lecture 4 - simulation approaches ii system dynamics approach

7/29/2019 Lecture 4 - Simulation Approaches II System Dynamics Approach

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Simulation Approaches:2. System Dynamics

M05EKM Business Simulation

Dr Ammar Al-Bazi

Lecture 4


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Lecture Outlines

System Dynamics Approach: Definition

Components of System Dynamics Model

Structure of System Dynamics

Advantages of System Dynamics Methodology of System Dynamics

Symbols Used in System Dynamics Modelling

System Dynamics Approach: Real Life CaseStudy

Modelling of Financial Problems


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System Dynamics Approach:

Definition An approach to understanding the behaviour of

complex systems over time, where the states and

variables of the system are dominated by feedback.

System dynamics has found application in a wide range of areas, forexample population, and economic systems, which usually interact

strongly with each other.

Feedback is a process in which outcomes (output) ofthe system will eventually affect the input of the system.


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Components of System Dynamics

Model

Positive Feedback: A process

characterised by continuous

change over time (decline, growth). Negative Feedback: A processcharacterised by fluctuation ormovement toward equilibrium

(steady-state) over time (thermostat, maintainbody temperature).


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Components of System Dynamics

Model (Cont) Causal Link: A relationship between

variables or events or states in a system

where a change in one will produce a changein the other.

A causes BA and B are events


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Causal Loops: A sequence ofcausal links ends where start

(season sequence).

Causal Path: A sequence of

causal links.

Causal Net: A combination of causal linkswith paths and loops. (Car start up)


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(Cont) Causal tree: A special case of causal net without paths

and loops (Nuclear Reaction).

Causal Process: when two events or series of events are

linked, so if one is taken place others will eventually followup, then their events represent causal process (if you put

on a fire, the temperature will rise up).


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System Dynamics Advantages

System dynamics models are useful because

the mathematical underpinning needed for

computer simulation requires that the theory

be precise. The process of combining

numerical data, written data, and the

knowledge of experts in mathematical form

often identifies inconsistencies about how wethink the system works.


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Methodology of System

Dynamics Identify a problem Develops a dynamic hypothesis explaining the

cause of the problem builds a computer

simulation model of the system at the root ofthe problem

Tests the model to be certain that it reproduces

the behaviour seen in the real world. Devises and tests in the model alternative

policies that alleviate the problem.

Implements this solution.


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Symbols Used in System Dynamics

Modelling

Causal Link Arrow (Continuous)

Movement of Elements ---- Arrow (Dashed)

Positive Relationship (+)

Negative Relationship (-)

Negative Feedback

Positive Feedback


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System Dynamics Approach:

Real Life Case Study

The Causal Flow Diagram of the influentialfactors with demand

A real life case study hasbeen developed as an MSc

project under supervision of

Dr Ammar Al-Bazi at Teesside

University. The case study

was about identifying anumber of factors that can

affect or influence

acceptance of a particular

construction technology. A

survey was developed inorder to identify the reaction

of people about certain

technology used to produce

precast buildings.


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Modelling of Financial ProblemsThe relationship between

financial factors can bemodelled in terms ofsystem dynamics modelin order to identify a set

of relations that can beused to numericallycalculate the desiredoutputs.

In this model, relationshipsbetween imitators, innovators, andadopters have been modelledusing the requiredfeedback relationships.

lecture 4 - simulation approaches ii system dynamics approach

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