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## Methodology for SYSTEM DYNAMICS

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**Dynamic problems**• There is change over time • The changing character of the situation IS THE PROBLEM • The problem should be studied in aggregates • The problem does not have a significant stochastic component or complexion to it**Start with descriptions of the following**• PURPOSE • PERSPECTIVE • PROBLEM • MODE**What are we doing here????**• Attempting to characterize, cope with and understand complexity • Especially DYNAMIC complexity • Inventing a physics for a systems or process for which there exists no physics • You get to become a Newton, a Liebnitz, a Galileo, an Einstein, a ….**Steps**• Be problem-driven • Interview people familiar with the problem • Gather verbal descriptions of the problem • Formulate a list of variables • Develop a causal loop diagram • Develop a stock-and-flow diagram • Create a working simulation in VENSIM**Problem**Problem SD Model Mental Model Mental Model Decision Decision Action Action**Uses to which these models can be put**• What IF experiments—hands on experimentation • Decision making • Planning • Problem solving • Creativity • Out of the box thinking • Hypothesis testing • LEARNING**The Methodology once problem is identified**• Find substance • Delineate CLDs, BOT charts • Submit these for outside scrutiny • Delineate SFD • Implement simulation in VENSIM • Submit for outside scrutiny • Utilize model for policy experimentation**Find substance**• Written material • Books • Articles • Policy and procedure manuals • People’s heads • Order of magnitude more here • Must conduct interviews, build CLD’s, show them to the interviewee to capture this**Delineate CLDs, BOTs**• Collect info on the problem • List variables on post-it notes • Describe causality using a CLD • Describe behavior using a BOT diagram**Submit these for outside scrutiny**• We simply must get someone qualified to assess the substance of the model**Delineate SFD**• Translate CLD into SFD**What are stocks and flows??**• A way to characterize systems as stocks and flows between stocks • Stocks are variables that accumulate the affects of other variables • Rates are variables the control the flows of material into and out of stocks • Auxiliaries are variables that modify information as it is passed from stocks to rates**Stock and Flow Notation--Quantities**• STOCK • RATE • Auxiliary**Stock and Flow Notation--Quantities**• Input/Parameter/Lookup • Have no edges directed toward them • Output • Have no edges directed away from them**Inputs and Outputs**• Inputs • Parameters • Lookups • Inputs are controllable quantities • Parameters are environmentally defined quantities over which the identified manager cannot exercise any control • Lookups are TABLES used to modify information as it is passed along • Outputs • Have no edges directed away from them**Stock and Flow Notation--edges**• Information • Flow**Some rules**• There are two types of causal links in causal models • Information • Flow • Information proceeds from stocks and parameters/inputs toward rates where it is used to control flows • Flow edges proceed from rates to states (stocks) in the causal diagram always**Robust Loops**• In any loop involving a pair of quantities/edges, • one quantity must be a rate • the other a state or stock, • one edge must be a flow edge • the other an information edge**CONSISTENCY**• All of the edges directed toward a quantity are of the same type • All of the edges directed away from a quantity are of the same type**Population problem**• Population has grown in the last 102 years from 1.65 billion persons to 6.1 billion persons on planet earth • WHAT IS THE CARRYING CAPACITY OF THE PLANET?? • Depends on what material standard living you assume • Birth rates, due to improved health, and death rates are lower due again to improved health • Corresponding to each, there is a “normal” condition**VARIABLES**• Population • Birth rate • Death rate • Death rate normal • Birth rate normal**Converting to a STOCK AND FLOW Diagram**• What is a STOCK? • What is a FLOW? • What is a RATE? • What is a parameter?**The Sector Approach to SD model formulation--**• Begin by identifying the sectors • A “sector” is all the structure associated with a single flow • There could be several states in a single sector**The sector Approach, Continued**• Determine the within-sector structure • Reuse existing “molecules” where possible • Determine the between-sector information infrastructure • There are no flows and therefore no stocks or rates here**A Single-sector Exponential goal-seeking Model**• Sonya Magnova is a television retailer who wishes to maintain a desired inventory of DI television sets so that she doesn’t have to sell her demonstrator and show models. Sonya’s ordering policy is quite simple--adjust actual inventory I toward desired inventory DI so as to force these to conform as closely as possible. The initial inventory is Io. The time required for ordered inventory to be received is AT.**A Two-sector Housing/population Model**• A resort community in Colorado has determined that population growth in the area depends on the availability of hoousing as well as the persistent natural attractiveness of the area. Abundant housing attracts people at a greater rate than under normal conditions. The opposite is true when housing is tight. Area Residents also leave the community at a certain rate due primarily to the availability of housing.**Two-sector Population/housing Model, Continued**• The housing construction iindustry, on the other hand, fluctuates depending on the land availability and housing desires. Abundant housing cuts back the construction of houses while the opposite is true when the housing situation is tight. Also, as land for residential development fills up (in this mountain valley), the construction rate decreases to the level of the demolition rate of houses.**What are the main sectors and how do these interact?**• Population • Housing**What is the structure within each sector?**• Determine state/rate interactions first • Determine necessary supportng infrastructure • PARAMETERS • AUXILIARIES**What does the structure within the population sector look**like? • RATES: in-migration, out-migration, net death rate • STATES: population • PARAMETERS: in-migration normal, out-migration normal, net death-rate normal**What does the structure within the housing sector look like?**• RATES: construction rate, demolition rate • STATES: housing • AUXILIARIES: Land availability multiplier, land fraction occupied • PARAMETERS: normal housing construction, average lifetime of housing • PARAMETERS: land occupied by each unit, total residential land**What is the structure between sectors?**• There are only AUXILIARIES, PARAMETERS, INPUTS and OUTPUTS**What are the between-sector auxiliaries?**• Housing desired • Housing ratio • Housing construction multiplier • Attractiveness for in-migration multiplier • PARAMETER: Housing units required per person**Can you construct the schematic model for this Causal model?****Some rules**• There are two types of causal links in causal models • Information • Flow • Information proceeds from stocks and parameters toward rates where it is used to control flows • Flow edges proceed from rates to states (stocks) in the causal diagram always**Loops**• In any loop involving a pair of quantities/edges, • one quantity must be a rate • the other a state or stock, • one edge must be a flow edge • the other an information edge**CONSISTENCY**• All of the edges directed toward a quantity are of the same type • All of the edges directed away from a quantity are of the same type**STEP 1: Identify parameters/inputs**• Parameters have no edges directed toward them**STEP 2: Identify the edges directed from parameters**• These are information edges always