from experiment results, two general problem solving processes ( the servomechanism process and cybernetic process) are proposed. Implications for system dynamics management flight simulator and systems thinking are also discussed.
It is often difficult to accommodate judgmental information together with quantitative data in an economic model. One approach is to embed human decision-makers as role players within a simulation exercise. Their behavior is recorded by the computer system, becoming a part of the modeling process. We consider some of the human interface requirements to accomplish this integration, a methodology using supervised linkage of spreadsheet with DYNAMO models, and an example of its application toward modeling the 1992 economic unification of Europe.
The System Dynamics model which we are presenting here has been prepared with the purpose of examining the relations between the number of existing grant-holders in Spain and the number of researchers in active service in the sectors of Higher Education, Business and Public Research Organisms. The aim is to examine these variables in order to analyze the conditions of balance between the offer of potnential researchers trained while holding grants and the demand for new researchers trained while holding grants and demand for new researchers on the part of the science and technology system in Spain.
This paper is a research on the integration of system dynamics, protfolio and scenarios. The prototyping is used in developing the system dynamics model which is focused on the activities of business technology management. At here, we will discuss about the implementation and some simulation results of the BTMDSS model.
After providing a framework for integration of System Dynamics and Expert Systems, this paper builds theoretical bases to integrate three main features of rule based reasoning mechanism into conventional System Dynamic models. Then we start to modify the System Dynamics modeling tools to adopt the integrated features. To illustrate, we demonstrate a prototype for integrated theories above.
To each causal diagram, and the structure that it represents, a dynamical system can be associated. From its qualitative analysis, the behaviours associated to the structure can be deduced. This paper introduces a piecewise linear dynamical system associated to a causal diagram. Some interesting results on the qualitative behaviour of the system can be obtained from this dynamical system. In this paper a method is proposed to implement automatically the construction of a piecewise linear dynamical system to each causal diagram, the study of its equilibria and its stability. This allows us to obtain, automatically, the behaviour modes associated to a causal diagram.
This paper explores the advantages of System Dynamics as an enquiry method for analysis of blood bank management Systems which exhibit far reaching social implications. Causal loop diagrams are developed connecting various system components. The integration of individual causal loops is presented in the form of an influence diagram representing the ‘dynamics’ of a blood bank. Simulation model is built on the basis of causal loop diagrams. The system response exogenous disturbances or policy changes are analyzed. The catastrophe model of blood bank system is developed and the parameters forming the control surface and behaviour surface are correlated with those of the System Dynamics model.
We gave a report on the model for dental diseases at the 1987 System Dynamics Conference. The model consists of 4 sectors: demography, cavities, pyorrhea and baby teeth. The demographic sector covered population of 5 three-year age groups under 14 years of age and 13 five-year age groups above 15 years of age. The cavities sectors and pyorrhea sector were composed of population of five-years age groups, on the other hand, the baby teeth sector used population of three-year age groups.From the total number of defective teeth, total dental costs in Japan were calculated annually from 1963 and projected to 2025. We added to this model a new level variable which is technology (rate variables and multipliers) in order to demonstrate to the effect of technology on the other level variables. New simulation results will be reported at the International System Dynamics Conference this year.
Organizational learning is intrinsically systemic, because it deals with changes in thinking and acting not only in individuals, or in teams, but organization-wide. Our ability to understand and improve organizational learning will depend on having an operational systems framework, which can both sharpen theoretical insights and address practical management concerns. Building on past work in organizational learning and system dynamics, the new Center for Organizational Learning at MIT is attempting to develop a rigorous foundation of systems principles and methods so that current interest in organizational learning and “ learning organizations” can lead to significant advances in management theory and practice.
System Dynamics has not achieved widespread recognition as a paradigm of substance in the business-related disciplines of Strategic Management, Organization Behavior, Organization Theory, or Operations Management. One reason for its slow acceptance by academicians in these fields and related social sciences may lie in the specialized meanings and usages attached to common words by the System Dynamics lexicon. Words such as “open,” “closed,” “feedback,” and “structure” -- used differently than established scientists might expect --may create perceptions that System Dynamicists simply don’t understand systems theory. Writers in the field need pay special attention to the semantic implications of their presentation.
To the date, Budget Plan definition in Italian public companies is approached with insufficient deepness. We believe this is common to other countries too.Indeed, most public organizations develop the Budget Plan basing themselves only upon the available data and not upon knowledge acquired in years of experience. Balance sheet data are therefore obtained simply adding to the previous information, an amount estabilished, for example, on the expected inflation rate.This approach although “trivial” supports the budget responsible, because during the budget presentation, very few elements can be effectively criticized. It is commonly accepted that also public companies find themselves in turbulent environments. This is due to both the increased number of endogenous variables, and to the complexity of exogenous parameters. Therefore the Budget Plan definition becomes always more critical, and consequential difficulty of its evaluation assumes relevant importance.The paper describes an experiment carried out by an Italian Public company which is adopting a dynamic economic- financial model for both, Budget Plan definition and for its evaluation. The model is based upon System Dynamics approach and evaluates a series of scenarios providing support to the budget definition responsibles in taking strategic policy decisions, and better “explaining” the effects of decisions undertaken.
This paper describes a case study of applying organizational learning principles to the strategic change of a large German automotive company which seems to be successful alternative to the usual top-down approaches. Different models of implementing change processes are discussed, and their adequacies are assessed regarding to the degree of supporting self-transformational processes within the organizational.
Since formal modelling requires having a model boundary encompassing finite complexity, so deductive logic is possible, complex problems must be partitioned into simpler parts before being analysed. There are many ways to slice a complex problem but not all create partitions that keep together processes contributing to effective policy design. This paper explore ways in which a complex problem may be appropriately sliced so the models of the partitions can serve as effective tools for policy design.
While nonlinear combinations of multiple modes existing in complex oscillatory systems may generate chaotic behavior in real systems, the studies of chaos attempted in system dynamics have often resorted to forcing simplistic models of systems to chaos. This paper illustrates how chaotic modes have been constructed through the creation of mis-specifications and anomalies in the model structure and parameters. This process has not only reduced the models to artifacts with little relevance to problem solving but has also invariably introduced a stiff structure that is susceptible to considerable building up error as numerical integration methods are used with long simulation times. The paper concludes that a model must qualify as an empirically valid system by meeting the requirements of the normal system dynamics practice if the chaotic modes it generates are to be of practical value.