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1996 Proceedings with Abstract – Cambridge, Massachusetts, USA

The 14th International Conference

of the System Dynamics Society

1996 – Cambridge, Massachusetts, USA

The following papers were presented at the conference in parallel, plenary, and poster sessions. The original printed proceedings, edited by George P. Richardson and John D. Sterman, were printed in hardcopy (Volume 1: A-L and Volume 2: M-Z) and distributed at the conference. Below please find the Paper Index for these proceedings, including an abstract when available. Papers are listed alphabetically by the last name of the first author. Available papers are Acrobat (.pdf) files and can be read using Acrobat Reader available from adobe.com.

For details about purchasing a copy of the printed proceedings, visit our website System Dynamics Society or send an email message to system.dynamics@albany.edu.

PAPER INDEX – listed alphabetically by first author:

Analyzing National Health Service Waiting Times

Ann Van Ackere

Peter Smith

Abstract: The United Kingdom National Health Services (NHS) delivers 95% of the country’s health care. It is a public sector organization, which delivers health care free of charge at the point of access. With the exception of emergency services, patients cannot refer themselves directly to NHS hospitals. Instead they must be referred by a family practitioner, who acts on the “gatekeeper” to hospitals health care. If referrals give rise to excess demand, rationing takes place in the form of waiting list for non- emergency procedures. There is a small private sector which is used by some patients who have the means to bypass the NHS queues.

Clients’ Opinions on Group Model-Building: An Exploratory Study

Henk Akkermans

Jac Vennix

Abstract: Building models of strategic issues with a group of the stakeholders has become an established approach to support strategic decision- making. Involving these stakeholders helps to generate relevant information regarding the issue and at the same time creates ownership of and consensus on the resulting group recommendations for dealing with the issue. In this way, group model building creates managerial commitment to implement these recommendations.

Putting Systems Thinking to Use: A Case Study

Prikka-Matti P. Alanne

Anil B. Jambekar

Abstract: Systems thinking tools are particularly useful for diagnosing the problems for the situations with known history and insights are generated by structuring the assumptions to uncover causes of significant problems. An objective of this paper is to put systems thinking to use by showing how the problems faced by the case company were due to collective actions of several functional units of the organization. The focus here is to illustrate through casual loop diagramming the consistently recurring themes during the case company’s attempt to adopt quality management concepts. The paper concludes with generic insights equally applicable elsewhere.

Efficiency In Sustainability – The Efficient Life Styles of Kerala

William Alexander

Abstract: The Kerala Phenomenon, high life quality, has been called ” A Mystery Inside a Riddle Inside an Enigma” A [SCIENTIFIC AMERICAN, March 1995]. More particularly, Kerala is an unexplained economic phenomenon– high life quality measures, including first-world size families, at very low income levels. Within India, Kerala is a small state (3% of 930 million). Yet in a size ranking of the 128 world nations, Kerala is larger than the first 98.

Dynamic Simulation of Rural Social and Economic Interaction

Louis Edward Alfeld

Abstract: The Rural Community Modeler (RCM) presents a prototype version of a simulation model that recreates the behavioral dynamics among many rural community elements. The model forecasts how different community elements change over time due to the adoption of specific actions or policies or natural growth or aging. In every community, changes result from a combination of natural forces and public policy. RCM describes why these chances occur, how they can be influenced and what to expect in the future. Individuals and organizations using RCM will gain a better understanding of the forces that shape their community as well as insights into actions that will successfully influence those forces. RCM demonstrates how an urban dynamics model might be constructed, how it would function and what supporting data would be required to make the model a functional planning tool.

The Industrial Base Analysis Model (IBAM)

Louis Edward Alfeld

Robert M. Sholtes

Abstract: IBAM is a production chain simulator. IBAM simulates the flow of orders and products among the many suppliers and subcontractors that combine to produce an end item. The U.S. Department of Defense has used IBAM to analyze the erosion of its critical manufacturing base in an era of declining defense budgets and to identify potential bottlenecks in the event of renewed defense acquisition requirements. IBAM can also provide support for analyzing industrial competitiveness, planning regional economies, and building “virtual” manufacturing organizations. The model identifies key manufacturers, assesses labor needs, forecasts technology impacts and prioritizes policy options, all with little effort. The model benefits users by pinpointing potential bottlenecks and quantifying the relative costs and benefits of alternative solutions.

Modeling the Dynamics of Technological Ramp-up Within Firms

E.G. Anderson

N.R. Joglekar

Abstract: This paper used the system dynamics methodology to integrate the dynamics of technological innovation into a formal model of business strategy. This model- known as the Technology Ramp- Up Stimulator (TRUSIM)- specifically focuses on the evolution of technological performance and competitive structure. TRUSIM links existing firm management system dynamics structure to new modules representing the dynamics of innovation and that of technological capability. This model will be used to explore several typical scenarios of industrial evolution, such as technological lock- in and first- mover disadvantage.

Microworlds: A System Dynamics Application in Learning Keynesian Macroeconomics

Hugo Hernando Andrade Sosa

Jaime Daniel Mejia Castro

Ricardo Vicente Jaime Vivas

Jose Alberto Pinto Mantilla

Abstract: Teaching economy in colombian universities is so difficult, specially in curriculums for students of fields different to economy, in which economy courses are often so little motivating, and there are developed with a very specialized terminology, difficult to be well understood; in addition to that, there are big troubles in testing in real world whether student’s ideas to control an economic system are effective or not. Computer science offers new tools in all human activities, including education. Here it is presented HICEFE (Computational tool for Comprehension and Experimentation with Economic Phenomenon) that is a proposal to incorporate computational technology in teaching economy, and to reinforce the application of a systemic approach in the educational process, feasible of being used in different study fields. Models that conform the tool have been made with Systems Dynamics methodology, to be presented like microworlds that offer to the user the opportunity to study economic phenomenon, evaluating the student’s understanding by experimenting with stimulated solutions to problems.

Re-Building Knowledge By Assumption of Complexity with System Dynamics – A Case Example in Polymerization Process Engineering

Hugo Hernando Andrade Sosa

Alvaro Ramirez Garcia

Jose Daniel Cabrera Cruz

Abstract: This paper is a continuation of one presented in the 1994 International Conference on System Dynamics. That was an opportunity to discuss about the industrial importance of chain polymerization process: to present a model of the reactions taking place and the dynamics of molecular species calculated by a corresponding mathematical model using SD methodology. This paper presents a more complete model of the reactions occurring in the process, the corresponding mathematical model and a comparison of results: those calculated with a traditional, non SD approach, ours using SD and those gathered experimentally.

The Impact of Environmental Policy on a Firm’s Behavior – A System Dynamics Approach

Maria Paula Antunes

Rui Santos

Nuno Videira

Abstract: Pollution control policy has relied on the use of command and control (e.g. emission standards) and market based (e.g. emission taxes or permits) instruments, to promote the attainment of established environmental quality objectives. In the design of such instruments a process-oriented approach, directed to the control of emissions in production processes has traditionally been followed. More recently, the adoption of a product- oriented approach, where the environmental performance of products is controlled, namely through a lifecycle analysis, has been viewed as an alternative and a complement to traditional environmental policy instrument.

Walking Through the Minefield: How Systems Thinkers Avoid Fallacies of Perception and Action

Daniel Aronson

Abstract: This paper describes how those trained in systemic thinking (whether system dynamics or systems thinking) avoid the reasoning pitfalls among those not trained to think systemically. I will discuss how systemic thinking provides advantages in two fundamental areas: in avoiding underestimation or misattribution of relationships when constructing an understanding of a situation, and in providing better action based on that understanding. Its strength in these areas gives it a great advantage over the thinking commonly employed by those who have not been trained systematically and is, I believe, one of the main reasons for the superior results obtained by interventions based on systems thinking versus those based on other methodologies.

Sensitivity Simulation

William B. Arthur

Robert L. Eberlein

Abstract: Systems dynamics modelers normally develop models and implement findings from a deterministic perspective. This approach has great merit. It focuses attention on system structure and behavior as well as ways to change them. Once developed, however, a good system dynamics model is an excellent tool for analyzing systems behavior under a wide variety of parametric assumptions. Though such sensitivity analysis can (and should) be done manually through repeated simulation, automated tools allow more complete exploration. Moreover, they can provide information on the distribution of outcomes that strongly effects decision-making. In this paper we present the basic ideas behind doing multivariate sensitivity simulations (MVSS) and describe how these have been implemented in Vensim. Then, we present a case study that uses MVSS in the pharmaceutical industry.

Decision Support for Strategic University Management: A Dynamic Interactive Game

Yaman Barlas

Vedat G. Diker

Abstract: The main objective of this research is to construct an interactive dynamic simulation model, on which a range of problems concerning the academic aspects of a university management system can be analyzed and certain policies for overcoming these problems can be tested. More specifically, the model focuses on long-term strategic university problems that are dynamic and persistent in nature, such as growing student-faculty ratios, poor teaching quality, low research productivity. The model generates teaching, research and professional projects. To construct such a game, a systemic feedback model of the major academic aspect of a university system is built. The model consist of twelve sectors: Graduate Instruction, Undergraduate Instruction, Graduate Instruction Quality, Undergraduate Instruction Quality, Graduate Faculty Instruction Overhead, Undergraduate Faculty Instruction Overhead, Graduate Faculty Research, Undergraduate Faculty Research, Graduate Faculty Projects, Undergraduate Faculty Projects, Laboratory Facilities and Assistant sector.

Product Diversification and Quick Response Order Strategies in Supply Chain Management

Yaman Barlas

Ayse Aksogan

Abstract: Quick Response is a new supply chain management system designed to meet the changing requirements of an increasingly more competitive market in the apparel sector. The main objective of this study is to build a Systems Dynamics stimulation model of the portion of the textile and apparel pipeline including the retailing and wholesale processes to search for inventory decisions and policies that yield reduced costs/increased revenues in terms of the retailer. As seen in Fig. 1, the model not only includes the main components of supply chain, but also incorporates how product diversity may affect sales, There are two conflicting effects: first, as the product diversity of the store increases, the probability that customers’ preferences will be matched increases towards 1.0 asymptotically. (See Fig. 2a). This graph not only makes sense, but can also be obtained by probabilistic analysis, using Binomial probabilities (Barlas & Aksogan 1995) The opposite effect of increasing diversity implies lower stocks of each product type (“Typesupply”). Thus as the ratio type supply/demand decreases, higher fractions of demand will be lost due to type stockouts. (As shown in Fig. 2b) Therefore, the conflicting effects of product diversity is potentially worth investigating dynamically.

A Simulation Model for Telecommunications Services Partially Substituting

Antonio Barron

Silvio Martinez

Jose Maria Lopez

Abstract: In the S.D. conference (1. 993), was exposed the Mistela, an integrated simulation model applied to a Telecommunications Operator. This described among other questions, the forecast demand equations of traditional services with historical data (monthly, since 01. 1980 to 12. 1992), based on conventional econometric procedures. However, the provision of demand of new services can not be made by this method, and we appealed then to other kind of model. In the new version of Mistela the demand equation of a new service draws a logistic curve, Thus we appeal to Lotka-Volterra models, so of the kind predator- prey, based on the following analogy: The total market is the roof, or the saturation level, and the behaviour of each predator would be connected among them, so the pure logistic would be modified as a function of aggressivity among the services. Such aggressivity depends of the price policy, the relative quality, …., of the market strategy in short.

A Contemporary Masters Program in Systems Thinking and System Dynamics

John Barton

Abstract: N/A

A Framework for Addressing Contemporary Management Problems

John Barton

Abstract: N/A

A Policy Model for a Retail Water Company in Australia

John Barton

Purnandu Mandel

Abstract: N/A

Recycling of Building Materials

Eric Bave

Abstract: N/A

A Proposed Project Management Cost Modeling Taxonomy

Gary A. Bell

J.O. Jenkins

Abstract: On inspection of the cost estimation problem it was realised that there are two equally important areas of concern which are; cost explanation, and cost accuracy. A survey of previous cost models applied within the software engineering discipline suggest that there are three distinctive groups which are labelled:  The Reductionism Group; The Dynamic Group; The Systemic and Dynamics Group. Key characteristics and archetype models associated with each cost modelling group are briefly outlined. It will be shown that forecast from the reductionism and dynamics cost modelling groups are inaccurate, and their explanations of projects cost are poor. Therefore, alternative mathematical techniques need to be researched. Systems dynamics has been selected, because it focuses on explanation which is seen as a strength. The aim of this research is to develop a negotiation model that explains software project costs.

Modularization of the Enterprise and System Dynamics Models: An Application to the Explication of Suggestions from the Shops

Mario Benassi

Roberto Berchi

Abstract: Organization design can benefit from the utilization of the current available simulation techniques. The utility is greater where new organization profiles are in experimentation phase. This work has been developed as part of a larger study (still in process) related to the experimentation that is developing in manufacturing.  We are observing the creation of manufacturing units that manage, nearly independently, the manufacturing and the related supporting processes. One of the peculiar characteristics of these organizations is the way these units manage the suggestions (technical, management, maintenance) coming from the employees. The New Holland case shows the dynamics of transformation of the suggestion processing and implementation. The models developed clarified the reasons of some problems observed and suggested some possible corrective actions.

A Model of the Rice Postharvest System in the Philippines

Edwin Benigno

Abstract: The Philippine government launched the Grains Production Enhancement Program (GPEP) in selected areas of the country most suited for grain production leaving the less productive areas for the production of commercial or cash crop. One of the projects under this program is the loss of rice and corn grains from harvest until storage and compare these figures with losses estimated from researches conducted in the Philippines.  In the future, periodic surveys will be done to assess the progress of postharvest technology in the country.

Global Change Education: The Use of System Dynamics Concepts for Science and Policy Interface

Dan S. Bernstein

Abstract: My primary research interest is in improving communication between atmospheric scientists on the one hand and the general public and policy makers on the other hand. Miscommunication is delaying the implementation of effective policy intended to mitigate global climate change caused by human intervention. Solution to the problem of global warming will have to be formulated by policy makers working cooperatively with scientific experts. This global problem will require global cooperation and solutions. If there is to be rational and effective policy regarding global warming, policy analysts and the public need to be better understand the environment. Effective communication and education are paths to better use of scientific knowledge. A higher level of understanding can lead to better analysis and design of the best policies for reducing the rate of environmental change or adapting to it.

Budget Formulation, Unpredictability and the Use of System Dynamics as a Coordinating and Learning Mechanism in Regional Government Management

Carmine Bianchi

Alfredo Moscardini

Abstract: The incremental view in budget formulation is still widespread today, particularly in the Public Administration context. Quite often, such an approach offers politicians an expedient to artificially inflate expected tax revenues that can budget for higher expenses and promise higher financial subsides to a wider circle of voters (i.e.: unemployed, trade unions, industrial representatives, etc.) In this perspective, budget formulation is only used as a political consensus (rather than a managerial) tool that is useful to achieve agreements on virtual objectives and, consequently only to provide votes for politicians. Moreover, particularly in the Italian Regional Government context, a lack of coordination has been observed between strategies and policies pursued by different departments, in fact, several grey or overlapping areas can be found in departmental budgets.

Application of Dynamic modeling to a Solvent Recovery Area at a Pharmaceutical Manufacturing Plant

Bruce Bickle

Bernard McGarvey

Abstract: As with any complex system, the day to day decisions require to run a manufacturing operations systems involves the need to understand and manage the dynamics behavior associated with such systems.  Without a thorough understanding of these dynamics, it is intervene and what the optimum intervention polices should be. The natural dynamics of the system play a crucial part in deciding how the management control systems should be set up. A dynamic model can be used to gain the understanding that is required to better manage operational systems.

New Approaches to Learning and Teaching: Student-Centred Modelling with Visually-Oriented Simulation Packages

Adrian Boucher

Abstract: The techniques of systems thinking and system dynamics are rooted in the work of Forrester et al, developed over 30 years ago at the Massachusetts Institute of Technology.  Although well-established as a technique for analyzing the behaviour of complex systems in a range of academic disciplines, making system dynamics models operational until recently required the practitioner either to program a computer to solve a specific systems modelling problem, or to learn a procedural simulation language. More recently, the development of object-oriented modelling and simulation environments which run under graphics-based operating systems potentially offer more transparent approaches to modelling complexity by removing the high-level language requirement. Alongside these developments, recent policy changes in UK education in a context of tightened resource constraints, is requiring fundamental changes in the ways in which teaching and, especially, learning are undertaken. A possible solution to providing high-quality learning about complexity in dynamic systems is through adoption of the systems thinking and system dynamics paradigms, using object-oriented modelling and simulation software models which enable students to explore the behaviours of systems in a self-directed manner. One school of thought argues that developing systems thinking skills is as important a life skill as acquiring functional literacy, numeracy and computeracy, but until very recently, relatively few educators had adopted this approach to learning and developing students’ understanding. Work on this approach in pre-university education in the United States has indicated some success in inculcating cognitive skills development and metacognitive development in problem-solving. This paper will report current and future directions for research, development of a national resource bank for teaching and learning about finance in secondary schools, together with materials relevant for non-specialist undergraduate study, and for lifelong, continuing education.

A Management Flight Simulator for Strategy Communication and Organizational Alignment

David Bridgeland

Dorothy Yu

Mitesh Suckak

Abstract: Our client, BellSouth Telecommunications, is facing dramatic changing in the market place, Until recently, BellSouth, a multi- billion dollar regional telephone provider based in Atlanta, has been operating under a regulated environment in providing local land-line services. With the accelerated deregulation of the US telecommunications industry, it is now facing increased competition from long distance telephone providers, other regional providers and new players in the industry.  Competition from cellular phone companies is also increasing as the quality of wireless communications continues to improve and the cost continues to decrease, In addition, new technology is making it possible for other companies with a wire to the house- cable television providers and electrical utilities- to offer local telephone access.

Mass Learning: An Application of System Dynamics

Augusto Carena

Dharma Sri

Abstract: Large training programs, involving hundreds, and often hundreds of people in different countries, often include common basic educational layers ( e.g. general management modules) to be delivered to all the population before or besides specific training. While multimedia tools and distance learning are under experimentation, several programs still use human tutors, and the most huge of them still need to make use of a tech-to-teacher approach. In order to make this approach effective, several goals, often conflicting, have to be stimultaneously followed. This paper described how a System Dynamics model, embedded in what is known as a learning laboratory- although with a less common protocol- had been used to support a general management course in a very large re-training project.

Assessing the Efficacy of Microworlds for Promoting Systems Thinking

Steven A. Calvaleri

James A. Thompson

Abstract: Constructing a systems dynamics model and analyzing its behavior is a well documented practice for enriching the builder’s mental model. When there is a larger audience for the use of a model- for example, to help transfer the builder’s discoveries- modelers can construct an interface that allows a user to change parameters in a model. Depending on the interface design, these microworlds (or management flight stimulators) may be useful to introduce a larger audience to some of the concepts of systems dynamics and systems. Our work examines the use of such microworlds to boost system dynamics skills in the classroom and strategic thinking in commercial settings. The users report that microworlds are useful tools for helping them to grasp and master the intended concepts.

Linking the Film to its Environment: A System Dynamic Approach

Martin L. Cloutier

Steven T. Sonka

Randall E. Westgreen

Abstract: N/A

Using System Dynamics to Determine the Return on Investment in Engineering Information Technology

Vera J. Cole

M.K. Hughes

Abstract: N/A

A Study of the Manpower System of a Shell R&D Laboratory

Seetha Colemann-Kemmula

Abstract: Systems Thinking, Archetypes and Modelling have been used to understand the dynamics of the manpower systems of a Shell Research Laboratory with the aim of assisting the management team in developing and testing policies which secure the long term health of the lab. The study starts with a search, within the boundaries of the system for sources of leverage which could create steady, non-cyclical demand for out services. Demand for our services is created by healthy business performance and the perception by the sponsors that the lab provides good value for money. Higher demand for our services increases our opportunities for renewal of R&D programmes and budgets and in turn more or better products and services. However if the starting point is poor business performance everything will decline. Either way this constitutes a reinforcing loop.

The Strategic Dynmaics of Counter-Insurgency Warfare

R. G Coyle

C.J. Miller

Abstract: N/A

The Pull Control Systems:  A System Dynamics Perspective

Adolfo Marquez Crespo

Rafael Ruiz Usano

Jose Manuel Framinan Torres

Ricardo Zubiria de Castro

Abstract: The goal of this article is to build a Systems Dynamics model of a production lime under long-pull control systems, These models are presently being completely tested under different scenarios. The long- pull control systems appear to offer a higher performance than KANBAN based systems in those environments whose perfect material flow cannot be assured.

Systems Dynamics as a Methodology for Sustainable Coastal- Zone Management

Jean- Luc de Kok

H.G. Wind

Abstract: The central aim of the multidisciplinary WOTRO research program is to develop the scientific knowledge required for the sustainable utilization of the coastal resources in tropical countries. The study area consists of the coastal zone of South – West Sulawesi, Indonesia. Most coastal- zone polices are implicitly based on the expected interaction between natural and social processes, many of which have been the subject of detailed scientific research in the past. However, a methodology suitable to apply this knowledge to support the integrated management of coastal resource is still lacking. A quantitative system approach is followed for the management component of the project to deal with the dynamic nature of the coastal- zone processes and cross-sectoral linkages. The integration of the theoretical concepts developed by the social scientist of the project in a quantitative system network is less obvious than for the natural science. The fisheries sector is one of the key elements of the coastal -zone system in which human behavior plays a role. The increasing fishing effort and introduction of destructive fishing practices have lead to severe overfishing of near coast fishing of near coast fish resources. A number of policy options are available to deal with the problem including mesh size and efforts restrictions catch quotas and the installation of marine parks. The effectiveness of these regulations depends largely on the cooperation of local fisherman. Fisherman may decide to increase the number of fishing trips above the sustainable level unless the imposed sanction exceeds the surplus profit and are effectively enforced. The perception and fishing effort of individual fishermen can be considered as the net result of the expected social and economic cost and benefits [1]. A simple bioeconomic model for the exploitation of a fish stock will be used to show how human behavior can be included in a quantitative system model in order to analyze an effort restriction policy.

Spatial Modeling of Urban Dynamics

Vassilios K. Despotakis

Maria Giaoutzi

Abstract: Nowadays, one of the basic conceptual tools for analyzing the economic, ecological and social aspects of urban dynamics, is the paradigm of sustainable development (Giaoutzi and Nikamp 1989, 1993; Nijkamp 1990; van den Bergh, 1991). The basic tool on the other hand, which has been extensively used to analyze spatio-temporal aspects of urban dynamics, during the last decade is the Geographical Information Systems (GSI)  (Burrough 1983, 1991; Dangermond 1990, Despotakis, 2991a, b). These two approaches can be linked into an integrated tool which aims to sustainability to GIS. Spatial non-dynamic dispersion and spatial diffusion models have previously been constructed by various researchers such as in the Hagerstrand model (Morril et al., 1988) gravity models (Haynes and Fotheringham, 1988; Trevor and Munford, 1991), transportation models (Wemer, 1988; Hagishima et al., 1987) etc. In all these models the development process is regarded in a non-dynamic perspective and the object propagation in space due to this development is calculated by the perspective and the object propagation in space due to this development is calculated by the deterministic models at any specific time point. Spatial flow models that used only the distance as a spatial parameter indicated strong spatial correlation of the model residual. (Baxter, 1987). Therefore, model misspecification may occur when not all spatial registrations (e.g., a 3-D local or national reference coordinate systems) are properly taken into account. On the other hand, several studies using GSI for monitoring (mainly urban) development have also been carried out in the past (Meaille and Wald, 1990; Lo and Shipman, 1990). These approaches despite the fact that they give very useful results for monitoring urban development, do not incorporate scenario generation techniques, so that the regional sustainability criteria can be applied, not only in an “external event” scenario mode but also in a “policy” and “behavioural” scenario mode. Finally pioneering studies in applying GIS to “conservation databases generation” (a concept that is close to Spatial Dynamics considerations) have also been conducted in the past (see e.g., Ahearn et al., 1900), but again the spatial dynamics have not been considered. From the above discussion follows that a missing node exists between the field of geographical information systems (GIS) modeling and the non-spatial SD modeling which will integrate both fields in a dynamic sense. In the paper the aim has been to provide this link in both a theoretical and practical sense.

Decision Making in a Small School District: A Case Study Employing Principles of Systems Thinking and iThkink

Michael R. Deweese

Abstract: N/A

Proactive Maintenance and Reactive Repair

Ernst Diehl

Abstract: Each month a major telephone company receives 200, 000 calls from customers who have a problem with their telephone service. The company places a high emphasis on reducing the repair cost caused by high volume of complaints. Using a simulation model, the company wants to understand how more proactive maintenance can reduce the need for repair calls. The simulation model presented in this paper reveals that within a proactive maintenance we need to distinguish between at least 3 different policy levers: (1) Discover the problem before the customer notices it: (2) Do the repair with such a quality that you do not have to repair the problem twice.; (3) Make your physical plant more reliable. The stimulation model allows the company to allocate investments in each of the 3 areas and to test which investment mix fits the overall company objectives best.

Measuring the Effects of Systems Thinking Interventions on Mental Models

James K Doyle

Michael J. Radzicki

W. Scott Trees

Abstract: The concept of mental models has been central to the practice of system dynamics since its inception. When system dynamicists intervene in educational or corporate settings to help people become better systems thinkers, they typically begin by “surfacing” the participants’ mental models to make assumptions explicit and to assist the model building process. And, changing mental models to make them more complete, consistent, and dynamic is typically one of the primary goals of the intervention. It is the purpose of this paper to describe the limitations of currently available techniques for eliciting, changing, and measuring changes in mental models of complex systems. In particular, when designing its techniques for studying mental models, the system dynamics community has not taken into account recent development in the fields of cognitive psychology and the procedures for collecting unbiased data from human subjects. In addition, despite the compelling need for rigorous scientific evaluation of the effectiveness of efforts to improve systems thinking (Cavaleri and Sterman, 1995; Ganter, Doyle, and Radzicki, 1995), current interventions typically fail to include rigorous follow-up measures of the changes in mental models they claim to bring about.

System Dynamics Model of a State Highway Management System

Donald R. Drew

Allan D. Chasey

Jesus M de la Garza

Wonkyu Kim

Abstract: A System Dynamics Model of a State Highway management System (HMS) is developed to serve as an instrument for guiding policy-making planning, budgeting, and programming for the Virginia Department of Transportation (VDOT). The HMS consists of five subsystems and a Management Information System (MIS) to determine model parameter values. Results of the simulation runs can be obtained according to existing procedures and trends, impacts of alternative economics forecast, budget sizes, budget allocations, programming allocations between construction and maintenance, and various allocations within maintenance.

Competitive Advantage Through Knowledge Management: A System Dynamics Approach

Stephen A. Drew

Peter A. Smith

Abstract: The knowledge-based resources that a firm controls and leverages for competitive advantages are increasingly critical to success in the marketplace. However, the nature of these assets and their dynamic systems interactions are still poorly understood. This leads to undervaluation of their competitive worth, and even worse, counter-competitive management of the assets themselves. This presentation describes a system dynamics model, and resulting flight stimulator, which relate human and technical aspects of knowledge management with customer satisfaction and market penetration. The model was based on field-work with knowledge-management practitioners. The generic flight simulator provides decision makers with a low-risk dynamic practice field, where dialog, exploration of mental models, and organizational learning concerning knowledge concerning knowledge management are catalyzed. Although the simulator is not intended for prediction, participants do gain practical insight into important strategic and operational concerns, such as how can one know if a firm is leveraging its knowledge assets to best achieve long-term customer acceptance?

The Mexican Petroleum ‘Play In Two Acts’: Taking Hold of Oil Productions Data

Richard C. Duncan

Abstract: Imagine for a moment, that you’re viewing act #n of a stage play. Thus, you know the outcome of the first (n-1) acts, and the very latest status of act #n, now in progress. From this information, you’d like to predict the outcome of the present act and, if possible, the outcome of the whole play. Metaphorically speaking, that is what this paper is all about.

Development of a Systems Simulation Platform to Analyze Market Liberalisation and Integrated Energy Conservation In Colombia

Issac Dyner

Derek W. Bunn

Abstract: With energy markets throughout the world moving rapidly into re-structuring, liberalisation and privatisation, this presents a major challenge to traditional modelling approaches. Econometric methods have limited applicability for a new environment and optimisation techniques of “planning” are less relevant in an era of market forces. This paper presents the use of system dynamics, in a generalised way, to provide a platform for integrated energy analysis. Issues of modularity and policy evolution are important in the design of the system to facilitate its use, and reuse. In the 18 months since this work began for the Colombian Ministry of Energy, it has had to evolve to support the analysis of a number of changing perspectives and constraints. Hence the concept of a platform rather than a model has to be implemented in a coherent way if it is going to provide sustained value for on-going governmental policy support.

Molecules for Modelers

Robert L. Eberlein

James H. Hines

Abstract: Molecules are the building blocks from which good system dynamics models are built. By the delineating and organizing molecules we are creating a new body of knowledge that will make it easier to learn modeling and provide a vehicle for focused discourse on the nature and quality of model formulation. By implementing these ideas in software we make it faster and easier for novice and experienced modelers to develop high quality system dynamics models.

An Approach for Understanding Learning and Decision Making in Complex Dynamic Systems

Fredrik Elg

Abstract: People often fail in controlling complex dynamic situations. Research on dynamic decision making serves the purpose of learning about how people come to think, learn and act in complex dynamic and opaque situations, where the general objective is to draw general conclusions about the nature of task and differences between people in learning and decision making. Dynamic decision making research differ from traditional decision making research by explicitly addressing issues of feedback in the task. For a definition of dynamic decision making see Brehmer (1992). Introducing concepts from systems offer new possibilities for research on dynamic decision making by presenting a framework for understanding real life systems. Systems dynamics also offer a possibility to provide transparency to complex microworlds, provides ideas on how to improve learning in and about complex dynamics systems and, finally, systems dynamics methodology can be used to ease microworld construction and improve aspects of ecological validity. The full version of this paper deal in more detail with the research on dynamic decision making and issues on the development of methods for understanding learning and decision making in and about complex dynamic systems.

Dynamics Modeling of Product Development Processes

David N. Ford

J.D. Sterman

Abstract: Development products faster, better and cheaper than competitors has become critical to success in many markets whether the products is an office building, software package, or computer chip. This has made the performance of product development projects an increasingly important area of competitive advantage. In response to these pressures many industries have shifted from a sequential, functional, development paradigm to a concurrent, team based paradigm. Increasing concurrence and cross functional development also dramatically increases the dynamics complexity of product development (Smith and Eppinger, 1995). But the mental models used by developers and managers to evaluate, estimate and mange projects have not generally improved to include dynamic influences on performance. The resulting lack of understanding (Diehl and Sterman, 1995; Sterman 1994; Paich and Sterman, 1993) and inadequate decision heuristics (Kleinmuntz, 1993) have contributed to the frequently cited management of development projects (Womack, Jones and Roos, 1990)

A Hard Look at Social Security

Nathan B. Forrester

Abstract: Past payment of social security taxes entitles no one to future retirement benefits, either legally or financially. In 1960 the US Supreme Court ruled in Fleming v. Nestor that workers have no property rights to past contributions or anticipated benefits. Furthermore, the Trustees and Actuaries of the Social transfer system, not a fully-funded retirement system. Current benefits are funded from current social security contributions. All future benefits will be funded by future taxes or future borrowing.

Simulation’s Evolving Role in Management

Alan Fowler

Abstract: The paper argues that simulation techniques, while traditionally having been widely applied in Science and Engineering, have not yet attracted a corresponding degree of uptake in ‘softer’ management applications. Systems-thinking and its associated ‘toolbox’, stimulation, have featured prominently in the systems literature for three decades or more and the question must therefore arise as to why the take-up of such a potentially powerful aid to management-planning and decision-making has traditionally proved so sporadic and sluggish amongst business practitioners? This question along with a review of current trends illustrated by some basic examples, underscore the logic of this paper.

Demand Forecasting System for Suburban Railway Project Using System Dynamics and Geographical Information System

Atsushi Fukuda

Hironori Suzuki

Takahiro Kojima

Shigeru Koyama

Abstract: N/A

Traffic Engineering Class for Techincal College Students Using STELLA

Atsushi Fukuda

Yoshio Hanzawa

Ryoichi Ebisawa

Abstract: N/A

Reputation in Banking and Deposit Insurance: the Dynamics of Browsing and Lending under Regulation

Fernando Gascon

Abstract: Debt contracts are cost-efficient rules designed to control opportunities behaviour on the part of managers, who are assumed to have better information than lenders. Although contracts are imperfect, in practice mangers voluntarily forbear from many kinds of opportunistic actions. They do so because the reputation for forbearance is valuable to them and their firms. A concern for reputation would help to align the interest of lenders and stockholders. Game theoretic approaches have been applied to explain formally how reputation is created and maintained in a multiperiod scenario under very restrictive initial assumptions. An S.D. approach is considered studying the dynamics and feedback effects of the borroer-lender relationship, modelling the behaviour of “Banco Herrero”, a Spanish local bank when dealing with its customers and the regulator.

Using Groupware Technology to Facilitate Team Model Building and Learning

Shane Gary

Chris Charyk

Abstract: Mental knowledge database or mental models must be captured, synthesized, and communicated to all team members in the model building process to ensure team learning and a successful modeling project. These mental knowledge database bridge model development and team learning, were interactive model building is intimately intertwined with updating mental models of the team. This paper introduces groupware technology as a tool for facilitating and enhancing this process by providing an electronic forum for team members to capture and share all relevant information. The end result is a model which is truly owned by the team and an electronic database archiving team learning over the course of the project. The electronic database archiving corporate knowledge of the issues discussed, and serves as a corporate memory when others are interested in how the team arrived at their conclusions. This paper illuminates the use of groupware in system dynamics modeling projects and discusses cases where this approach can be utilized.

A Microworld of Exploration and Development: Creating a Learning Laboratory for the Oil & Gas Industry

Peter J. Genta

Neville Sokol

Abstract: Much has been written of the use of computer simulation coupled with an interface as part of learning laboratory. Thorough the use of a fun and easy-to-access interface participants can explore the system principles at play in their own work environments in a structured workshop setting. But do these learning laboratories bring about change in the way managers make decisions? The authors will discuss the success they have had in introducing teams of managers to the concepts of system dynamics through the use if computer simulation. Over the past four years, the authors have worked with six teams within two separate oil and gas companies. These efforts have led to significant changes in the way the team members look at their business and the choices they have made to prepare themselves for the future. This cumulative experience has provided the foundation for the release of a commercially available “Microworld” which allows the user to experience the dynamics of running an oil and gas exploration and development company. This software eliminates a good portion of the up-front time and expense needed to get to a meaningful system dynamics model of a business. It is expected that incorporating this simulator in a workshop setting will provide a quick and effective method to introduce the concepts of system dynamics to an industry that is in the midst of a great deal of change.

Globalizing High Sulfur Fuel Oil Marketing

Nicholas C. Georgantzas

Stephen H. Brovarone

Abstract: The process of building a system dynamics simulation model helped competing in the HSFO (high-sulfur fuel oil) market add US $120,000 per day to its revenue, yielding a sustainable increase in profit of 62 percent. These benefits resulted from globalizing its HSFO marketing strategy while building a new internal competency, namely using system dynamics models to support strategy design.

Reengineering Business Process Reengineering with System Dynamics

Nicholas C. Georgantzas

Abstract: The breakthrough by Shingo to depict production as a net of processes and operations is a rather brilliant visualization with practical implications for business process reengineering (BPR). Shingo’s framework not only helps unearth and negate the dysfunctional effects of Anthony’s paradigm on management systems but also constitutes a powerful conceptual front end for system dynamics interventions.

System Dynamics Approach to Validation

Branko Gricic

Ante Munitic

Abstract: Model validation is a problem that both social and natural sciences have been facing with for many years. During the last decades it became particularly pressing in social sciences due to the development of contemporary complex tools for the modelling of real social systems. The systems dynamics methodology is one of these new tools. Although it has been developed through relatively long period of time, it was rather “closed” for critical opinions especially those referring to the validation of systems dynamics approach to models validation. It takes into consideration all relevant discussions about this matter, as well as some of the procedures and criteria used so far in the system dynamics models validation. Moreover, based on the evaluation of their advantages and disadvantages, certain formal criteria are provided aiming to strengthen the credibility of these models.

Providing Simulation Models on the Internet

Andreas Groessler

Abstract: That managing organization and mastering their environment has become a complex (sometimes chaotic) task is generally accepted. Also well known is the sufficiency of the human mind in dealing with such complexity (which has a variety of reasons, for instance the limited capacity of our short time memory, Miller 1956, or misperceptions of feedback structure, Sterman, 1989). One prominent way to let people improve their skills to act successfully under these circumstances is to be busy with computer models (Dorner 1992, pp 37-309). Through the simulation of organization and dynamic and chaotic aspects of reality. These so called Microworlds are supposed to be efficient means to improve the mastering of complex business systems (Senge 1990, pp. 313-316).

Designing Strategies to Achieve Sustainable Growth for Biotechnology Companies

M. Grossman

Abstract: Most new companies are faced with dual hurdle of developing their capabilities while dealing with financial constraints of not having an established revenue stream. This is especially true in the Biotechnology industry, where technological competence in research is a key success factor, but the benefits of research are often not realized for over a decade. This study uses a system dynamics framework to investigate viable growth strategies for a young biopharmaceutical research company in terms of the expansion of both its technology platform, as well as its proprietary programs.

Studies of a Model of Entertainment Between Economic Cycles

Juan Hernandez Guerra

Abstract: This work carries out an analytic study of a two-sector model previously developed by Kampmann et al. (1993). This model explains why two capital producing sectors with initially different cyclical motions of the model will be one cyclical mode. Some new insight into the motion of the model will be shown. All the introduced assumptions and results were tested by simulations.

Systems Thinking and Systems Dynamics in the CC-STADUS High School Project

Scott Guthrie

Diana Fisher

Abstract: This paper will be written from two perspectives, that of a science teacher teaching a year long course in system dynamics modeling, and that of a math teacher teaching the same type of course in another school. The difference in the approach will become evident in this paper. Both authors have software for designing models.

Using a Corporate System Model of a Firm to Investigate the Feedback Dynamics Leading to Growth, Decline, and Bankruptcy

Roger Hall

M.P. Gupta

Abstract: This paper presents the outline of a system dynamics corporate model of a representative manufacturing firm to be used to study the feedback dynamics leading to growth, decline and the likelihood of going bankrupt. The model comprises human resources, customers and sales, operations, budget, accounting, cash flow, finance, shares and bankruptcy propensity sectors that are heavily interactive. The driving forces of growth or decline are related to the ability of the firm’s management to raise the necessary resources for working capital, capital equipment, human resources training and etc. that will ensure its long term viability. Viability is measured by Altman’s ‘Z’ composite score based on financial ratios that has been shown to reliably indicate the likelihood of bankruptcy. The ability of the firm’s management to negotiate bank loans and raise capital through shares offers is governed by the owner’s, banker’s and shareholder’s perceptions of the viability of the firm. The ‘Z’ score is used as a surrogate measure of this. Trials will be run to investigate effects of management interventions on the feedback dynamics causing growth and decline.

Local Decision Rules: Complexity or Chaos?

Tim Haslett

Charles Osborne

Abstract: This paper examines the impact of “local rules” on the stability and performance of a manufacturing system. The ability of systems to maintain themselves in, and move between, stable, complex and chaotic states has been widely documented. (Gleick, 1986, Waldrop, 1992). The Beer Game is an example of a social-technical system that quickly moves to and maintains itself in a chaotic state as a result of the “local rules” used by the actors. (Thomsen, Mosekilde, and Sterman 1992, Paich and Sterman, 1993). Other research indicates that such “local rules” can produce “edge of chaos” states where systems are responsive and adaptive (Langton, Taylor, Farmer, Rassmussen, 1992).

Three Simulation for Teaching Systems Thinking

Tim Haslett

Abstract: This paper outlines the application of computer simulations in the teaching of systems thinking in two situations: in academic context in the teaching of Strategic management : in a Graduate Management program at Monsah University and in the business context in the management development programs at Carlton and United Brewing which is part of the Fosters Brewing Group.

A Flight Simulator for University Department Planning

John F. Hermann

John L. DeOlden

Abstract: A simulation model for university department planning is presented that allows department chairs, faculty, or administrators to “test fly” their decision choices for key variables in the model, observe the impact of these choices, and learn how to improve systems performance, given their respective objectives. Simulator “pilots” have control over average class size and faculty teaching load, and they can observe the impact of their decisions on a number of system variables such as enrollment, percentages of classes taught by part-time faculty, and the number of full-time faculty.

Parameter Estimation Involved to System Dynamics Model by Multi-Objective Optimization Technique

Tohru Higuchi

Abstract: In this study we tried to estimate unknown parameters in a System Dynamics Model by optimization technique instead of trial and error. As the number of unknown parameters increases, it is difficult to estimate them by trial and error because the number of combinations of them increases rapidly. It follows that model builder are often forced to identify them subjectively. That’s a weak point of Systems Dynamics Models- lack of model validation. We had tried to optimize controllable parameters on the basis of some objective functions. (2) (3) We applied this parameter optimization techniques to parameter estimation. The unknown parameters were estimated by using observational data as econometricians usually do in especially simultaneous decision models. A simplified Inventory Control Model which included two unknown parameters is used in this study.

Modeling the Evolution of Organizations

James Hines

Abstract: N/A

Competitive Dynamics: Context, Model, Outcome, and Ongoing Use

James H. Hines

Dewey Johnson

Abstract: N/A

Enterprise Modeling at ETS: Highways and Biways

Jack Homer

Fred Nichols

Abstract: Educational Testing Service, the world leader in standardized educational testing, has begun a transition from paper-and pencil testing to computer-based testing. This transition is a complex undertaking affecting the entire organization, and will require several years to complete. An integrated enterprise model has been developed to assess financial impacts of the transition and to look for better ways to manage it. Smaller side models have also been developed for exploring a few key issues individually in greater depth and with more elaboration than the large model would allow. Such a mixed “highways and byways” approach to modeling allows one to achieve a solid final product while providing useful, engaging insight along the way.

Evaluating the Policy of Stratospheric Ozone Protection- a System Dynamic Modeling Approach

Naiyi Hsiao

Abstract: Environmental pollution and its protection have become significant yet controversial issues on the government agenda. The environmental pollution issue occurs mainly because individuals pursuing their own private interests may collectively generate public costs. Because of this market failure, governmental intervention to reduce the harmful impacts of private actions becomes inevitable. Policy implementation tools, such as regulation, are often the core of public intervention. Through the tools, the government attempts to change the behavior of the target population in favored directions.

Evaluating Group Model Building in Mental Health Vocational Services

Steven Huz

David F. Andersen

George P. Richardson

Roger Boothroyd

Abstract: In recent years, facilitated systems dynamics group model building has been used to facilitate and support decision making in management teams working to solve complex problems in both private and public sector setting. This approach is considered to be an important tool for improving the systems thinking and decision making capabilities of participating managers. The goal of these interventions is to strengthen a teams’ ability to work towards developing an agreed upon course of action that will ultimately lead to resolving the problems at hand. Although there are strong indications that these approaches provide great benefit, little research has empirically explored the degree to which group system dynamic model building successfully facilitates this outcome. In New York State, a system dynamics group model building strategy is being systematically examined as an approach to promote public sector system change in mental health and vocational rehabilitation service to promote public sector system change in mental health and vocational rehabilitation service delivery systems.

A System View of Design Engineering Capacity: Continuous Improvement Policy Interaction

Anil B. Jambekar

Abstract: With many companies implementing continuous improvement policy to enhance all company operations, everybody is knocking on design engineering’s door because ‘coordinated up-front design engineering plays a central role in enhancing the performance of re-engineered or improved manufacturing process. Today many manufacturing strategies embrace the goals of reducing “time to development”, “time to ship”, “defects per million,” and “cost” every year. The articulated associated policies create pressures on various manufacturing divisions, design engineering, and marketing and product planning to respond by continuous examinations of their operations for potential improvements or re-engineering. The consequence is production of the design work-load that some times far exceeds existing design capacity. This clearly emerges as a management problem that has been viewed in this paper through systems thinking lens.

Systems Thinking in Industrial Design

Wolfgang Jonas

Abstract: An earlier work of the author (JONAS 1994) proposes a systems theoretic framework for design. It seems to be possible to describe design as a cyclic multilevel (society, sub-systems, companies, teams, individuals) communication process of production and consumptions with partly deterministic/ controllable and partly self-organizing areas. It was possible to verify certain hypotheses comprising elements in two adjacent levels (or better: to reproduce certain observations) by means of system dynamics (Stella II Version 2.2.2). Emergence-and-attractor-phenomena could be visualized. Theory building is continued (it seems necessary for design to avoid adopting a brand new stylish theory every decade), but without using simulation tools, at the moment.

Comparing Improvement Programs for Product Development and Manufacturing: Results from Field Studies

Andrew Jones

Elizabeth Krahmer

Rogelio Oliva

Nelson Repenning

Scott Rockart

John Sterman

Abstract: The research described in this paper is part of a study being led by John Sterman and Nelson Repenning at the Massachusetts Institute of Technology. The overall study explores why even initially successful improvement programs often fail, and aims to help practitioners in designing sustainable improvement programs.Due to its role as part of this larger effort, the inital research has focused on exploring direct parallels with the case of Analog Devices as well as searching for additional tight interdependencies between improvement programs and a company’s other organizational functions and routines. This paper focuses gives an overview of our research sites and the maor findings from the research. For a detalied description of research objectives and methods see Sterman et. al (1996) or visit or website.

Reactive vs. Proactive Corporate Environment Management: A System Dynamics Learning Environment

Luis Jordao

M.P. Antunes

R.F. Santos

Abstract: New realities are leading an increasing number of businesses to discard their old managerial perspectives and practices with regard to the natural environment. Among them, a major role is played by increasing pressure from the public, more stringent environment regulation, threatening civil and criminal enforcement measures, change in consumer preferences, new business opportunities and the development of cleaner production technologies. Tomer (1992) stresses the role of some of these factors in the stimulus to the development of new managerial approaches, specifically in the recognition of environmental management as an important functional area, that is taking place alongside traditional areas such as marketing, finance, R&D, and manufacturing. In support to this development, courses on environmental goals within their overall corporate strategy.

Crime and Astonishment

Timothy Joy

Abstract: Traditional education long ago stripped its students of tools of integration; indeed, integrated or interdisciplinary studies take place almost exclusively in pre-school and, later, post-graduate work-the sixteen or so years in between stretch out as a wasteland of discrete, rudimentary tasks bearing little or no connection to any other discipline of one’s education or aspect of one’s life. Our American methodology of keeping subjects separate had dismembered their world, served it up to them as lab reports and vocabulary lists and odd-numbered math problems and history work sheets and standardized test easily graded by Scantron machines. Sometimes there was knowledge, but rarely understanding. What it-along with other factors-produced was a rising illiteracy, a thorough sense of confusion and uselessness about education, and a weeping boredom by about third or fourth grade.

Analysis and Business Cycles in the U.S. Machine Tool Industry

Robert Kallenberg

Charles H. Fine

Abstract: Cyclicality is well-known phenomenon in many capital goods industries. It is especially pronounced in the machine tool industry where peak-to-peak in incoming orders often exceed 100% of mean sales. While extreme cyclicality in the machine tool industry and its resulting problems are well documented (Bowen et al. 1989: Dertouzos, Lester and Solow 1989: Neary 1993), the underlying causes and the potential levers to reduce it are so far not well understood.

Feedback Loop Gains and System Behavior

Christian E. Kampmann

Abstract: The method of system dynamics has relied extensively on feedback loops to explain how system structure leads to pattern of behavior. Yet, beyond simple classroom examples and as guide to intuition, the concept has never been fully developed for large-scale systems with many loops. If the theory of how feedback loops lead to behavior can be developed to the point where it can be implemented as a computer algorithm, it would be enormous help both in analyzing dynamics and explaining results.

The Implementation of a Large System Dynamics Model of Human Behavior

Michel Karsky

Stephane Copin

Sonia Pitrach

Abstract: A large model describing the dynamics the dynamics of human motivation is currently being implemented as a Learning Environment. This implementation and the corresponding use of the model by young mangers of future managers generated interest but also problems. Some of he reactions to this novel approach are described in this paper.

The Dynamics of the Zero-Emission Vehicle Industry

Yahia F. Khalil

Michael Radzicki

Abstract: The Fresh Clean Air Act of 1990 stipulates that states must meet certain air quality requirements during the decade of the 1990’s and beyond, and those states choosing to require the sale of Zero Emission Vehicle (essentially electric vehicles) to help meet the standards must follow the mandates put forth by the California Air Resources Board (CARB). CARB originally mandated put forth by the California Air Resource Board (CARB) CARB originally mandated that 2% of the vehicles offered for sale in California be zero emission in 1998, 5% be zero emission in 2001, and 10% be zero emission in 2003. Recently however, CARB voted to ease the mandates although 10% of the vehicles offered for sale on California must still be zero emission in 2003, automakers may decide for themselves how many ZEVs to sell in California before 2003. The mandates were relaxed because automakers convinced CARB that current ZEV technology cannot meet the needs of the mass consumer market. Massachusetts, however, has voted to maintain the “2% in 1998” mandate, regardless of what California does.

How Heuristic are Heuristic Decision Rules in a Dynamic Game?

Doa Hoon Kim

Dong-Hwan Kim

Abstract: N/A

Dynamics of Networks: System Dynamics Model for Network Externality and Critical Mass

Dong- Hwan Kim

Jae-Ho Juhn

Abstract: Information age comes with network: broadband networks of telecommunication and cable TV, networks of hardware and software, networks of electronic money services, networks of Internet web sites. Recently, some economists have developed a systematic approach to analyze the characteristics of networks. They introduced the concept of network externality and critical mass as building blocks for explaining the positive loop characteristics networks (Katz & Shapiro 1985: Economides 1955). However, their economic model is far from complete and dynamic. Paradoxically enough, the economic model of networks is based on the concept of equilibriums which oppress dynamic behavior of network evolution. In this paper, we developed a system dynamics model of networks focuses in the equilibrium state of networks, the SD model of networks focuses on the historical path towards the evolution of networks.

Use of Simulation in Management and Management Education: Speeding up the Wheel of Learning?

Ulli H. Koenig

Abstract: The shortening of product life cycle is one of the big problems to be solved in the 1990s. So a lot of energy is used to speed up the R&D-processes put more flexibility to the production line. Time is not the only key-variable of the R&D-process and the production, quality and individuality of the products are getting more and more important. These variables are not only significant for production and the R&D but also for decision making. The classical way to enhance the quality of decisions is the use of decision-support-systems (DSS), often based on artificial-intelligence (AI). Another tool to improve the effectiveness of decision making is management simulation. These tools are used to assist the decision maker with the goal of “better” results.

Evaluation of Neutral Networks via Generic Modelling using System Dynamics

Ralf Koerstein

Bernd Viehweger

Abstract: We present an architecture of a software-system for computer based experiments with neural networks. For generating the data we use models on the basis of the theory of Systems Dynamics. Practical experience was received in experience with different neural networks and various amounts of data from the well known fishing model. The results can be useful for the evaluation of neural networks.

Carbon Sequestration and Emission Management: A Costal Rican Case Study

Elizabeth M. Krahmer

Scott Rockart

Abstract: Global climate change has become a major concern for international and national policymakers. Costa Rica has taken a leadership role by announcing an integrated national environmental strategy, including some management of its carbon emission and sequestration. The Costa Rica Carbon Management (CRCM) model is intended to assist national policymakers understand the long-term interactions between the economy, the population and natural processes influencing the country’s net carbon balance. The model was originally developed as part of the Business Applications in System Dynamics course at the Sloan School of Management MIT. An expanded MIT modeling team with the support of the center for Sustainable Development of the Universidad de Costa Rica (CIEDES) and the Central American Climate Change Program, is now working to (1) enhance the feedback relationships within the land use and energy sectors and between the economy and the remaining sectors, (2) obtain better estimates of parameters in the model, and (3) develop more realistic policy scenarios.

An Interactive Simulation of a Manufacturing Enterprise: Prelimimary Observations

Phillip Kunsberg

Abstract: The Advanced Research Projects Agency has sponsored a partnership between the Los Alamos National Laboratory and the University of New Mexico to develop a dynamic systems model of a manufacturing process. The main goals are to design a computer model that can be used in graduate education of students in business and engineering and that can be also served as a analytical and planning tool for managers in the US manufacturing sector. A central feature is the use of interactive simulation, where key decision-makers each control dynamically linked sub-models. The promotes a better understanding of the human dimension of complex systems and allows exploration of both teaming and competitive scenarios. At the time of this writing, we are lessons, at the least from our perspective, about the utility and the proper sphere for system dynamics modeling.

Can We Have Confidence in Generic Structures?

David Lane

Abstract: Generic structures are central to the aspiration of our field. System dynamics has an explicit goal: to create integrative theories (= models) of different social systems which then make it possible both to understand specific situations and to produce generalisable insights (Forrester, 1961). To a large extent progress towards this goal has involved the use of generic structure causes some confusion because of the range of model types to which this term is applied. Recently this concept has been divided into three sub-definitions, a troika of interpretations ‘generic interpretations’ which aims to offer a sharper statement of style, purpose and application (Lane & Smart, 199). This work leads directly to the question of confidence. How can a group have confidence that a generic structure can be of use to them? How should researchers judge whether something qualifies as a generic structure? This paper attempts to advance debate on both of these questions. The aim is to explore the extent to which we can support our current confidence in generic structure and to indicate means of improving that confidence.

Learning from Microworlds Environments: A Summary of the Research Issues

Paul Langley

John Morecroft

Abstract: The system dynamics community is interested in the ways in which modelling and simulation tools may be used to enhance learning about complex dynamic systems. We hope that this enhanced learning will result in more robust policy making, i.e., improved decision by the policy maker, and henceforth subsequent improvements in organisational performance (as measured by revenues, profit, market share, returns on sale, returns on capital invested, improved social welfare, and so on). There is general consensus within the SD community that the process of building and simulating formal models is a valuable team learning activity for participants involved in the model building activity (Morecroft and Sterman, 1994)

Energy Capacity Management for the Industrial Sector of Zhejiang Province in China: A System Dynamics Model

Hong Mou Lao

Abstract: A well-balanced and coherent energy strategy is to safeguard the conditions for economic development. Its importance has stresses the need for effectiveness and efficient energy management at a decentralized level. With the rapid economic development in the past decade, Zhejiang province as one of the economic hot spots in China, is facing the deterioration of energy shortage problem. Although energy supply capacity was increased several times, the trend is becoming more serious. This research focuses on the impact of energy supply and consumption pattern, and important factors that affect both patterns and the relationship between then and discussing the situation of energy shortage problems in the near future. System Dynamics is used to study the complex dynamic system. A system dynamic model was built to analyze the energy shortage problem and its effects in long run. The hypothesis applied dependents to the historical evidence and related knowledge. The model built is simplified with five main sectors: Industrial production sector, Energy demand sectors, Energy supply sector, Financial resource allocation sector, and Energy conservation sector, Some alternative policies are assessed through experiment with the model including finance, energy conservation, and production management policies, etc..
The Dynamics of Organizational Inertia, Survival and Change
Erik R. Larsen

Alessandro Lomi

Abstract: The main objective of this work is to use system dynamics to contrast two alternative visions of the organizational world. According to the first, mature organizations wield increasing power defense of their dominant positions. The implication of this view is that age and experience protect organizations from failure. According to second, old organizations became increasingly vulnerable to challenge by innovative newcomers. The implication of this view that with age and experience organizations become obsolete by progressively losing responsiveness and ability to take advantage of new market opportunities.
A System View of the Design of Modern Manufacturing Systems
Frank Lehmann
Abstract: The design of modern manufacturing systems is often discusses under the viewpoint of short term effectiveness and efficiency. The demands for the production system are often mono-casual and directly derived from the goals of the production, marketing, and material management. Due to the objective setting processes of those sectors the impact of the manufacturing system to the other members of the supply chain and the long term consequences for the own firm are rarely taken into consideration. To look at production systems from the point of a system viewer includes the necessity not only to take into account the direct effects of a decision like quality, costs, etc. Also the issues to and from other parts of the system like the members of the supply chain and the long term effects should be taken into the decision process. Therefore information about the connections and the effects of these parts of the system are required. The structure of the complexity of this system make it necessary to design a simulation model, Which can show the effects from the design of modern manufacturing systems to the firm and the supply chain. The presentation discusses the core structure and the basic results of a Vansim model, which is designed to inspect these aspects of modern manufacturing systems. After that a short view is taken on the possibilities and the limits of modelling production systems in System Dynamic generally and on the problems to design a simulation model that shows short term consequences as well as long term loop-back results.
The Spanish Glass Container Maker. A Model of Strategic Planning in a Firm
Adolfo Lopez Paredes

Alfonso Redondo Castan

Ricardo del Olmo Martinez

Abstract: This paper aims a training tool which permitting different simulated situation would increase the degree of motivation and learning which could be achieved starting from a purely theoretical position. Most interactive modelling tools can be employed in gaming situations and provide a contribution to training by simulating the real world environment. Our model was developed from glass container Spanish market, and it is possible running different simulation to discover the best prices policies. Market interactions are so complex that they cannot be intuitively appreciated. We studied the market composition, the demand evolution, the demand evolution and the prices searching the market structure for the model. The simulated results for a company are: market share, quality, return, costs and best price, capacity, and inventory strategic policies.
Automated vs. ‘Hand’ Calibration of System Dynamics Models: An Experiment With a Simple Project Model
James M. Lyneis

Alexander L. Pugh III

Abstract: A necessary part of any system dynamics analysis is the estimation of parameter values which best correspond to the real system. The method of estimating parameters for a typical system dynamic model usually involves two steps (with potentially multiple iterations in the second) 1. Make an a priori estimate based on direct observation, educated guesses by managers, or similar parameters in other settings (Graham (Graham [1980] refers to this as data {at or below the level of aggregation); and 2. Revise those estimates in the process of calibrating the model to aggregate data.
Discrete Versus Continuous Formulation: A Case Study Using Coyle’s Aircraft Carrier Survivability Model
Roderick H. MacDonold
Abstract: The issue of discrete versus continuous formulation of system dynamics models has provided for lively, thought provoking discussion among modeling practitioners for more than thirty years. As early as 1961, Forrester argued that models based in the philosophy that real systems re continuous. Forrester used the example that of a contract signing, normally a discrete event, and explained how contracts can be viewed as continuous when one considers that contracts go through a process of negotiations. As the expectation associated with a contract signing increase the parties begin preparation so that the contract obligation can be fulfilled (1961; p.65). Thus, a contract signing represents a continuous process. The debate of discrete versus continuous has continued into the into the 1990’s with Richardson (1991) maintained that the decision to model a problem discretely or continuously depends on the conceptual distance from which one views a problem. Richardson (1991) makes a strong argument for a continuous world perspective when he writes, “Only from a more distant perspective in which events ‘behavior is a consequence of feedback structure’ arise and be perceived to yield powerful insight” (p. 346)
An Intelligent System Dynamics Based controller for Fuzzy Managerial System
Julio Macedo

Rafael Ruiz Usano

Abstract: The target organization of a manufacturing system is the one that allows to make products whose managerial attributed (production delay, defective product rate, production cost and product variety) satisfy a target market. A fuzzy controller that generated the target organization of a manufacturing system is presented (Figure 1). This new type of controller, named organizational fuzzy controller (OFC), is an alternative tool to fuzzy expert systems. The OFC does not require membership functions, fuzzy logic and defuzzification procedures. In addition, the OFC can generate target organizations (controls) adapted to structural variation in the desired managerial attributes.
Transparent- Box Business Simulator verus Black- Box Business Simulators: an Initial Empirical Comparative Study
Jose A. D. Machuca

Miguel A. Domingo Carrillo

Abstract: As we stated in a previous study (see Machuca et al., 1993, p. 289), we have been criticizing, since 1988, the use of black-box simulators (BBBS) and defending the use of transparent-box-business simulators (TBBS), in which the structure (for example, in the form of a casual diagram), and even the main equations of the model on which it is based, are at all times accessible to the user, who will therefore find it easier to make decisions based on previous study of the possible causes of the different behaviour of the variables, and not only on observation of the latter, which are simply effects. Our approach was based on the hypothesis that in this way the learning process and acquisition of systems would be clearly improved (Machuca, 1992). Although other authors have subsequently touched on this topic, directly or indirectly, (Eberlein(1989), Issacs and Senge(1992, p. 195), Kemeny and Kreuter (1992, p. 305), Morecroft (1992, p. 465), Peterson ( 1992, p. 117), Sy-feng and Young (1992, p. 765)), the idea has scarcely been reflected in transferal in practice to game-design. In our view, one of the most valuable tools that System Dynamics offers to the development of systems thinking was being lost (Machuca, 1992p. 176)
Modeling Software Processes with System Dynamics: Current Developments
Raymond Madachy
Abstract: N/A
Systems Thinking for K-12 Teachers: A New Course at the Graduate School of Education and Allied Professions, Fairfield University
Albert Madwed
Abstract: This Graduate Level Course for k-12 Teachers will introduce them to the General Systems Theory method of Thinking. This thought process is different from the analytical Mechanistic Method of Thinking from the Renaissance Period which produced the Industrial Revolution. The use of General Systems Theory, System Thinking and System Dynamics is aimed at bringing cohesion, meaning and interdependence to the k-12 curriculum. This process can introduce thinking, curiosity, creativity, and real world meaningful learning experiences in the classroom. The k-12 education establishment in the U.S. which is criticized for not preparing the students properly for college and the workplace could make a giant step forward by using System Thinking across the curriculum in the classroom. This is an introductory course in System Thinking and the Philosophy of the Systems View of Reality. The history of the thought process of Systems thinking and its application in the past, the present and the future is explored. Comparison with the Mechanistic View of Reality is presented. In depth studies of open, closed and feedback systems are developed and applied to social science, ecology, economics, biology, health care, physics, chemistry, mathematics, literature, government, business and etc.. Some of the graphical and software tool which have been developed for the study of systems will be uses. About 50% of the course will involve working on the application of system thinking and the computer simulation of systems. A new text was written for this course. The following twelve overheads summarizes the material and structure of this course. The text will be in draft form by the middle of 1996.
Do Management Flight Simualtors Really Enhance Decision Effectiveness?
Frank Maier

Juergen Strohhecker

Abstract: Companies are complex and dynamic systems that have to be managed: information about the actual state of the systems has to be analyzed, decisions have to be drawn and then transformed into actions. However, due to the complexity and the dynamics of the systems, “company”, management is a very difficult venture. Therefore, tools, theories and methods are needed to make management easier and more effective. In our system dynamics community of researchers, lectures and practitioners it is a fundamental and clear paradigm that system dynamics bases modeling and simulation can enhance the understanding of complex systems and because of that it can improve decision making.
Substitution Among Successive Product Generations- An Almost Neglected Problem In Innovation Diffusion Models
Frank Maier
Abstract: The spread of an innovation in the market is a highly dynamics process. Management science has developed a plenty of descriptive or normative methods, models and instruments to model this process. The research reaches back to 2960 with the models developed by Fourt/Woodlock, Mansfield and Bass (Fourt/Woodlock 1960; Mansfield 1961; Bass 1969). These models regard the diffusion of an innovation over time as a quasi natural process–like the spread a disease–neglecting variables that allow to control the speed of innovation diffusion through corporate decisions. However, these fundamental models have been the basis for a variety of developments in this particular field. However, only a few of them consider the variety of influencing elements of the innovation diffusion (for an overview on the different models see e.g., Manhajan/Peterson 1985; Mahajan/Muller/Bass 1990:Maier 1995a) They concentrate on one or a combination of some of the decision variables, e.g., some models have been developed to seek for the optimum pricing or advertising strategies. Some models are simple in structure, regarding only monopolistic markets and neglecting important management decision variables. Some models are little more complex, considering oligopolistic or dynamic market structures. However, management decision variables are mostly exogenous inputs into the model, no feedback between management decisions and the spread of a new product in the market, and the success of a product exists.
System Dynamics Approach to Marketing Modeling in the Airline Industry
Mahendran Maliapen

Ram Ramasehan

M. Quaddus

Abstract: The domain of strategic decision making involves very complex issues with action-reaction relationships. In reality, there are system dynamics -based stimulation tools that help business managers understand t he fundamental processes of their businesses. In this research paper, we have studied the strategic market in the passenger airline industry for an international city pair between Perth and Singapore. Based on the study of major players on this route sector, we have attempted to model all the significant market elements and forces that demonstrate their explicit and implicit behaviours. The model developed in “iThink”, a system dynamics-based stimulation software, provides an interactive capability to the business manager for the exploration of alternative scenarios so that the decision maker can understand how the pricing or competitive positioning activities of other players affect the market leader and vice-versa.
Modeling Quality Improvement Processes
Purnendu Mandal

Amrik S. Sohal

Abstract: The paper attempts to relate the operational elements of manufacturing organisations to the overall theme of quality. A common modelling framework is developed to bring together a number of issues such as technological flexibility, training and motivation, product improvement, process improvement, customer satisfaction, productivity and quality costs. The model is under validation and testing stage, and the policy options which will be evaluated are related to technological flexibility, investment, and employee development.
Understanding Long Term Interactions in Fabricated Metal Manufacturing Industry: A Case
Purnendu Mandal

Amrik S. Sohal

Abstract: The paper describes a dynamics model of fabricated metal manufacturing industry for Australian economy. Major subsectors considered in the model are: production, customer order, sales and capacity acquisition. The policy runs focus towards understanding of behaviour of capacity, inventory, production and costs.
Oscillation in Preventitive Maintenance Programs
Ali N. Mashayekhi
Abstract: Maintenance is one of the major functions in production activities. It has a high direct cost and a profound impact on overhead cost through availability of equipment. Maintenance programs are either reactive or proactive. In reactive programs repairs are made when equipment fails. Proactive maintenance is a form of preventive or predictive maintenance. Preventive maintenance (PM) is the regularly scheduled process of performing certain types of maintenance, inspections, adjustments, and lubrications or equipment prior to failure. While it is being recognized that “the higher production uptime and product yields more than justify the expense of their preventive maintenance programs”, many plants experience frequent wanes in their preventive maintenance programs. Some plants have shown oscillatory behavior back and forth between preventive and reactive maintenance without much leaning about the cause.
Using Systems Thinking and Dynamics Simulations to Reengineer Manufacturing Processes at Silicon Graphics
Matt Mayberry

Kent Hoxsey

Kerry McCracken

Carl Rendell

Abstract: Business Process Reengineering (BPR) is a methodology for fundamentally changing key business processes to improve performance. The type of systemic change implied by the notion in “radical rethinking of business processes” lends itself well to a systems dynamics (SD) approach, In this paper, we describe how various SD tools have helped our reengineering team implement fundamental changes to our material planning and control processes at Silicon Graphics (SGI). These methods have helped our organization gain a deeper understanding of our supply chain dynamics, develop alternative structures and ultimately change the way material flow is managed.
A Management Stimulator to Support Group Decision Making in a Corporate Gaming Environment
Peter Milling
Abstract: Successful corporate management requires specialization, i.e. the separation of tasks. In a historic perspective this lead to the manufacturing philosophy of “Taylorism” and the delegation of decision making- concepts that have proved highly successful in the past. But the same developments bear the risk of failure through uncoordinated activities. Management becomes futile without coherent action. Especially in a dynamic environment, as it is found e.g. in innovation management, this (potential) gap between isolated operations and coherent strategy has to be closed, Team or Cooperative Learning is necessary to define and to achieve the overall corporate objectives (Sengw 1990: Argyris 1990) Management games works as catalyst in such a process of group decision making. They counteract narrow specialization, lead to improved communication between different corporate functions, and encourage the identification and the pursuit of shared values and overall objectives.
Safely Knowledge and its Influence over Accidents in the Workplace
Jonathan D. Moizer
Abstract: The paper aims to describe an approach to identify suitable policies to deal with manufacturing workplace accidents, both their causes and effects. Particular emphasis has been put on the retention and application of safety knowledge by workforces, in conjunction with both reactive and proactive safety policies. The paper shows the possibility that safety in the workplace can lead to improved profits.
Assessing the System-wide Impacts of Automated Voice Response Customer Service Technologies
Mohammad Mojtahedzadeh

David F. Andersen

Abstract: Between 1994 and 1995 the Office of Regulatory and Management Assistance (ORMA) of New York State became interested in reengineering the processes whereby it interacted with the public. Specifically, the agency was having difficultly responding to phone inquiries for business permits automated voice response customer service system. ORMA approached the Center for Technology in Government (CTG), a research and development unit of New York State Government, requesting that such system be developed on a prototype basis and evacuated for feasibility.
The Dynamics of Organizational Heuristics and Biases in Corporate Strategy
Eduardo Mollona
Abstract: According to the research-based literature, essence of firm’s idiosyncrasies is better investigated looking at the bundle of resources that constitutes them. According to this view, this paper examines the role of cumulated experience in influencing strategy-making process by directing selection of strategic initiatives. Moreover, this work regards it as necessary to look at the organisational and behaviuoral systems in which resources are embedded. For this reason, it places itself in the area of research, within the research-based view of the firm, recently denominated ‘Competitive Organizational Behaviour’ that studies the strategic consequences of behavioural and social phenomena within the firm jointly with the content of strategy and the competitive context [Barney and Zajac, 1992]. Taking this intraorganisational point of view, it is argued that firms not only cumulate experience that enhances their ability to simulation approach is used to explore the consequences of such assumption. A firm is represented that allocates funds among competing strategic initiatives using evolving routines. On one hand, the firm learns and exploits accumulated knowledge, on the other hand, it is strongly biased by past experiences. A behavioural perspective is therefore, taken in highlighting heuristics and biases in the strategy-making process. As a result, the paper (i) proposes some areas of analysis as crucial to address the paradox of taking advantage of core capabilities without being hampered by their dysfunctional flip side learning ( Leonard-Barton, 1992) (ii) investigates  the suitability of system dynamics modelling to this kind of analysis.
Comparing Strategies for Building Korean Information Infrastructure Using a System Dynamic Model
Tae Hoon Moon

Deuk Jong Bae

Doa Hoon Kim

Dong Whan Kim

Abstract: This study compares the effects of several strategies for building Korean Information Infrastructure (KII). Korean Government plans to invest about 45 trillion won for the next fifteen years to build Korean Information Infrastructure (Table 1). Using system dynamics model of Korean Information Infrastructure, this paper compare market vs. government initiative strategies for building KII and explain the development pattern of KII under different strategies. Model building was proceeded in accordance with group model building procedure (Richardson & Andersen, 1995).
A Behavioral Model of Diversification and Performance in a Mature Industry
John Morecoft
Abstract: Although system dynamics has long been applied to strategic business problems, there has been surprisingly little published work dealing with the topic of diversification and multibusiness firms. Widely cited business models in the field typically deal with dynamics at the level if a single business or else at the level of an industry strategic group. Nevertheless, diversified firms are numerous and have been studied closely by academics working in the area of corporate strategy. Much debate surrounds the question of whether (and under what circumstances) diversified firms can outperform firms that focus on a single core business. Researchers on this area have principally concerned themselves with statistical analyses of the link between financial performance and portfolio relatedness (Markides and Williamson 1994, Robins and Wiersema 1995)
Linkage Structure and Trade-offs of Competitive Measures
Michiya Morita

Nobuhide Tanaka

Yutaka Takahashi

Toru Higuchi

Abstract: A wellknown generic manufacturing strategy indicates “focused” orientation on strategic resources allocation decisions. This is true in the general sense that they have to make optimal decisions under resource constraints such as capital, human resources, time, etc., We can find an assumption underlying the orientation that there exist trade-off relationships between competitive measures like cost, quality, etc..(Skinner, 1978) Our research objectives are to seek for insight into the trade-off relationship. It is an unavoidable lot to every company? The analysis on the Japanese world class companies hints there is high degree of freedom for any company to make it more competitive free from the relationship. It is more important for actual companies to exploit such freedom than assuming the relationship as a lot. Our research objectives include modeling a hypothetical strengthening competitiveness process based on the results extracted from the positive analysis of the structure of competitive measures. Such task may give us implications to build up competitive companies.
Crisis Management of a Renewable Resource
Erling Moxnes
Abstract: Numerous renewable resources have been exploited beyond limits for sustainable economic development. At times over-exploitation has been observed even in cases where management regimes have been in place. Thus it seems pertinent to search for explanations beyond the theory of the commons. An experiment is performed where subjects set reindeer quotas in a district where lichen has been severely depleted by preceding overgrazing. All subjects err on the side of over-exploitation. Behaviour seems to be dominated by inappropriate, static mental and inefficient heuristics. Hence a subtle information problem is revealed.
Stochastic Optimization in Policy Space Using Simulation Models
Erling Moxnes
Abstract: Optimization has not been an important part of system dynamics thus far, and for several good reasons: Simulation models have been sufficient to point out greater potential for improvement than what policy makers have been willing o embrace. Hence presumably minor improvements of policies might have seemed of little value. Even simple simulation results have been difficult to communicate, indicating that the results of complicated optimization efforts would be even harder to convey. Optimization methods have not been able to capture the richness of real decision problems characterized by simultaneous appearance of dynamics, nonlinearities and uncertainties. Hence there has been uncertainty about the transferability of solutions from simple to complex environments.
Empirical Validation of a Dynamic Hypothesis
Rogelio Oliva
Abstract: The purpose of this paper is to describe the methodological approach followed to validate a dynamic hypothesis of service delivery and explain its implications for service quality. For a full report on the application of the methodology and the substantial results obtained in the analysis see Oliva (1996)
Poverty-Environment Links in the Philippines
Phares P. Parayno
Abstract: Past policy studies to reduce rural poverty in the developing countries have focused much attention to the issue of increasing food production and expanding economic growth but little attention to the issue of constraints imposed by degradation of agricultural land resources and the effects of expanding urban economy on rural development.  Only in recent years have we seen increasing attention to the relationship between rural poverty and environment. Inquiry is, however, often done by simplistic one way causal relationship which, although often illuminating, does not provide a comprehensive understanding of the different interacting processes that create rural poverty and land degradation. Many of the analyses of poverty-environment relationships view that poverty is the cause of environmental destruction. The common assumption takes the poor to be ignorant and short-sighted ‘slash-and-burn’ agriculturist, wrecking destruction on the environment. Others would consider population growth resulting from poverty to be reinforcing environmental destruction. In the process of destroying the environment, the poor people also became the victims of environmental degradation.
Enhancing the Performance in Dynamic Decision Making: The Adaptive Model Reconstruction Using Feedforward vs. Feedback Decision Strategy
Hun-Joon Park

Jimwoo Kim

Kuen S. Yi

Kiho Jun

Abstract: This study examines the cognitive processes of strategic decision making in simulated dynamic environments. The experimental study using two different types f interactive decision making games found that high performers adopted more feedforward strategy and they pursued more model expansion than low performers did. These findings were confirmed in a supplementary study which manipulated to force the subjects to use feedforward strategy in there dynamic decision making. Results suggest that, in dynamic decision environment, the performance relies on the decision making strategy that manages adopt, i.e., feedforward strategy rather than feedback strategy. This study concludes by discussing its implications for theoretical development and strategic decision makers in complex dynamics environments.
Note on Conceptual Distance in Simulation using the Polls Model as a Basis for Discussion
Mauro Piatelli

Nicola Bianchi

Luca Minna

Abstract: The paper deals with an extension of the Polis modeling process that concerns war-vessel type dynamics. The study provides an opportunity for considerations on conceptual distance in SD models. We address the question with stating that a complex system cannot be simulated by an invariant model and that its change require adjustment in the conceptual distance which can also imply the treatment of discrete events. The models of Kuhnian theory suggested by the literature allow us a comparison for concluding that the POLIS approach could be of more interest in the simulation practice of complex systems.
RMSM-X in Vensim: Refining the Financial Sector of the Threshold 21 National Development Model
Weishhuang Qu

Gerald O. Barney

Jos Verbeek

Abstract: The Revised Minimum Standard Model (RMSM) of the World Bank is a model which focuses on the financial flows of the economy, and its best use is found in countries which require necessary adjustment towards balancing its national accounts. It is used frequently in repairing countries Country Assistance Strategies (CAS) which are approved by the Bank’s Board of Executive Directors as the basis for Bank strategy for each individual country. RMSM was first constructed in the early 70’s to provide a framework  for assessing financial needs and domestic growth opportunities. Its extended version, RMSM-X, is used extensively by the World Bank Country Operations departments for making macroeconomic projections and analyzing macroeconomic policies for all developing countries.
Calibration Statistics: Selecting a Statistic and Settling a Standard
Kimberly S. Reichelt

James M. Lyneis

Carl G. Bespolka

Abstract: N/A
Modeling the Failure of Productivity Improvement Programs
Nelson Repenning
Abstract: This paper develops a simple model of a manufacturing firm in which a successful productivity improvement program is implemented. The model is used to show how a successful improvement program can fail to significantly improve a firm’s financial performance. It is argued that the potential rates of improvement in the firm’s capabilities can differ substantially based on the intrinsic complexity of those processes. The spread of improvement skills and commitment to the effort is modeled as a diffusion process among employees in a given area. The allocation of resources to support that commitment is represented as a dynamic adjustment process. The formulation, with the assumption of locally rational decision rules, results in the differential rates of improvement in the capacity and demand generating areas of the firm. If excess capacity results, interactions with traditional accounting, pricing, and human resources policies can create unanticipated side effects that result in sub-standard performance of failure of the program. Policies for mitigating these problems are discussed and analyzed.
Integrative Systems Modeling: Leveraging Complementarities of Qualitative and Quantitative Methodologies
Jose Perez Rios

Markus Schwaninger

Abstract: The purpose of this paper is to show that a combination of System Dynamics (SD) and the Methodology of Network Thinking  (MNT) developed at the University of St. Gallen can help overcoming some of the limitations of the both methodologies, and realizing substantial synergies between them. Insights from an application of this synthesizing methodology, which we call “Integrative Systems Modelling”, to a case study, – The RITTS (Regional Innovation and Technology Transfer System)- project in Aachen (Germany) support our assumption that MNT and SD are highly complementary methodologies. The experience of this intervention shows that MNT is excellent for eliciting knowledge on complex issues from those who incorporate theoretical understanding and practical experience. It helps in surfacing issues, finding consensual domains and building a communication culture in a team. However, the modelling capabilities of MNT are limited. They do not include formal quantitative modelling of variables and their relationships. Also, the possibilities for simulation and validation are very limited. To overcome these limitations, SD modelling is the ideal complement. The concept of “Integrative Systems Modelling” is outlined and its main steps of application are illustrated by means of the Aachen RITTS case. Thereby, also the advantages, limitations and complementarities of the GAMMA and ITHINK software packages in model building become visible.
The Stucture of Structural Violence
James C. Roberts
Abstract: N/A
System Dynamics in Project Management: Assesing the Impacts of Client Behavior in Project Management
Alexandre J.G. Rodrigues

Terry Williams

Abstract: Major projects generally involve a “client” and a “contractor”. The client often essential for approving intermediate milestones or documentation, can however, cause detrimental effects to the project, requiring changes to work scope or the product definition, delaying documentation approval or essential information, requiring too much reporting, or tightening milestone schedules. If the relationship starts to deteriorate, positive dynamics can be set up, and many such are discussed in this paper. These effects must be analysed and quantified: to keep control of the project costs and time, to estimate correctly the true cost of contract amendments, and where necessary to make auditable claims against the client. Traditional project management tools are based around decomposing the project into constituent cost or time elements. These techniques have proven inadequate on their own for analysing and managing modern complex projects, which are increasingly becoming more complex and intra-related. A holistic approach must be used, particularly to deal with systemic effects such as multiple client actions. A natural technique for modelling such effects qualitatively is cognitive maps/ influence-diagram: a natural extension is to develop these into System Dynamics (SD) models, able to capture both hard auditable systemic effects, and the softer “human” effects that play an important part but are harder to quantify. Academic and practical work has continued to demonstrate the usefulness of SD in project management, particularly supporting dispute resolution.
System Dynamics in Software Project Management: Towards the Development of a Formal Integrated Framework
Alexandre J.G. Rodrigues

Terry Williams

Abstract: Software projects are of major importance. Technical aspects have advanced. But not software project management: this is now the key area in which improvement is urgently needed. It comprises the functions responsible to keep the project within cost, and duration targets: interfacing with the Client and sub-contractors, and managing the interactions between planning, monitoring, technical development, QA and configuration management. In this paper we focus on three main functions of project control: estimating, planning, and progress monitoring.
System Dynamics Modeling: A Case Study from the Software Product Development
Egbert Roos
Abstract: This paper describes a project we have conducted in the software industry. The client’s department involved in the project can be described as a newly established department performing software factory-like activities. The client’s expectations of the department is anticipated (in terms of amount of personnel, numbers of orders, etc.) However, the growth should neither lead to a decreasing level of quality nor to an increasing throughput time of orders. To show the dynamics of the growth of the department we built a model. This model helps our clients to take better decisions concerning inflow of new personnel and the amount of orders accepted over time. In the project we used the Participative Business Modelling approach. Participative Business Modelling (PBM) is a consulting approach which is a combination of business modelling from a System Dynamics point of view and from a process consulting perspective. In this paper we focus on aspects from the consulting process from a practitioner’s point of view. We will not describe the model in detail.
They will Learn what They See Others Doing
Gus Root

Grant McGriffin

Abstract: Demands on students to learn complex, higher order skills have raised questions about the schooling environment in which they would most likely learn them. Answers to such questions have come from many fields, and have suggested practical solutions to many problems we are experiencing in transforming the Falmouth schools. Social learning theory (Albert Bandura) suggests that copying can lead to significant learning. We describe a set of activities and facilities that stimulate all schooling stakeholders (teaching, students, parents, administrators, future employers, etc.) to engage in and can be seen performing the higher-order behaviors we want students to learn. Operational research (Stafford Beer) suggest that organized information on its inputs, operations and outcomes. We describe a process for engaging each school subsystem in modeling its operations and contributions to the school’s goals, and a facility for displaying organized information and operational models in a Performance Information Center (the PIC) for the decision-makers in each schooling sub-system.
Applying Systems Thinking to the Issues of Software Product Development
Johanna Rothman
Abstract: N/A
The Influence of Group Model Building on Policy Intentions
Etienne Rouwette

Jac Vennix

Abstract: Most system dynamics aims to support strategic decision making. Since the first evaluation studies of the actual impact of models on decision making appeared in the 1970s, the factors influencing effectiveness have become increasingly clear. As a result, in addition to development and analysis of models, the communication of recommendations to policy makers has become a major focus of the system dynamics community. Often, this communication takes the form of direct involvement in the modeling, efforts, resulting in Group Model Building. Simultaneously with the introduction of system dynamics the concept ‘mental model’ was proposed as an important variable influencing decision making. Recently, this concept was criticized as being pre-scientific and for the most part undescribed and unmeasured (Richardson et al, 1994) Richardson et al. see ‘operator logic’ as the intervening concept between managers’ behavior and modeling projects. In a case study of the effects of Group Model-Building (Vennix et al, 1996) an alternative construct was proposed, i.e. ‘the intention to perform a behavior’. Both of these proposed constructs illustrates the need for a better understanding of the relationship between model-building on one hand, and cognition and behavior of managers involved in model-building, on the other hand.
System Dynamics and Discrete Stimulation in a Constant Work-in-Process System: A Comparative Study
Rafael Ruiz Usano

Jose Manuel Framinan Torres

Adolfo Crespo Marquez

Ricardo Zubiria de Castro

Abstract: In this paper we will study a production line operating under a Constant Work In Process (CONWIP) control System Dynamics and discrete simulation. The goal of our research is to determine whether various characteristics of a production line can be better understood using System Dynamics or discrete simulation. The software used in our investigation is VENSIM for System Dynamics and WITNESS for discrete simulation. In conclusion we have found that the best way to manage the production line is using both approached in a complementary manner.
Exploring Spatio- Temporal Dynamics in Economic Exchange: A Dynamic Modeling Approach
Matthias Ruth
Abstract: Economics is a discipline rich in models designed to elucidate the behavior of potentially complex economic processes. The reduction of complex processes to analytically solvable models, however shifted focus away from the spatio-temporal dynamics representative of economic processes, and excluded to a significant extent experimentation from these processes (Allen 1988, Ruth 1993) In the illustrations below, special attention is given to three issues that are found at the sidelines of traditional economic analysis (Hannon and Ruth 1994, Ruth and Hannon, in press). The first of these issues concern the dynamics of economic system on their way to equilibrium points. The second is the spatial context within which economic activity takes place. The third are temporal and spatial discontinuities of economic processes.
A Peircian Framework for Using System Dynamics Modeling as an Inquiry System
Thomas Ryan
Abstract: Management is about action designed to bring about change in some situation. Any sane management action implies the manager holds: 1. a representative mental model of the current situation and an understanding of why it has to change, 2. an acceptable and feasible mental model of the desired changed situation and an understanding of why it is more desirable that the current situation, 3. a representative mental model of how the world works in the particular situation under consideration that, and 4. a belief that the situation can be improved through management action.
Environmental Model of Atmosphere- from Japan Model to East Asian Companies
Kanji Sahara

Kinya Machida

Nobuyuki Suzuki

A. Uchino

Abstract: Japan has made a remarkable progress not only in the area of the economic development but also in the area of the pollution control after the world war the second; This paper, firstly tries to make analysis of Japanese pollution policies to the mainly atmospheric problems and to fix the specified Japan Environmental Model of the atmosphere during this forty years, secondly to make the recommendation of the importance of the application of the advanced technologies to the transitional environmental issues.
A Stimulation Model Behaviour of Innovative Companies
Marco Santoni
Abstract: ASIMOV (Autopoiesis Simulation Model for Valuation) was developed in the context of an applied research project on Small and Medium-sized Enterprises (SME), and is a simulation model for the behaviour of an innovative company in a market characterised by rapid change. The model is based on two elements: the nucleus and the membrane. The nucleus represents the operational strength of the company: the membrane its capacity for interaction and exchange with the outside world. Special attention is paid to the membrane for the effects of telematics, particularly telework. In fact, the model is intended as a predictive instrument for the implementation of types of telework. The purpose of ASIMOV is to make forecasts regarding the nucleus-membrane dynamics that take place in companies after an investment in an observable and partly predictable market. With a three-year time horizon in the simulation it is possible to consider most phenomena. The simulation model developed with high Performance Systems Inc.’s ITHINK, is parametric, allowing it to adapt quickly to specific situations at reasonable cost.
A Winery Dynamic Model for “Product Portfolio” Management
Habib Sedhi

Carmine Bianchi

Abstract: On behalf of the “product portfolio” analysis through Boston Consulting Group (B.C.G.) approach and System Dynamics methodology analysis of a wine production firm, a dynamic model of a company had been developed. The winery model is designed for different functions of the firm, taking in to account Resource & Production, Economic & Financial and Market subsystems. Even though the model has been focused to evaluate different market strategies in new product launching, it can be used also to support simulating policies concerning different management functions of the firm. The model will be described schematically and a series of simulation results will be presented, particularly in evaluating company policies in new product launching, so to put in evidence how system dynamics could be useful in strategic analysis.
SYDIC- System Dynamics- Italian Chapter
Habib Sedhi
Abstract: In spite of its potential strengths and different attempts made in the past to apply it to business research, management education and practice, still today System Dynamics is far from being sufficiently exploited both in academic and in industrial context in Italy. System Dynamics-Italian chapter born offers the opportunity to: Investigate the present S.D. scenario in Italy; University and research centers where S.D. courses are present, Companies where there have been or are having experiences with S.D. methodology, Practical applications by consultants in both educational and company model construction, Underline problems met proposing S.D. approach, Express practical results obtained, Evaluate potential “levers” for S.D. diffusion.
Cognitive and Instructional Issues in System Modeling
Syvia A. Shafto

CJ Kalin

Michael G. Shafto

Abstract: N/A
Use of System Dynamics for Managing Water in Jordan
Ziad K. Shawwash

S.O. Dennis Russell

Abstract: Management of scarce water in Jordan requires development and operation of expensive water facilities and making hard policy decisions. System Dynamics is used to represent the structure of the water sector in Jordan and to test potential policy decisions and water development scenarios. This paper discusses the potential use of System Dynamics simulation models to serve as tools to aid water managers and policy makers in making management decisions and long-range water strategies.
A System Dynamics View of the Rural Community Development in Indonesia
Rislima F. Sitompul

Muhammad Tasrif

Abstract: A system dynamic approach is applied to explore sociological dynamics on rural community development of a traditional rural in Indonesia namely Wamena. The model is used to explain the causalities relationship of the decision making process of rural communities in responding to the development implemented by the government. The model consists of five main sectors: native population, migrant population, land, food, and agricultural technology. The simulation shows that the dynamics of development pattern is greatly influenced by the interactions of natives and migrants in market activities.
A Systemic Approach to System Dynamics Education: A Status Report
Andrew Smith

Allen Boorstein

Abstract: System Dynamics Education (SDE) efforts have been underway in the Unites States since the 1970s. Since then Pre-collegiate educators have attended Systems Dynamics (SD) conferences, participated in training workshops, developed and distributed curriculum materials, launched projects, published articles and complete dissertations. In October 1995, the authors have interviewed teachers and administrators involved in SDE projects, analyzed curriculum materials, and reviewed the literature. Based on this data, strengths and weakness within the SDE field has been identified, and recommendations have been developed. This paper is a progress report intended to promote dialogue among those interested in SDE. We encourage others to challenge these recommendations and substitute alternative ones.
Assessing the Dynamics of Energy Markets Under Liberalisation Process
Ricardo Smith

Santiago Montoya

Carlos Jamie Franco

Issac Dyner

Abstract: The new liberalism and privatisation trends now taking place world-wide have influenced government policies on electricity utility management. Some countries in the Latin America region are moving away from central planning, vertically integrated regional monopolies and heavy biased hydroelectricity generation schemes towards more liberalised set ups. The specific structure chosen in the Colombian case have important variations with respect to those advocated by main stream economic thinking. Recent technology developments or power generation and extensive gas use in the household sector have stretch further relationships between electricity and gas industries. In this paper we present a System Dynamics model specially built as part of larger projects to study and asses the effect of market forces into the power generation sector, at the light of a larger scale plan which intends to supply natural gas as an important portion of the household sector and the power generation industry. With the aid of the model, we examine a number of economic signals to induce capacity investment to secure appropriate reserve margins for the Colombian electricity system.
A System Dynamics Model for Long Term Travel Demand Forecasting and Policy Analysis
Cyprian A. Smits

E.J. Verroen

Abstract: Long term explorations (15 to 40 years ahead) of the future development in travel demand are fraught with uncertainties. In particular, in long term policy development it is essential to use comprehensive and consistent scenarios and to incorporate the essential factors, constraints and feedback mechanisms in the analysis. It is on the long term that complexity arises because many of the usual assumptions on steady conditions on the short term are not valid. Moreover, long term developments in society which determine travel demand are hard to predict. It is no surprise that there is little consensus among the professionals on an adequate concept for the passenger transport system which is valid on the long term.
Organizational Design with System Dynamics and Radical Change Approach
Ricardo Sotaquira G.

Hugo Andrade

Lilia Nayibe Gelvez

Abstract: As Simon points out (1969), to design is a purposeful activity aimed at changing a current situation into a desired one. When the entity to be designed is a human organization, then the current situation, the desired situation and the resultant design can’t be clearly defined. Consequently, we can’t adopt an optimization approach in the organizational design. To design an organization implies to develop a process of gradual understanding about our current situation, about our expectations regarding ideal situation and about the way to intervene, through design, in the organization. Moreover, this activity of organizational understanding and action goes with the organization during all its life. Therefore, organizational design, viewed as a permanent activity of understanding and action, could be recognized as a process of organizational learning.
Can Vector- Autoregression Methodology Help in an Understanding of the Casual Dynamics of the Unemployment- Crime Relationships?
Sanjeev Sridharan
Abstract: We apply a dynamic time-series method called Vector-autoregression (VAR) to studying the dynamic linkage between unemployment and crime rates in Virginia. The promise of the VAR methodology lies in its ability to provide information on the dynamic and the feedback properties in systems of variables.
Redefining Resources: A Systems Perspective on the Watershed Protection Conflict Between New York City and the Catskill Mountain Region
Krystyna A. Stave
Abstract: N/A
Edutaining, Engaging the Learner, and System Dynamics
Julia M Di Stefano
Abstract: N/A
The Improvement Paradox: Designing Sustainable Quality Improvement Programs
John D. Sterman

Nelson Repenning

Rogelio Oliva

Elizabeth Krahmer

Scott Rockart

Andrew Jones

Abstract: Why are quality so successful in some firms but not in others? Some point to difficulties in implementation or leadership. The problem is more fundamental, however. Quality programs are tightly coupled with other functions, routines, and structures. Product development, marketing, accounting, systems, human resource policies, employee morale, pricing policies, and financial results are all affected by and in turn influence quality initiatives. We hypothesize that the productivity gains from successful quality programs can interact unfavorably with existing routines and structures. Under certain conditions these interactions may lead -or force-a firm to take actions that ultimately cause the demise of an otherwise successful program. Field study and formal models are used to test these hypotheses.
A Behavioural Analysis of Learning Curve Strategy
John D. Sterman

Rebecca Henderson

Eric Beinhocker

Lee I. Newman

Abstract: Learning curves have been identified in a wide variety of industries (Dutton and Thomas, 1984) and the extensive theoretical literature has explored their strategic implications A learning curve creates a positive feedback loop by which a small initial market share advantage leads to greater production experience, lower unit costs, lower prices and still greater market share advantage. In general, the literature suggest that in the presence of learning curves – and when learning is privately appropriable-firms should pursue an aggressive strategy in which they seek to preempt their rivals, expand output and reduce price below the short-run profit maximizing level (Spence, 1981: Fudenberg and Tirol, 1983, 1986; Tirole, 1990). Intuitively, such aggressive strategies are superior because they increase both industry demand and the aggressive firm’s share of that demand, boosting cumulative volume, reducing future cost and building sustained competitive advantage until the firm dominates the market. The desirability of aggressive strategies in industries with learning curves have diffused widely with business education, the popular business literature management texts, and public policy debates. (Rothschild 1990, Hax and Majluf, 1984; Oster, 1990; Porter, 1980; Krugman, 1990) and learning curve strategies appear to have led to sustained advantages in industires such as synthetic fibers, bulk chemicals, and disposable diapers (Shaw and Shaw 1984; Ghemawat 1984, Porter 1984), However in many industries including televisions, VCRS, semiconductor, toys and games, lighting equipment, vacuum cleaners, aggressive pricing and capacity expansion have led to substantial overcapacity and price wars that have destroyed industry profitability (Beinhocker, 1991; Salter, 1969: Porter 1980; Saporito. 1992; The Economist, 1991;  Business Week, 1992).
Computer Attack: The Role of Modeling in Development an Intergrated Securtiy Policy
Stephen Sturges

Graham Winch

Abstract: Many trends in computing- distributing processing, telecoms, reliance on computing for key business processes- combine to increase greatly the risks and vulnerability of firms to computer attack. The form of attack is also is also diversifying- mischief-making by “hackers” or virus writers, sabotage by disgruntled employees, fraudulent activity, or simple random hardware or software failure. The threats and potential costs to firms of breakdowns in security can be very large, involving the need to replace or re-engineering systems, to recover or reconstruct key information and data, and maybe even to try to re-establish goodwill with customers who may have been affected. The literature reflects that while the general issues here are appreciated, few firms understand fully the potential threats to their business, nor have explicit policies and procedures to guard against them.
The Effect of Nutrient Recycling on Ecosystem Stability
Rochelle Sturtevant
Abstract: The term ecosystem structure has been variously defined in the ecological literature. I prefer to use the definition proposed by Margalef (1963) “Ecosystems have a structure, in the sense that they are composed of different parts or elements, and these are arranged in a definite pattern.” For the purpose of this study, I define ecosystem structure as including the elements of the system (Odum 1962), the structure of their interactions (network design- Hill and Wiegert 1980), and the particular form of interactions (instantaneous flow rates- Hill and Wiegert’s form). The structure of an ecosystem determines its behavior and functional attributes, including both nutrient recycling and ecosystem maturity, I hypothesized that certain ecosystem characteristics tend to co-occur based in similar casual factors in the underlying ecosystem structure. The purpose of this study was to test the hypothesis that tightening of the phosphorus and carbon cycles increases the stability of pelagic ecosystems to nutrients perturbation.
System Dynamics Approach to Managing Community Development
Orasa Suksawang
Abstract: Most community development work viewed as planning social change often involves or leads to conflict. The basic premise of conflicts is usually distribution of benefits in society, with one group seeking to maximize its potential. Social conflict is a behaviour threat by one party directed at the territory- rights, interests, or privilege- of another party. If conflict is seen as functional social process, one is likely to be committed to as a useful tool to achieve the change desired. This paper applies system dynamics as a tool for explaining social behaviour over time and integrating experimental learning in community development for social science students and community development practitioners. The lectures incorporate experimentation in computer-based learning for understanding theories and information relationships existing in social changes, social conflicts and development. The dynamics simulation model developed in this paper aims to study the community conflict in terms of territoriality, which helps in understanding what the problem is and who is causing it. Robinson’s conflict cycle is applied as feedback system interacting with the actors-dominator, manipulator, mediator, compromiser, and avoider- in terms of participant’s behaviour styles in the conflict situation. Students were evaluated to be energetic in discussion among themselves the strategies regarding conflict for approaching to community development, preventing it or managing and resolving it while learning and doing assignments.
Application of Sysytem Dynamics on Watershead Management on Java Island, Indonesia
Prasetyo Sunaryo

Tusy A. Adbroto

Hary Budiarto

 Ervan Maksum

Abstract: The sustainability of a Watershed (DAS) ecology depends on numerous factors, especially land and water availability. Transformations occurring on a DAS be seen from the forest opening in the upstream to the conversions of rice fields into settlements and industrial area in the downstream. These transformations determine the water cycle of a DAS, such as soil absorbency, thereby affecting the eiver’s waterflow and quality. Mismanagement in the upstream area, in addition. may affect the downstream area. This paper is aimed to observe and understand the occurring transformation on DAS in Java Island- Indonesia, thus provide the basic considerations for well-managed DAS in order to minimize any possible negative impacts. System Dynamics program is applied to support the analysis.
Improving Software Project Management Through System Dynamics Modeling
Douglas Sycamore
Abstract: Managing a project and understanding the many system dynamics and feedback loops associated with a project is a formidable task. Creating schedules and tracking progress are two important activities for mangers. These activities become exponentially more complex and difficult for larger projects. Good managers possess an intuitive talent understanding how a system will behave when modifications are performed and make decisions using these skills and experience. However, when wrong decisions are made and implemented into a project, disastrous results could occur, reducing the probability of success. The larger the project, the more the feedback loops, the greater the dynamics, and the reduced probability of accurately predicting an outcome from modifications. Changing only one variable could effect the dynamics of a project with an unpredictable outcome. This is particularly true when considering all the system feedback loops associated with a project.
The Implications of Environmental Consideration in Energy Development to the General Economic Welfare and Development in Indonesia
Muhammad Tasrif
Abstract: As environmental considerations have to be incorporated into national energy planning, development countries must cope not only with reducing pollution, but also with solving more pressing issues which play a crucial role in their economic development processes: the alleviation of poverty; the control of population growth; the provision of adequate employment opportunities; the acquisition of food supplies; the satisfaction of energy requirements and other basic needs; and, the improvement of the quality of their human resource. Developing nations are faced with a major question: with those more basic and pressing problems, how will the developing countries cope with the emerging environmental problems? In particular, what are the implications of various energy strategy options to the general economic welfare and development of developing countries?
Instabilities and Deterministic Chaos In Just-In-Time Production Systems: Comparison between Neutral Networks Stimulation and Continuous Stimulation
Daniel Thiel
Abstract: This paper tackles on instabilities and chaos which can occur in production systems whose organisation is based on the just-in-time philosophy. This could be a Kanban system which controls the production flows. In this case, cards or other manual and visual devices, accompanied by parts containers, signalise transfer and/or manufacturing operations thus acting as production orders. For instance, a worker, from an assembly line, needing more components, attaches a transportation Kanban to an empty parts container, that is moved to the previous work centre (according to routing procedure) where it is replenished (with new manufactured parts) and moved back to the assembly line.
Systems Dynamics and Earth Systems Science: Bridging the Gaps Between Research and Education
Joshua Tosteson
Abstract: In the past six to seven years, a growing consensus has emerged over the powerful role that system dynamics can play in education reform. This consensus has been fueled by educators who have successfully utilized dynamic modeling in their classrooms (Draper and Swanson, 1990; Hopkins, 1992; Roberts, 1978), practitioners of systems modeling and thinking in various professionals (Forrester, 1993), and educational researchers and standards/review bodies (AAAS, 1989; Betts, 1992). These groups hold in common the view that principles of system dynamics- and the computational tools used to illustrate them-can provide a relevant foundation of core concepts and skills to integrate classroom studies, both across subject areas and through time.
Using Cognitive Styles Typology to Explain Dynamics Decision Making in a Computer Stimulated Environment
W. Scott Trees

James K. Doyle

Micheal J. Radizcki

Abstract: Computer simulation games, or flight simulators, are often used as learning tools, particularly in corporate settings. The more complex the feedback structure, the more valuable the computer simulation games are thought to be. Yet, performance on these games has historically exhibited wide variation across the individuals. One question that naturally arises is whether this observed variation in ability is explainable. This paper will describe the extent to which individual differences in cognitive style/learning style can help explain individual differences in dynamic decision making in a computer stimulation environment. Specifically, the discussion will focus on three cognitive styles of research instruments. the Myers-Briggs Type Indicator, the Gregorc Style Delineator, and a variation of Gordon’s Cognitive Style Indicator. These are coupled with the STRATEGEM-2 Microcomputer stimulation Game of the Kondratiev Cycle developed by Sterman and Meadows (1985) in an experimental setting (beta testing) where system dynamics and flight stimulators are traditionally used. Preliminary results indicate that people who have certain cognitive styles, in particular those who score higher on the Abstract component of the Gregorc test, do have a significantly higher propensity to score well on the Kondratiev flight simulator.
A Systems Dynamics Study of the Coordinated Development of Regional Infastructure
Qifan Wang
Abstract: Regional economic integration is a trend of modern economic development, and to realize such integration may supporting conditions, especially the coordinated development of regional infrastructure, however, requires proper policies of the governments and cooperation among different areas as well.
Dynamic Analysis of Manufacturing Systems
Wanlong Wang

Jerry Fuh

X Yongnian

Abstract: Manufacturing systems has been an important area in the studies of the manufacturing science and technology, especially manufacturing systems design, modeling, analysis, and implementation. However, most researches only focus on one or few of manufacturing systems, e.g. on manufacturing processes or management. Besides, these researches are also lack of dynamic analysis by using static methods only. Thus, the present researches on manufacturing systems are not comprehensive, and profound. In this paper, some new concepts and methods to manufacturing systems study are proposed by using evolutionary and life cycle theories. As we know, manufacturing systems are changing with the time under the market environment. The paper demonstrates, the basic dynamic properties of manufacturing systems, mutation and reorganization, market selection, life cycle, etc., and the relationship between evolutionary and life cycle theories.
Using Dynamic Stimulation for Resource Management Policy Design at the Minnesota Department of Transportation
Kristina Wile

David Smilonich

Abstract: This paper describes the application of systems thinking and systems dynamics modeling for the development of improved resource management policies in the Minnesota Department of Transportation. The structure explored was that of one of twelve operating units responsible for maintenance of ~1600 miles of highway. Family testing has shown its applicability to the other operating units. The paper identifies some of the policy insight and learning that occurred during model building and testing, as well as notes about process techniques. Insight included the effectiveness of hiring policies, side-effects outsourcing strategies, effectiveness of training and cross-bargaining of human resources. Process techniques included group model testing, strategy and scenario building to frame model purpose and testing, the use of learning laboratories using a simulation model to engage the leadership of the organization, and a management flight simulator to disseminate the insight gained to the ranks in the organization.
A Systems Dynamic Model of Manufacturing Quality Costs and Benefits
Phillip C.T. Willey

Amil K. Bajpai

Abstract: Most manufacturing systems are themselves too complex for the human brain to understand without the aid of tools such as systems dynamics. The costs and benefits arising in manufacture are intangibles, often subject to arbitrary accounting practices and allocation conventions. So it is not surprising that manufacturing costs and benefits are even more difficult to predict, analyse, promote, and control than the manufacturing system itself. Yet industrial managers need to know the costs and benefits of alternative manufacturing strategies. How much a particular improvement action will cost and how much and when the benefits from it will be realised are important facts on which to base investment decisions. Without such guidance investment in quality improvement is misdirected. at best, or absent, at worst.
Community Care for the Elderly in the UK
Eric Wolstenholme
Abstract: The paper describes a model of community care for the elderly. The purpose of the model is to help understand how the service can best be managed to provide the highest volume and quality of service delivery within budgetary constraints.
Strategic Planning Using Neutral Network-based, Delphi, Workshop Software
Ray Wyatt
Abstract: N/A
A System Dynamics Model for an Enterprise’s Sustainable Innovation Process
Gang Xiang

Liu Linhong

Abstract: By using the Systems Dynamics approach, based upon the background of a real Enterprise’s Sustainable Innovation process implemented in a famous Chinese enterprise, paper developed a System Dynamic Simulating Model.
Hi-Tech Impulse: A New Coordinative Development Pattern of Social- Economy- Technology-Education Systems
Qingruil Xu

Jie Han

Bin Guo

Jin Chen

Abstract: The development of high-tech changes not only the internal structure of economy, education and technology subsystem, but also the mutual relations among them. This paper analyses the new mechanism of the interactions among the three subsystems with the development of high-tech thoroughly. Based on that, this paper develops a system dynamics model to simulate the suitable growth rate of economy, education and technology in China.
Facilitating Learning Through Goal Setting in a Learning Laboratory
Jenshou Yang
Abstract: Human beings are goal-directed, mental model is thus dictated by his/her goals inescapably. This study designed an experiment to examine the effects of two kinds of goals on learning in a “growth and underinvestment” archetype management flight simulator task. One kink of goal was total assesr, a wholesystem and long-term goal, the other was order growth, a subsystem and short-term goal. The results indicated that when the goal was assigned with the attainments of order growth, subjects pay more attention on order growth and allocate more resources on hiring to push the reinforce growth loop and apt to ignore the effects of balance loops. As a result, underinvestment behavior occurred and incorrect mental model and poor performance resulted. Given the findings, wholesystems and short-term goals settings were suggested here to facilitate learning in a learning laboratory.
Entrapping Landmine Structure in Microworlds Formed with Uncontrollable Positive Feedback Loops
Showing H. Young

Chai Ping Chen

Abstract: In studying human being’s decision-making in microworlds, there are some researchers about human being’s cognitive issues in decision-making. There are also some interesting issues on the microworld side. When playing microworlds, players might encounter some underlying structures which are very difficult to deal with. Among these structures, there exist what we called  “landmine structure”– buried in the microworld there are a certain hidden dangerous structure, nothing happened if not being bothered, but once step on and being triggered unavoidably be explode wildly and very difficult to rescue. In this research, we are focused on the issue: why some microworlds have much stronger tendency to induce players almost unavoidably be entrapped into a certain helpless landmine structure than other microworlds?
Experiences in Designing Board-type Stimulation Games for Center Satellite Industrial System
Showing H. Young

Shih-Hui Lo

Abstract: In order to help introduce systems thinking ands organizational learning to the center-satellite industrial systems in Taiwan, we have designed a series of board-type simulation games sponsored by Taiwan’s Center-Satellite Development (CSD) Industrial Coordination Center. Through these games, we hope to improve managers’ understanding of dynamic complexity problems. In this paper, we will discuss the original idea, evolution of design, and some experiences from the successes and failures in our works.
Measuring the Learning of Systems Thinking: Theory and Method
Showing H. Young

Sy-Feng Wang

Abstract: To measure the learning of systems thinking is an important issue which challenges researchers of organizational learning laboratories and dynamic decision making. In recent years, researchers had developed some operational measurements methods, especially for dynamic decision making. In the same time, there was also existed research efforts in the study of cognitive learning process of systems thinking and the operational measurement methods was done. This paper tries to construct one measurement method from the cognitive learning process of systems thinking to its operational method.
Study on Development Strategies of Regional Water Resources System
Jia-Di Yu

Xin-Yun Zeng

Abstract: This article is based on the study of comprehensive utilization of water resources in an area of East China. The problems of coordinated growth of socio-economy and water resources were studied with SD method. The SD models consisted of the functions of diversion across the basin and the effects of investments. The results in research were submitted as one part of regional economical developing strategies.
Guided by Learning Organization to Practice a Process Reengineering for an Enterprise Business
Lijuan Yu
Abstract: Guided by the theory of Learning Organization (LO), an experiment of BPR (Business Process Reengineering) with developing an IT (Information Technology) was made. In the paper the relations between IT (Information Technology and BPR, BPR and LO, the methodology of BPR and role of IT in BPR have been studied. The paper includes three sections. The first part is an introduction to the background and recent development or BPR. The second part explores the framework of our study. The last part is a BPR case study.
A Dynamics Model for Analyzing Urban Growth in a Planned City
Aldo Zagonel
Abstract: This paper will report ongoing studies of the dynamics of urban growth in Brasilia, the capital of Brazil. The study is related to the literature in urban dynamics, but it is centered upon the transient dynamics of a planned city. Today, only 35 years after its inauguration, Brasilia houses a population of almost two million people–nearly twice the number originally estimated by urban planners. The original plans for the city have obviously been replaced by the internal dynamics of growth in the area. No longer is the city’s only mission to serve as the federal capital for the nation. The number of federal jobs has been stable for several years while the city’s population continues to grow.
Economics of Automobile Recycling
Pavel Zamudio-Ramirez

Andrew Spicer

John Sterman

Steve Eppinger

John Ehrenfeld

Abstract: The recycling of automobiles in North America represents one of the most successful–if not the most successful–examples of material recovery. This activity is sustained by a large industry constituted by several parties: consumers, dismantlers, remanufactures, transportation companies, material recycling companies, metal enterprises, landfills, and to certain extent, the automobile. It is estimated that approximately 94% of the vehicles being retired are processed by the recycling industry. From these, approximately 75% of the total mass is recovered. The other 25% is normally sent to landfills. These recovery rates are even more impressive considering that approximately 10 million cars are disposed yearly in North America. This is an industry that processes almost ten million tons of material per year.
Experiences in Developing Single-Discipline and Cross- Curricular Models for Classroom Use
Ronald Zaraza

Diana Fisher

Abstract: In the three years of the CC-STADUS Project more than thirty cross-curricular hundred single discipline models have been developed by project staff and participants. These models and their accompanying curriculum are intended to expose students to the use of system dynamics as a problem solving tool, as well as to address the problems presented in their specific content. Patterns have emerged that point out the dangers and advantages of both types of models. In part, these patterns are a result of the techniques used to teach the teachers basic modeling skills, as well as their needs in the classroom. The experiences of the CC-STADUS staff and participants lead to recommendations and suggestions for model development, model documentation, and training programs for teachers.
System Dynamics Admins
System Dynamics Admins

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