System Dynamics

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Dr.

Pratiksha Saxena
 Computer simulation modeling for studying and
managing complex feedback systems, such as
business and other social systems
 System:
 In general, a collection of interacting elements that function
together for some purpose
 Here, feedback is the differentiating descriptor
 Properties of dynamic problems
 Contain quantities that vary over time
 Variability can be described causally
 Important causal influences can be contained within a closed
system of feedback loops
 Cybernetics (Wiener, 1948): the study of how biological,
engineering, social, and economic systems are
controlled and regulated
 Industrial Dynamics (Forrester, 1961): applied principles
of cybernetics to industrial systems
 System Dynamics: Forrester’s work has been broadened
to include other social and economic systems
 Relying on computer, System Dynamics provides a
framework in which to apply the idea of systems theory
to social and economic problems
 Identify a problem
 Develop a dynamic hypothesis explaining the cause of
the problem
 Create a basic structure of a causal graph
 Augment the causal graph with more information
 Convert the augmented causal graph to a System
Dynamics flow graph
 Translate a System Dynamics flow graph into DYNAMO
programs or equations
 Thinking in terms of cause-and-effect
relationships
 Focusing on the feedback linkages among
components of a system
 Determining the appropriate boundaries for
defining what is to be included within a
system
 Causal thinking is the key to organizing ideas in a
system dynamics study
 Instead of ‘cause’, ‘affect’ or ‘influence’ can be used to
describe the related components in the system
 Some are logical (e.g. physics)
 Food intake weight
 Money  happiness
 Fire  smoke
 Some are not (e.g. sociology, economics)
 Use of seatbelts  reduced highway fatalities
 Shortened daylight hours  increased suicide rates
 Thinking in terms of “cause and effect” is not
enough
 ocean  evaporation  cloud  rain  ocean  …
 Feedback: an initial cause ripples through a
chain of causation ultimately to re-affect itself
 Search to identify closed, causal feedback
loops is one key element of System Dynamics
 The most important causal influences will be
exactly those that are enclosed within
feedback loop
 Represent the feedback structure of systems
 Capture
 The hypotheses about the causes of dynamics
 The important feedbacks
 Salary VS Performance  Tired VS Sleep
 Salary  Performance  Tired  sleep
 Performance  Salary  Sleep  tired

Salary Performance Tired Sleep


 Signing: Add a ‘+’ or a ‘–’ sign at each
arrowhead to convey more information
 A ‘+’ is used if the cause increase, the
effect increases and if the cause
decrease, the effect decreases
 A ‘-’ is used if the cause increases, the
effect decreases and if the cause
decreases, the effect increases
+ +

Salary Performance Tired Sleep


+ -
 Positive feedback loops
 Have an even number of ‘–’ signs
 Some quantity increase, a “snowball” effect takes over
and that quantity continues to increase
 The “snowball” effect can also work in reverse
 Generate behaviors of growth, amplify, deviation, and
reinforce
 Notation: place symbol in the center of the loop
+
 Negative feedback loops
 Have an odd number of “–” signs
 Tend to produce “stable”, “balance”, “equilibrium” and
“goal-seeking” behavior over time
 Notation: place symbol in the center of the loop
-
 Salary  Performance, Performance  Salary

The more salary I get


The better I perform

The better I perform


+
The more salary I get
Salary + Performance
The more salary I get +
The better I perform
 Tired  Sleep, Sleep  Tired

The more I sleep The less tired I am

The more tired I am The less tired I am

The more I sleep The less I sleep

The less I sleep The more tired I am

Tired - Sleep
-
 There are systems which have more than one
feedback loop within them
 A particular loop in a system of more than one
loop is most responsible for the overall
behavior of that system
 The dominating loop might shift over time
 When a feedback loop is within another, one
loop must dominate
 Stable conditions will exist when negative
loops dominate positive loops
+ +

Birth rate + Polulation - Death rate

+ -
 Evaporation  clouds  rain  amount of water 
evaporation  …

Sunshine
+
- + +
Earth’s A mount of
-
- temperature Evaporation water on earth
+

+ + + -
+
Clouds Rain
+
 Items that affect other items in the system but
are not themselves affected by anything in the
system
 Arrows are drawn from these items but there are
no arrows drawn to these items
+

Sunlight reaching Density of plants


-
each plant
-
Sunlight +
 Systems often respond sluggishly
 From the example below, once the trees are planted,
the harvest rate can be ‘0’ until the trees grow enough
to harvest

delay
+

# of growing trees - Harvest rate

Planting rate -
+
 Create a basic causal graph
 Augment the causal graph with more
information
 Convert the augmented causal graph
to a System Dynamics flow graph
 Translate a System Dynamics flow
graph into DYNAMO programs or
equations
 Simulation Model Design and Execution,
Fishwick, Prentice-Hall, 1995 (Textbook)
 Introduction to Computer Simulation: A
system dynamics modeling approach, Nancy
Roberts et al, Addison-wesley, 1983
 Business Dynamics: Systems thinking and
modeling for a complex world, John D.
Sterman, McGraw-Hill,2000

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