Corporate modeling in general and System Dynamics modeling in particular have now a history of more than two decades. Despite this fact impacts on the corporate planning process have not been very satisfactory. The reason is that in many cases system dynamics models (as well as other types of corporate models) had not been constructed, validated and implemented adequately for managerial use. They did not provide the information support which is needed in order to make the necessary decision in the various phases of a complex planning process that has a lot to do with major changes in markets, products, production processes, technologies, governmental regulations etc. Here, formal decisions rules as used in operation planning are impractical in most cases.
This paper describes the application of System Dynamics in what is traditionally a hard engineering area, but where the application of analytical techniques are limited by the stochastic nature of the system driving forces (coalface output rates) and the need for highly credible, management orientated results. Methods and analysis have thus centered on using discrete simulation techniques based on open system models, primarily to assist in capacity design. The use of System Dynamics in this context is based on two premises. The first of these is that System Dynamics has, in addition to it s softer areas of application, considerable potential to both supplement and enhance Operational Research approaches in the analysis of such systems. Secondly, it is the author’s belief that the key to further development and acceptance of System Dynamics lies in bridging the gap between itself and associated subject fields, such as Operational Research, by direct demonstration of the approach within these fields. Recent technological advances within the coal clearance field have provided an excellent form for such a demonstration.
There is a growing interest in energy and energy policy analysis because of the gap between the United States’ energy consumption and energy production. Numerous policies for dealing with America’s “energy crisis” have been discussed and evaluated. Underlying these policy investigations have been a variety of simulation models designed to analyze energy demand, energy supply, and the interaction between the two. Several of the models used for energy policy analysis do not couple the energy sector to the rest of the economy. Some modeling efforts even assume that there is no causality from energy to GNP. The purpose of this study is to examine the structural relationships that govern the interaction between the energy sector and the rest of the energy policies, so as to contribute to the development of more effective national energy policies. A computer simulation model that illuminates the feedback coupling between the energy sector and the rest of the U.S. economy is used in the analysis. The model is used to analyze the effects of increasing capital intensity of the energy sector on the level of economic output and the efficiency of a general class of conservation initiatives in mitigating those effects. When conservation initiatives are introduced, cumulative energy consumption is reduced and sales and profits of the producing sectors are lower. Average GNP is lower and average general unemployment is higher when conservation is introduced.
This paper introduces an aggregate view of factors and policies that can influence the development of military forces in two international alliances which see each other as potential adversaries. The growth of forces observed in the NATO and Warsaw Pact alliances is taken as a reference mode. A conceptual System Dynamics Model is described which can accommodate a number of different perspectives on this issue.
A System Dynamics project for a corporate client generally has three objectives: creation of an analytical tool, transfer of a new analysis technology into client organization, and managerial development. In many ways, the first two objectives are means toward the third. Development of new—and shared- perspectives, attitudes, and behaviors among the senior executives can be the most significant benefit from a System Dynamics project. This paper discusses how the process of System Dynamics has been used to draw out diverse points of view, to test and evaluate the differences, to build a consensus regarding key assumptions, to create confidence in the analytical tool which was developed, and, ultimately, to forge a managerial commitment to a new business strategy. The author draws upon several recent applications in the United States and Europe to illustrate the role of System Dynamics in effecting strategy change, and comments on how the process is affected by differences in organizational “culture”.
In the first lecture of the first system dynamics course I ever took the professor presented a list of the steps of a modeling project. During the rest of the semester it became apparent to all of us that actual projects never follow the list very closely. But it also became apparent that the list was useful anyway. It helped organize effort, gave direction to a stalled modeler, and provided a checklist of activities to be addressed (if not always accomplished).
As a novice System Dynamicist one learns all the textbook rules and advice of system dynamics modeling. As a practicing System Dynamicist one learns the many shades of rules and advice. The latter ones are only occasionally spoken about and seldom written down. The experience gained from applying formal modeling technique to a diffuse ambiguous reality, often exist as vague mental models of the various roles a formal simulation model and a policy analyst can play in the public policy formation process.
There has been a dramatic upheaval in our conception of science in recent years. The old notion that science is a logical, rational enterprise continually adding to the stockpile of knowledge has been challenged; many now recognize that the evolution of science is punctuated by violent disruptions. During such crises, or scientific revolutions, a tried and true theory is abandoned for an untested and often heretical alternative. The new theory destroys the old rather than building upon it, and thought he successor may flourish for centuries eventually another crisis develops and another revolution occurs. Some even claim that science is completely anarchic, more a no-holds-barred brawl than a calm, reasoned investigation of reality.
This paper explores the following questions: 1.What are the economic consequences of escalations in unconventional energy costs on terms of economic growth, inflation, real energy prices, energy production, consumption, and imports? 2. To what extent are escalations internally generated by interactions between the energy sector and the rest of the economy?
Dramatic declines in harvests strengthen the assumption that Long Island’s hard clam fishery may be heading for collapse. A family of predator-prey models has been developed to test and evaluate alternative strategies to reverse the decline in hard clam harvests and/or stabilize the clam population. Harvesting is simulated as a fixed percent of standing stock and the behavior of the baymen in response to price and supply of clams is not included in the models. Five types of policies are evaluated: closed season, maximum size limit, hatchery seeding, bounty on predators, and nursery sanctuaries (closed areas). Effectiveness is judged for both the short term (ten years) and the long term (eleven to twenty years after the policy was instituted). While seeding options produce modest short term improvement in the annual value (8.0 to 10.8 percent), only the two bounty policies produce significant improvement in both the short term (17.0 and 72.6 percent) and the long term (20.4 and 66.4 percent). The results of this model reflect the influence of specific management policies on the biological system alone. A later version, incorporating the behavior of the baymen, will introduce key social and economic factors.