Introduction to System Dynamics

Ishardita P. Tama

Outline
Understanding Systems Thinking System Dynamics (SD) Causal Loop Diagram Stock and Flow Diagram References

System thinking
is the process of understanding how things, regarded as systems, influence one another within a whole an approach to problem solving, by viewing "problems" as parts of an overall system, rather than reacting to specific part, outcomes or events and potentially contributing to further development of unintended consequences

Understanding Systems

 California 1990 :
o ZEV (zero emission vehicle) electric cars no tailpipe, no pollution o Looks good? o

Yesterdays solution becomes todays problem

Feedback
o The more NATO nuclear weapons, the more Soviet Union built o The more a firm lowers its price, the more the competitors respond in kind, forcing the firm to lower even more o The less nicotine in a cigarette the more smokers must consume to get the dose they need o The more attractive a city, the greater immigration from surrounding areas, leading to high criminal rate, and eventually decreasing its attractiveness

 We have to be aware and understand the implications of feedback by the decisions we make.

Learn about the complex system

structure

and

dynamics

of

System Dynamics

System Dynamics
o Introduced by Jay Forrester of MIT in 1958

o The study of information-feedback characteristics of industry activity to show how organizational structure, amplification (in policies), and time delays (in decisions and actions) interact to influence the success of the enterprise (Forrest 1958 & 1961)

High Abstraction Less Details Macro Level Strategic Level

Aggregates, Global Casual Dependencies, Feedback Dynamics,

System Dynamics
Levels (aggregates) Stock-and-Flow Diagrams Feedback loops

Middle Abstraction Medium Details Meso Level Tactical Level

Discrete Event
Entities (passive objects) Flowcharts and/or transport networks Resources

Low Abstraction More Details Micro Level Operational Level

Mainly discrete

Mainly continuous

Individual objects, exact sizes, distances, velocities, timings,

Tools
Causal Loop Diagram
o o o a useful way to represent dynamic interrelationships Provide a visual representation with which to communicate that understanding Make explicit one's understanding of a system structure - Capture the mental model Develop model using stock and flow principle

Stock and Flow Diagram

o

Causal Loop Diagram

a useful way to represent dynamic interrelationships Provide a visual representation with which to communicate that understanding Make explicit one's understanding of a system structure - Capture the mental model

Variables - an element in a situation which may act or be acted upon Vary up or down over time (not an event) Nouns or noun phrases (not action words) Links / Arrows - show the relationship and the direction of influence between variables

S's and O's - show the way one variable moves or changes in relation to another S stands for "same direction O stands for "opposite direction or B - Balancing feedback loop that seeks equilibrium or R - Reinforcing feedback loop that amplifies change

Structure of CLD
Causal relationship between two variables

The S means that the two variables move in the same direction, all other things being equal

Hunger
O

Amount Eaten

The O means that the two variables move in opposite directions, all other things being equal

Variables

Nature of loop. Indicates whether the loop is balancing or reinforcing

Reinforcing Loop
Structure
Employee Performance
S S

Behavior Over Time

Supportive Behavior

Perf. Level

Supervisors Supportive Behavior

Unsupportive Behavior
Time

Balancing Loop
Structure
Desired Inventory
S

Behavior Over Time

Discrepancy
O
100 ++

Actual Inventory

Actual Inventory
S

Inventory Adjustment

100 100 - -

Desired Inventory

Time

 CLD mental model Kalkulasi ?

Stock and Flow Diagram (SFD)

o Quantification issue

Stocks
Stocks are accumulations. Stocks hold the current state of the system: what you would see if you were to take a snapshot of the system. If you take a picture of a bathtub, you can easily see the level of the water. Water accumulates in a bathtub. The accumulated volume of water is a stock. Stocks fully describe the condition of the system at any point in time. Stocks, furthermore, do not change instantaneously: they change gradually over a period of time.

Flows / Rate
Flows do the changing. The faucet pours water into the bathtub and the drain sucks water out. Flows increase or decrease stocks not just once, but every unit of time. The entire time that the faucet is turned on and the drain unplugged, water will flow in and out. All systems that change through time can be represented by using only stocks and flows.

 STOCK FLOW / RATE Auxiliary

i1 i2

Stock

Rate

o1

Auxiliary

o2

o3 i3

Birth rate normal + + Births

Birth rate norm BRN

Birth rate BR

R +

population

-B +

Population

Deaths +

Death rate norm DRN

Death rate DR

Death rate normal

References
Todd Little, Introduction to Systems Thinking and Causal Loops, www.toddlittleweb.com/Presentations/wwsdc/Syst emsCausalLoops.ppt Erik R Larsen, Introduction to System Dynamics, www.cs.unibo.it/~fioretti/AC/AC2005/docs/Bertinor o.ppt J.D. Sterman, Business Dynamics A.C. McLucas, System Dynamics application