Introduction system dynamics
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Introduction System Dynamics. Un instrument for System Thinking. Learning Objectives. After this class the students should be able to: recognize their cognitive capacity limitation to deal is dynamic systems;

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Introduction System Dynamics

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Introduction system dynamics

Introduction System Dynamics

Un instrument for System Thinking


Learning objectives

Learning Objectives

  • After this class the students should be able to:

    • recognize their cognitive capacity limitation to deal is dynamic systems;

    • understand the mean concepts of System Dynamics, such as feedback loop, delays; and archetype of systems; and

    • interpret System Dynamics diagrams


Time management

Time management

  • The expected time to deliver this module is 50 minutes. 20 minutes are reserved for team practices and exercises and 30 minutes for lecture


An experiment

An experiment

  • Suppose a simple supply chain that has been in steady-state for some time. The Retailer’s inventory has been constant at some level for a long time,


Steady state supply chain

steady-state supply chain

  • A retailer maintains an inventory of product that is shipped to customers on demand.

  • Upon shipping, the retailer always orders immediately from his supplier the same amount of product just shipped.

  • The supplier also is very regular. He always deliveries the product to retailer 7 days after the he places the order.

  • The supplier has never been out‑of‑stock (and never will be!).

  • No product shipped by the supplier is ever, or will ever be, defective, damaged or lost in transit.


Demand changes

Demand changes

  • Suppose, all of a sudden, the volume of demand from customer coming into the retailer steps up to a new higher level, and then remains there.


Sketch the new behavior

Sketch the new behavior

  • On the axes provided in Figure I, sketch the pattern you think will be traced by the level of the retailer's inventory, over time, following the one‑ step‑increase to customer demand. ( Each team has 5 minute to give a answer. )

Figure 1


The retailer s inventory behavior

The retailer's inventory behavior

  • following the step‑increase in demand, the Retailer's inventory will decline in a straight‑line manner for 7 days; it then will level off and remain at the new, lower level.


Cognitive capacity limitation

Cognitive Capacity limitation

“In the long history of evolution it has not been necessary until very recent historical times for people to understand complex feedback systems. Evolutionary processes have not given us the mental ability to interpret properly the dynamic behavior of those complex systems in which we are now imbedded.” Forrester, 1973


System dynamics

System Dynamics

  • In particular, to analyze how the interaction between structures of the systems and their policies determine the system behavior

  • Methodology to study systems behavior


Filling a cup of water

Filling a cup of water

  • Each team is invited to describe through any kind of diagram (or algorithm) the process to fill a cup of water. Imagine this as an exercise of operation management. (10 minutes)


Language causal diagram

Faucet

Position

Desired Water

Level

Perceived

Gap

Water

Flow

Current

Water

Level

Language: causal diagram


Feedback loop and delay

Feedback loop and Delay

  • When we fill a glass of water we operate in a "water‑regulation" system involving five variables:

    • our desired water level, the glass's current water level;

    • the gap between the two;

    • the faucet position; and

    • and the water flow.

  • These variables are organized in a circle or loop of cause‑effect relationships which is called a "feedback process.“

  • Delays are Interruptions between actions and their consequences


Feedback loop with delay

Faucet

Position

Desired Water

Level

Delay

Perceived

Gap

Water

Flow

Current

Water

Level

Feedback loop with delay


The means of arrows

Faucet

Position

Desired Water

Level

Influence

Influence

Perceived

Gap

Water

Flow

Influence

Current

Water

Level

Influence

The means of arrows


Negative feedback

+

Order

Placed

Desired Inventory

Level

+

-

+

Perceived

Gap

Supply

Line

-

Current

Inventory

Level

+

Negative feedback

  • Balancing Process for Adjusting Cash Balance to Cash Surplus or Shortage


Positive feedback

Sales

+

Positive Word Mouth

Satisfied Customers

Positive feedback

  • Reinforcing Sales Process Caused by Customers Talking to Each Other About Your Product


Archetypes of systems

Archetypes of systems

  • Certain patterns of structure recur again and again. These generic structures are named "systems archetypes".

  • Archetype systems are a set of reinforcing and balancing feedback and delays interconnected.

  • A relatively small number of these archetypes are common to a very large variety of management situations.

  • Approach developed to study system behaviors taking into account complex structures of feedbacks and time delays.

  • The industrial environment, seen as a set of stocks and activities linked by flow of information and flow of material submitted to time delays, is a typical object for System Dynamics study.


Creating our own market limitation

Creating our own Market Limitation


People express example

People Express example


People express example1

People Express example


Reference

Reference

  • Peter Senge,

  • The Fifth Discipline, 1990

  • Chapter 5


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