This paper deals with System Dynamics as an alternative to methods of problem-solving that are traditionally taught in colleges. It is based on my experience of teaching the use of the methodology for analyzing small system of finance, hydrography, demography etc. Testing out any hypothesis where System Dynamics is compared to another methodology is complicated, and I do not present any conclusions. I argue further that this has to be done by a qualitative approach. In the field of finance quite a lot can be gained by using System Dynamics. The given example of calculating the net present value of a cash flow illuminates my point. In traditional textbooks this value is given by a formula based on the assumptions that interest remains constant over a long period of time, and that there is no or constant depletion of money value due to inflation. In view of economic reality this description is very native. On the other hand, it is rather cumbersome to develop and use a formula that takes in account variation of annual earnings, varying interest and varying inflation. Similar observations have been my incentive for applying System Dynamics to various sciences. Quite a lot of traditional calculations can be greatly simplified by resorting to the methodology of system dynamics; especially when it comes to integrating complex, realistic assumptions into the models. My preliminary conclusion is that System Dynamics enhance the understanding and enables the students to go well beyond the oversimplifications of traditional textbooks, and that the use of the methodology in various disciplines should be advocated. It is further my belief that teaching the subjects in undergraduate classes creates an underwood of users; a basis from which further system analysts can be recruited.

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Date created

• 1994

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• Document

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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System Dynamic Society Records

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• This collection is part of the University Archives