Transpn. Res.-A.Vol.28A,No. 5, pp.

373-400, 1994
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SYSTEM DYNAMICS APPLICABILITY TO

TRANSPORTATION MODELING

KHALED A. ABBAS
The Egyptian National Institute of Transport, P.O. Box 34 Abbassia, Cairo, Egypt
and
MICHAEL G. H. BELL
Transport Operations and Research Group, University of Newcastle upon Tyne, Newcastle upon
Tyne, NE1 7RU, United Kingdom
(Received 12 October 1991; in revised form 21 February 1993)

Abstract -The main focus of this article is to review and evaluate the strengths and weaknesses of
system dynamics (SD) with respect to its suitability and appropriateness in transportation model-
ing. This evaluation helps in appreciating how the SD modelingstyle can contribute to understand-
ing better the relationships between elements of the transport system and between transport and
its environment. It establishes the ease with which system dynamics can be applied to construct
useful tools for testing alternative transport-related policies.

INTRODUCTION
Transportation systems are multi-dimensional in that they are multi-modal, multi-
sectoral, multi-faceted, multi-problematic, multi-purpose, multi-operational, multi-or-
ganisational, multi-effect, multi-ownership, multi-network, multi-technological, and
multi-disciplinary. In complex, large-scale systems, like transport, problems are rooted in
the basic structure of the system. Actions taken to deal with one problem may create
difficulties elsewhere.
Investment in transport affects, and is affected by, investments in other sectors.
Simplistic, step-by-step approaches do not cater to the dynamic interactions that exist
between the elements. What is needed is a system-based approach.
A system is a number of components integrated into a complex entity, and system
analysis simply means the consideration of the entity rather than the separate consider-
ation of individual components. The systems approach can be defined as an organised,
efficient procedure for representing, analysing and planning complex systems. It is a
comprehensive, problem-solving methodology that involves two main steps:

1. The rational and creative structuring of both quantitative and qualitative knowledge,
mainly in the form of models, to represent problems; and
2. The development of analytical techniques through which the problem can be analysed
and solved.

System analysis is needed to treat problems in a comprehensive manner. System

dynamics (SD), a member of the family of systems approaches, provides a systematic
framework for modeling and understanding a number of transport issues. Transportation
problems are holistic. They require integrating various forms of knowledge. They involve
compensating feedback loops as well as counterintuitive behaviour. They comprise long-
term/short-term trade-offs. Other characteristics of transportation problems are dis-
cussed in this article. The authors believe that SD modeling is designed precisely for
problems possessing these characteristics. Through using SD, attempts could be made to
manage and control transport systems in a better way and present plausible solutions to a
lot of transport problems.

373
374 K . A . ABBAS and M. G. H. BELL

SYSTEM DYNAMICS

SD, originally called industrial dynamics, was developed at the Massachusetts Insti-
tute of Technology (see Forrester, 1961). It is a powerful methodology that derives its
roots from system theory, cybernetics, information science, organisational theory, feed-
back control theory, military games and tactical decision-making. The main function
of SD is to construct models of complex problems and to experiment with them on
computers.
SD pioneered the use of system concepts and computer simulation for the analysis of
complex problems in business and management. It is a methodology of wide applicability
that has become an appealing modeling style used by many different disciplines. Applica-
tions of SD cover a wide spectrum of different fields, disciplines and subjects. These
include applications in defence, urban and regional development, business, banking,
industry, economics, finance, manufacturing, biology, education, health, medicine, den-
tistry, engineering, forestry, fishery, energy, environment, transportation, psychology
and various others.
From its name it can be inferred that SD is a methodology designed to help in
understanding the dynamics of different real-world systems. SD is based on control
theory, sometimes referred to as the concept of servomechanisms. This presents a proce-
dure for investigating and understanding a system that is in the form of causal feedback
relations.
There are two types of feedback relations-namely, negative and positive feedback
loops. The negative feedback control procedure attempts to adjust the actual state of a
system to achieve a desired state. These changes are brought about by decisions to imple-
ment control actions, which are attempting to narrow and close discrepancies (whether
positive or negative) that exist between desired and actual conditions of the system. As
stated by Forrester (1975), "the basic structure of a feedback system is a loop, within
which the system condition provides the input to a decision process that generates action,
which modifies the system c o n d i t i o n . . , this does not imply that the system must reach
the equilibrium that is sought. The interacting efforts toward goals may keep the system
continuously out off balance" (see Fig. 1). On the other hand, the positive feedback loop

Goal

, Difference
(Gap) [

Action
Current 0
State
Delays

Actual
Performance
= Physical or information F l o w
q I
0 F e e d b a c k Loop
8oume: (Adapled from Formatmr, 1876)

Fig. 1. A closed loop, the basic structure of a feedback system.

 Systemdynamicsin transportation modeling 375

is known to be a self-changing destabilising loop. It reinforces growth or decline behav-

iour of variables in the loop. All dynamic behaviour occurs when flows are accumulated
(integrated) into stocks. An SD model is a mapping of a system's important (to the
problem being addressed) stock-flow structure, where the stocks and flows are embedded
in feedback loops. Note that it is not mathematically necessary to have feedback to have
dynamic behaviour (all you need are stocks and flows), but that most actual social and
economic systems (e.g. transportation systems) possess feedback loops.
Adapted from Wolstenholme (1989), SD is defined as a rigorous method for qualita-
tive description, exploration and analysis of complex systems in terms of their processes,
information flows, organisational structure; delays, policies, decision rules and strategies.
It facilitates quantitative analysis of systems, in terms of their behaviours, through com-
puter simulation. SD provides a framework for the testing of policies and the manage-
ment of systems to achieve improved system behaviour.

STRUCTURALCOMPONENTS OF SYSTEM DYNAMICSMODELS

SD models consist mainly of three types of e q u a t i o n s - n a m e l y , rates, levels and
auxiliaries (see Fig. 2). Rates represent the physical or information flows in a system
(material, orders, money, people, equipment etc.). Basically, rates exemplify streams of
actions, decisions or activities that cause the state of the system to change. Levels repre-
sent the current state or condition of a system. A level is basically equal to the value of
the same level at the previous point in time plus the net inflow/outflow of rates across the
time increment. From a calculus point of view, levels are considered to be integrations of
rates, whereas rates are time derivative of levels. Auxiliaries represent the algebraic or
integral calculations that are mainly required to capture information necessary for the
computation of rates. Thus auxiliaries simplify the computation of complex rates by
algebraically splitting the computation of rates into several mathematical steps that are
convenient to grasp, understand, formulate and present.
Most variables in SD models reside within feedback relationships and are thus endog-
enous (i.e. determined within the model itself). Relatively few variables are specified
exogenously by the model user (i.e. influence the system but are not influenced by it). In

AUXILIARY

l DELAY ~l'
LEVEL ~ RATE

CAUSAL REPRESENTATION

t
| PHYSICAL/IN FOF~4ATION~

LEVEL I " ~ ~ .J~ ~2

SYSTEM DYNAMICS REPRESENTATION

DISCREPANCY = AUXILIARY
CONTROL ACTION • RATE
ACTUAL STATE - LEVEL

Fig. 2. Main types of variables used in systemdynamics.

376 K. A. ABBASand M. G. H. BELL

SD modeling, the behaviour of a system is mainly determined by its structure. However,

exogenous variables generated independently are also important to show how the endoge-
nous structure of a system reacts to externalities.
The distinction between flows o f real physical/material quantities and flows of infor-
mation should be clear. Physical flows are conserved flows that comply with physical
rules. Information flows comply with their own particular laws. Information need not be
conserved, and it may be at more than one place at the same time.
In SD, time lags are explicitly taken into account. A lag in time is defined as the
delay in time between the starting of an action and the ending of this action. There are
two types o f time delays: information ~nd physical. Time delays are a characteristic o f
real-world systems.
Computer simulation models based on SD provide controlled experimental environ-
ments. The results from the models are arrived at through a feedback framework. Vari-
ables are linked in closed chains of causal relationships forming feedback loops. The
models are made up of many such loops linked and interrelated together. Positive feed-
back loops generate amplified growth or decline (i.e. they feed back upon themselves).
Negative feedback loops generate goal-seeking growth or decline (i.e. they feed back
toward achieving a stable target). A classical example of a positive feedback loop is births
causing population growth. An example of a negative feedback loop is the thermostat,
which adjusts the temperature of a room to a given specified value. The behaviour of a
system is generally governed by the combination and the strength of the feedback loops
that form the structure of the system. Nonlinear couplings often join feedback loops
together in an SD model and cause the strength and dominance of the loops to change
over time. This is important for understanding the behaviour of an SD model.

STEPS FOLLOWED IN BUILDING A SYSTEM DYNAMICS MODEL

The process of constructing an SD model induces an understanding of a modeled

problem. The procedure involved in building an SD model is displayed in Fig. 3. In
progressing from one stop to the next, the modeler moves backward and forward in an
iterative fashion, working toward improving the model. The following subsections pres-
ent a discussion of each of these steps in some detail. The process involved in the develop-
ment of an SD model should not be looked on merely in terms of a final output; rather it
should be perceived as a means for learning, accumulating knowledge and performing
qualitative and quantitative analysis about a system.

~tCf
OTHER IDENTIFICATIONOF A PROBLEM
INFLUENCES ¢

DECISION
MAI,,~NG I DECISION'SUPPORT/ SYSTEM VERBALISATION
PROCESS SYSTEM UNDERSTANDI]NG [MENTAL MODELLING]

T
SYSTEM ANALYSIS SYSTEM CONCEPTULISATION
POLICY/SCENARiO/SENSITIVITY [DIAGRAMMATICMODELLING]
TESTS 1-CAUSAL DIAGRAM

t
MODEL SIMULATION
2-FLOW DIAGRAM

MODEL FORMULATION
l [MATHEMATICALiODELLING]

MODEL PROGRAMMING~
tCOM~UTE~ MODEmNCi

Fig. 3. Building a system dynamics model.

 System dynamics in transportation modeling 377

Identification o f a problem
Whenever practical difficulties a n d / o r limitations are encountered in dealing with
any real-world systems, politicians, scientists a n d / o r researchers could identify this as a
problem area. Consequentially, the potential problem requires careful thought and in-
spection prior to research efforts.

Definition of a problem
A model builder must establish a clear definition o f a problem in general terms. He
or she must identify the specific questions that the model is attempting to answer, and
consequentially the objectives and purposes o f the model. Another important aspect is to
identify the users who are expected to apply the model. These are crucial steps that can
often dictate the general characteristics, the context and the dimension demarcation of
the model to be developed. They involve establishing the purpose, the scope, the bound-
ary (the breadth) and the level of detail (depth) o f the model. In this context, a system
dynamicist tends to develop what is known as a reference mode. A reference mode
attempts to define the problem at hand in terms o f graphical or verbal representations.
Three types of X-Y graphical representations can be drawn. The first type displays the
behaviour of the major variables that are thought to describe the problem over time. In
doing so, available time series data can be used. The second type of graphical representa-
tions presents the expected futuristic behaviour of variables. The third type of graphical
representations depicts metaphysical variables such as happiness, anger, sadness, and
frustration. The dynamic behaviour of variables such as these can be specified by appeal-
ing to a modeler's "mental model" without the need for measured time series data.
According to Randers (1980), "the identification and description of a reference mode
greatly facilitates the selection of the basic causal structure of the m o d e l . . , it simplifies
decisions on what to leave o u t . . , keeps the attention of the modeler squarely fixed on
what m a t t e r s . . , and ensures that the initial model embraces the essential dynamics."

Variable generation and model development

Models are finite entities, and it is implied that in all modeling approaches some
variables are to be included and others are to be excluded. It is not easy to select which
variables to include in a model. What is more difficult is to decide which variables to
include as exogenous to the model. "Moreover, many other variables are omitted from
the modeling framework on the grounds o f not being relevant to the task in hand, too
difficult to forecast or expected to change little and not influence the system of interest"
(Ortuzar and Willumsen, 1990). Such inclusion and exclusion of variables depend mainly
on the mental perception of the modeler to the defined problem. Although at the end of
the day the modeler is responsible for which variables are included and excluded, there
are sources of information that he or she may use to help identify and select variables and
construct and develop the functional relations of an SD model, some of which follow.
Sources of information. The following are some o f the sources of information and
procedures that modelers can use in structuring their models:

1. Personal observations and direct individual experience of the modelers

2. Literature search and content analysis
3. Descriptive and formal (theoretical) knowledge
4, Other existing models, facts, evidences, accepted theories, assumptions and hypotheses
5. Existing data (making use of statistical calibration and empirical estimation tech-
niques)
6. Heuristics, intuitions, visions and inventions of actors as well as of modelers involved
with a system
7. Deterministic a n d / o r stochastic specifications.

Knowledge acquisition. There are two levels o f knowledge elicitation. The first is the
individual level, which includes the following methods:
378 K. A. AaaAS and M. G. H. BELL

1. Clinical interviews with individuals to get an insight into their perceptions, beliefl
thoughts, views, values and impressions. Interviews can be structured or open ende
(i.e., unstructured interviews).
2. Nominal and judgmental questionnaires. These include choice, ranking and ratin
questions used to determine individual choices, preferences and attitudes. Examples o
these are the revealed preference, the stated preference and the attitudinal surve
questionnaires.

The second level of extracting knowledge and information is the group level. This involve
eliciting knowledge and soliciting information from experts. This can take the form o
expert opinions, mental concepts, consensus, practices and experiences. The followin
are some of these techniques:

1. Cognitive techniques such as Delphi (see Linstone and Turoff, 1975)

2. Brainstorming
3. G r o u p meetings
4. Discussions
5. Structured workshops.

These techniques for extracting and capturing knowledge are well established il
psychology and social sciences literature, as well as in behavioural and system structur
studies. A relatively recent development in this field is the introduction and developmen
o f computer software like S T E L L A and computer-based expert systems that are designe~
to help in the process of acquiring knowledge and information about a particular problen
or system. For a more detailed discussion and review of knowledge elicitation technique
that can be used in constructing SD models, see Richardson et al. (1989) and Fey ant
Trimble (1992).
The SD modeling procedure acts as a filter through which the aforementionet
sources of information could be synthesised. Synthesisation entails the explicit expres
sion, organisation, structural mapping and transfer of available information to a set o
quantitative relationships.

System verbalisation
Verbalisation mainly involves the clear explanation and description in writing of th,
mental concepts that form the foundation for developing a model of a particular system
Verbalisation entails stating explicitly all the relevant sources of information on which th,
logic of the structural relations of the model is based. The variables and parameters tha
describe the system are identified and selected. This includes choosing variable names
stating the directions of influence between variables, stating the types of influence
(whether positive or negative) and explaining the rationale and hypothesis involved il
formulating the model. The main advantage of the verbalisation step is that it acts as
communication medium. This allows people to scrutinise and understand the model ant
to gain better insight into and appreciation of the variables that are used in structurinl
the model relationships.

System conceptualisation
This involves developing a sound structural representation of a system in the form o
causal and flow diagrams. These diagrams are intended to permit a more precise qualita
tive description and appreciation of the structural components of the system. It is appro
priate at this point to assert the phrase, "One diagram could be worth a thousand words.
Diagrams illuminate the mental concepts and the verbal explanations of a system.
Causal diagrams. Causal diagrams, sometimes referred to as system maps or influ
ence diagrams, are simply the representation of the verbal description of a model in
graphical form. These graphical portrayals use the concept of signed digraphs, showinl
the full names of variables linked together by arrows that demonstrate the directions o
influences (dependencies) between the variables. The nature of the causal link could bq
 System dynamics in transportation modeling 379

described in terms o f being either positive or negative. "Positive causality between A and
B could be defined as: A has a positive influence on B if A adds to B, or if a change in A
results in a change in B in the same direction. Negative causality between A and B could
be defined as: A has a negative effect on B if A subtracts from B, or if a change in A
results in a change in B in the opposite direction" (Richardson, 1986). Individual linkages
in a causal loop diagram are made ceterisparibus (i.e. with everything else held constant)
and they can be thought of as partial derivatives. Delays (namely, the existence of time
lags between a cause and an effect) should be identified and marked.
The causal interrelations form feedback loops, thus exhibiting the feedback mecha-
nisms that characterise the structure of a system. A feedback loop is identified when the
linkage between variables starts at one point and goes on in a cyclic path ending at the
same point and passing through at least one level variable. The polarity of a loop is
determined by multiplying the signs around the loop. If the outcome is negative the loop
has a negative net effect, whereas if the outcome is positive the loop has a positive net
effect. However, the preferred way of determining whether a loop is positive or negative
is to trace through the effects of an external shock to a variable (an increase or decrease)
as it propagates around the loop. If the shock is reinforced, the loop is positive. If it is
counteracted, the loop is negative. Conceptual errors can be caught and corrected in this
manner (i.e. people often place a minus sign where a plus sign should go, or vice versa).
However, it is fair to note that many SD modelers use causal loop diagrams just to
document a n d / o r present portions of an existing model to an audience. They use generic
structures, rather than causal loop diagrams, to assist them in the modeling process. A
generic structure could be defined as a causal building block that can be used repetitively
in mapping multiple models describing similar phenomena. For a more detailed discus-
sion of generic structures, see Paich 0985).
Flow diagrams. Using a set of specially devised SD diagram conventions, the causal
diagrams can be transferred from the signed digraph form into flow diagrams. These SD
conventions distinctly identify rates, levels, auxiliaries, constants, delays and exogenous
variables (see Fig. 2). The type of connections between variables, whether an information
or a physical flow, are distinguished. As a result, the system variables and the feedback
loops are classified in a manner that allows easy and quick computer programming and
simulation. To demonstrate the steps of system conceptualisation, two examples are
shown in Figs. 4 and 5. The examples are mainly concerned with the construction and
maintenance of roads.
It is obvious that SD modeling relies heavily on the diagrammatic representation of
systems. Diagrams are considered to be an essential step of the SD modeling procedure.

Total Permlttld = Balance Of Road Const.

Road KIIometm8 4 Roadl Still I Colt Per
To Be Conltructed I Kitometre

't
ROad Delay Road 1 I
Kllornetrel: a6 Conltruotton
Level Rate

ROad /.b
CAUSAL DIAGRAM ConltruGtlon
Fundi

TPRK

IRCRI i
FLOW DIAGRAM

Fig. 4. Main stages in developing a qualitative system dynamics model: an example of road construction.
380 K . A . ABBAS and M. G. H. BELL

KIIomltrll of Roadl Bllanoo Of R01d Mllnt.

Requklng MalnWmmee w Roidl 8till I Colt Per
TO Be Maintained /KIk~metre

't
M i n g l e d Road DIlay
l" 1
Road n
KIIometrel: ab Milntonlnce
Level RIm

RoM ,~"
CAUSAL DIAGRAM Malntlnlnol
Fundl

KRRM
-.0 nl

FLOW DIAGRAM L----J

Fig. 5. Main stages in developinga qualitative system dynamics model: an example of road maintenance.

If diagrams are well designed and structured, formulating and developing SD models
mathematically become relatively quick and easy. In fact, there are commercial programs
that do both of these operations at once (e.g. the S T E L L A and I T H I N K software
packages for the Macintosh). These allow the modeler to connect level and rate icons
with a mouse, and the software automatically generates the corresponding equation in a
different window.
In summary, the main functions o f diagrams are to

1. Record the way in which the system works;

2. Organise the mental and verbal models of a system in a way that displays and explains
the causality o f its components;
3. Identify the feedback loops of a system being modeled;
4. Enhance communication, a medium through which mental soft models are filtered and
translated into more consolidated notions (according to Forrester, 1975, "SD verbal
and descriptive recording serve as a vehicle for the transfer o f knowledge and experi-
ence"); and
5. Provide an inspiring educative m e d i u m - d i a g r a m s are helpful for thinking, overview,
discussions, debate and documentation.

SD is a strong and distinct member of the family of structural modeling approaches.

Willumsen (1980) defines structural modeling as the "techniques for making explicit and
visible the implicit mental models held by politicians and planners. The idea behind them
is to develop an explicit and often graphic representation of the relationships thought to
be important in a particular problem." A transport study that reviewed, applied and
developed some of the main structural modeling techniques was conducted by Santos
(1987).

Model formulation
Building on the aforementioned steps, the mathematical formulations that represent
the structural relations o f an SD model are written. These provide the means to examine
quantitatively the structure of a system. SD is used to model, understand and enhance the
management of physical and social systems. Although in social systems many relation-
ships are highly qualitative in nature and difficult to represent quantitatively, most of the
relationships describing physical systems can be quantitatively modeled. Sensitivity tests
could play an important role in the formulation of SD models. The mathematical formu-
lations o f an SD model define the modeled system in terms of a set of linear and nonlinear
equations.
 System dynamics in transportation modeling 381

Computer programming
Having carefully formulated the structure of an SD model, D Y N A M O or any other
computer language can be used to program the algebraic relations of the model and code
them into an executable computer program. The software is then debugged and the logic
of the p r o g r a m m verified. I f D Y N A M O or any similar computer language is chosen, the
SD flow diagrams could be converted directly into a set of algebraic equations. This
substantially reduces the time and effort involved in the model formulation stage.

Simulation
Simulation is intended to show the behaviour of the system in quantitative terms.
The output of the simulation reflects the consequences of the structure used for formulat-
ing the model. C o m p u t e r simulation runs show the most likely impacts of alternative
policies on the state and performance of a system under study. Simulation serves this
purpose in a relatively cheap, short, accurate and safe manner. SD simulation entails the
numerical integration of the system equations over time.

System analysis
If the output of a simulation run shows inadequacies (namely, something odd or
wrong) the modeler asks why, looks for the answer by examining and assessing the
structure of the model, modifies and develops what he or she thinks is necessary, tests the
model by a new simulation run and so on. This cyclic procedure of model inspection,
interpretation, revision and simulation is one of the great strengths of the SD methodol-
ogy. If the modeler follows this procedure, the model improves greatly, and the modeler
gains a thorough understanding of the system being modeled. Additionally, the output of
models supports decision-makers in improving their decisions regarding the choice of
which policy to implement.
The mathematical relationships of an SD model require quantification. The values
of parameters and initial values of levels should be specified and supplied to the model.
Initial values of the variables of the model are set to represent the conditions at the
initial time of the simulation. From that point onward, the model computes variables
endogenously based on the specified mathematical relationships.
The model calculates the value of each of the variables at each point of the simulated
time. The computer keeps track of the ways in which these variables relate to one another
over time. These calculations repeat themselves until the specified period of simulation
has expired.
It is the time-dependent aspect of the SD methodology which is the most useful for
planning purposes. With it, the impact of specific changes can be traced over time and
evaluated. Without it, the dynamic aspect of change is lost. Therefore, an SD model
simulates performance patterns not as a result of extrapolation of trends, but through the
continuous application of rules and relationships that modify simulated conditions and
on which subsequent understanding and decision analysis are based. The system structure
is usually more important than the assumed numerical values in determining the modes
of behaviour that a system may exhibit.
Most o f the SD model variables are determined endogenously from the interplay
with other variables. The remaining variables, particularly the ones associated with state
long-term growth, are exogenously specified by the model user. These are permitted to
vary modestly as the remainder of the model is simulated in time. The cause-and-effect
forces, which produce the behaviour of these exogenous variables, are outside the scope
of the model. Some of these external conditions have an important influence on the
model behaviour. These can be easily varied, singly or in various combinations, from one
simulation to another to analyse the impacts of alternative scenarios and policy options.
Stated in general terms, SD is a useful tool for

1. Understanding and explaining the dynamic behaviour of a system in terms of its

structure (causal relations and feedback loops) and policies, as well as improving the
conceptual models that explain the system;
382 K. A. ABBASand M. G. H. BELL

2. Designing, formulating and testing different scenarios and policies by posing and
answering "what if" questions;
3. Providing useful information, both to policy- and decision-makers, thus giving support
to the decision-making process in the field of strategic planning; and
4. Improving the management and control of complex systems. SD is a methodology
through which powerful management tools are developed to enhance the abilities to
control complex systems.

SUITABILITY AND APPROPRIATENESS OF SYSTEM DYNAMICS TO

TRANSPORTATION MODELING

Transportation models are developed to serve two main purposes. The first is to help
in reaching a better understanding of and gaining more insight into transport systems.
The second is to employ models, mainly in prediction a n d / o r policy analysis. However,
to date, and for a variety of reasons, forecasting models have had high margins of error.
The unreliability of forecasts can be attributed to the following reasons:

1. There is the possibility of errors in existing or collected data.

2. H u m a n behaviour is difficult to model.
3. The future is unknown (uncertainty).

The level of uncertainty in planning activities increases due to the length of the planning
horizon and the difficultly of reversing decisions once implementation starts. Therefore,
it is of little use when forecasting for the long term to offer more time and money for the
acquisition of input data.
In the following subsections, the suitability and appropriateness of SD to transporta-
tion modeling are explored. However, it is fair to state at this point that SD models are to
be used for gaining understanding and for policy analysis, rather than for prediction. An
insightful demonstration of the impossibility of point prediction in social systems is
contained in Forrester (1961).

Contemporary requirementsfor modeling transportationproblems

The nature of transport problems has evolved over the years, and so have modeling
requirements. Some of the main contemporary requirements for a better modeling of
transportation issues are as follows:

1. The various elements of transportation-related problems call for coordinated ap-

proaches to examining and solving problems. Comprehensive models are needed to
understand the feedback linkages between transport and other systems and to account
for the total impacts of transportation systems on their environments. Transport in-
vestments should be planned not only within the wide context of the national and
regional transportation systems, but also within the wider context o f the goals and
objectives of the overall national and regional economic development. Reorientation is
needed in transport planning (particularly in developing countries) from the standard,
unidirectional, piecemeal, issue-by-issue approach to the holistic, ratiox alistic, system
approach.
2. Planning models are required that generate insight and help in enhancing understand-
ing of the complex, long-term intra- and interrelations among the transport system and
other related systems.
3. The dynamic feedbacks between the supply of transportation facilities and the demand
for services should be explicitly accounted for. There are three main areas that change
dynamically in transport systems: the demand for travel, the technology and level
of supply of transport services and facilities, and the evaluation criteria on which
decision-making is based.
4. Transportation planning is a long-term task that is subject to risk and uncertainties and
 System dynamics in transportation modeling 383

hence requires the integration of both deterministic and stochastic modeling efforts.
5. Policy-oriented planning techniques that can generate and test a variety of alternatives,
without the need to collect and analyse huge volumes of data, should be fully pursued.
Models which require data that are easy to collect, verify and use efficiently should be
developed. Simple, transparent, creative and user-oriented techniques for modeling
transportation systems should be explored and used.
6. Comprehensive, analytical models are required to simulate the nature and dynamics of
the decision-making process. If the resources available are to be employed to maximum
advantage, it is necessary to weigh the merits of various combinations of input. Re-
search is needed to look at the decision-making process and the allocation of resources
and to develop transport management tools intended to ease the dilemma faced by
transportation decision-makers when attempting to reach rational, informed decisions.
7. Evaluation of transportation policies should be based both on long- and short-term
impacts.

Need f o r appreciation o f consequences o f alternative transport in vestment policies

There is a genuine need to develop transport models that are capable of showing the
consequences of a broad range of transport investment policies. These are meant to aid
decision-makers in attaining an appreciation of such consequences. The need for such an
awareness arises more in developing countries for the following reasons:

1. Investments in transportation constitute a high percentage of public expenditure and

are known for their "lumpiness." However, transport is considered to play a strategic
role in a country's development.
2. Transportation investments may involve a high proportion of foreign exchange (of
which there is usually a scarcity) as well as of national capital resources.
3. Many transport projects are financed by foreign loans, and lenders often require as
complete an evaluation as possible.
4. There is the need for optimum allocation of resources because waste resulting from
random actions may have negative long-term effects.

H o w system dynamics might contribute to transportation modeling

In this study, SD is thought to be a technique well suited for modeling transportation
systems. The following are the claimed advantages of using SD as a modeling framework
for solving transportation problems:

1. SD furnishes a logical, systematic and detailed representation of complex large-scale

systems, such as transportation systems. In SD, representation entails modeling (in
terms of structure and policies) and simulation (analysing and testing) of systems.
2. Conventional transport modeling methodologies are oriented toward achieving a sup-
ply/demand equilibrium. This requires assumptions that are difficult to satisfy in
reality. In SD the dynamic, feedback interactions between supply and demand in
transportation systems are explicitly accounted for.
3. In most transportation studies, the land-use, socioeconomic and demographic fore-
casts are obtained using separate modeling techniques. These are then used as external
inputs into transportation models. This may ultimately result in inconsistencies and
incompatibilities in the modeling procedures, leading to inaccuracies of results.
Transportation planning lacks the comprehensive, holistic view in which feedbacks
between transport and other sectors are considered. This ignores the totality of im-
pacts that transportation systems may have on their environments. SD methodology
can provide a common framework through which transport and other related sectors
can be incorporated and modeled.
4. In SD models, data are mainly required to define reference modes, estimate parame-
ters, determine other parts of system structure and determine the model's initial
values. However, data may be collected later to fill gaps in constructed models and,
384 K. A. AaaAs and M. G. H. BELL

in fact, an SD transport model can act as a means for assessing the appropriate data
needed for future enhancement of the model.
5. The methodological advantages o f SD are such that the results o f an SD transport
model are mainly reached through the dynamic, causal feedback interactions of the
structural components of the model, as well as through empirically based formula-
tions. In contrast, in conventional statistical regression models results are reached
purely through empirically based formulations. The structural elements of an SD
transport model interact to produce a dynamic behaviour of the transport system.
Nonlinearities and time delays can be a c c o m m o d a t e d explicitly.
6. SD methodology can be used as a basis for constructing and testing a priori hypotheti-
cal models of different transportation problems. It can incorporate alternative policy
or structural assumptions, input data or empirical parameters. SD strives to incorpo-
rate relationships of subjective (behavioural) p h e n o m e n a rather than ignore and ex-
clude these relationships.
7. SD provides a rich and coherent conceptual working environment, which brings order
and makes the m a x i m u m use of the modeler's mental and modeling agility. This can
be achieved by formulating transport models, as much as possible, in clear, transpar-
ent and diagrammatic forms as well as in an algebraic form. Understanding gained
through building an SD transport model and manipulating that model can be as
useful as that gained f r o m long association with the transport system in the real
world. SD conceptualisation procedures can also provide a c o m m o n platform for
communication and understanding between the various parties that have interest in a
transport system.
8. SD can assist in developing experimental transport tools. These tools are meant to
provide flexibility in design and analysis and to enable tests to be made over a wide
variety of transport policy options and scenarios: The models can be used as training
tools to help familiarise transport personnel with the different transportation prob-
lems.
9. Through SD simulation, the short-term and long-term behaviour of a transport sys-
tem is traced. This can provide insight into the dynamic nature of the transport
problem and allow for timely adjustments to be made, if required.
10. Low cost, transparency, transferability and ease of updating are characteristics that
support the application of SD to model transportation problems.
11. Building transport models using the SD approach can help in identifying controls in
the transport system being modeled. These controls are meant to guide the efforts of
policy-makers regarding which parameters a n d / o r structures of a transport system
could be managed and controlled to produce better performance of the system.
12. According to Willumsen (1990), "a transport model is not simply a set of mathemati-
cal instructions used to simulate and forecast travel demand, it implicitly structures
the way in which transport problems are viewed and understood and the type of
solutions that are considered feasible and testable." SD methodology can provide a
foundation for structuring thoughts and building a better understanding of complex
transportation systems and their underlying problems.

Limitations of system dynamics with respect to transportation modeling

In line with the aforementioned issues, some limitations of modeling using the SD
approach are identified and discussed. Some of the following limitations could be looked
on in a general context, whereas others are specific to the modeling of transportation
systems.

1. SD, as a simulation technique, works mainly through the time dimension. Spatial
aspects and distribution effects are not easily accounted for.
2. Most SD models are aggregate models intended to show policy impacts in terms of
approximate magnitudes and directions of change. However, SD models could be
 System dynamics in transportation modeling 385

further refined to describe the system in a more detailed form, thus providing numeri-
cally accurate output.
3. Generally, SD models are deterministic in nature, yet randomness and stochasticity can
be easily incorporated, thus accounting for future uncertainties and variabilities.
4. The main aim of an SD model is to aid policy-makers in reaching an optimum design
policy. In complex systems, heuristic optimisation (i.e. manual trial and error with the
system) can become a tedious and difficult task. A number o f computerised optimisa-
tion algorithms have been specially developed for the SD type of models, and these
should be more usable whenever available and required.
5. The validity of SD models has been a subject of debates throughout the years. In
general, it is difficult to establish the validity of structurally based simulation models
such as the SD type o f models. In SD, validity is interpreted as model usefulness rather
than numerical exactness. The SD literature includes a wide range o f both qualitative
and quantitative validity tests. These tests are meant to increase confidence in SD
models and to withstand any criticisms. Some of these tests are available in software
form. Further efforts to automate and facilitate the use of these tests should be pur-
sued.

SYSTEM DYNAMICS IN TRANSPORTATIONSTUDIES

An extensive review o f most o f the relevant studies that applied SD methodology to

different transport-related issues is presented. The information extracted from this review
is presented in tabular form in the Appendix.
The diversity o f the transport topics addressed by the studies reviewed in this article
demonstrates that SD is well suited to catering to the needs o f several analytical problems
in transportation.
Most of the studies that applied SD to handle a transport problem or to model a
transport issue recognise that the outputs o f the models are limited to being good enough
to show policy impacts, behavioural trends and levels of change across time in a highly
aggregate way. However, as components o f these models are further disaggregated and
refined, accurate numerical output could be obtained. The main point is that most of
these studies have tended toward using parameters at a macro, rather than a micro, level.
Aggregate models are simple, general and abstract. As a trade-off, they sacrifice the
consideration of important details and their dynamics. There is plenty of scope to extend
SD modeling toward developing micro-analytic models for various transportation issues,
and such models could provide more specific answers to the problems of transport.
The main purpose of this article is not to review specific studies in detail. Rather it is
directed toward unfolding, in a general context, the main characteristics of studies that
applied the SD approach to modeling and solving transport problems. This is meant to
demonstrate the applicability of SD to handling a wide range of transport-related issues.
In addition, it is hoped that this review can guide future research intending to use SD to
tackle specific transport issues. Other studies that we recently became aware of and that
applied SD methodology to different transport-related issues include Drew (1989, 1991),
Kuroda and Tsaur (1990), Pujantiyo et al. (1992), AI-Dawood (1993) and Verroen and
Jansen (1991, 1993).

CONCLUSION

SD is designed to help in understanding the dynamics o f different real-world systems.

In contrast to statism, dynamism could be referred to as the process o f change in condi-
tions o f a system over time (namely, the evolution of the behaviour of the system). In
reality, many systems are adaptive, counterintuitive and self-corrective. The most realistic
386 K. A. ABBASand M. G. H. BELL

way to represent the dynamic performance of such systems is for their behavioural dyna-
mism to be induced as a result of the feedback causal structures that describe such
systems. SD caters explicitly to the dynamic behaviour of systems. In general, dynamic
modeling has been widely applied in other disciplines. In transport it is steadily gaining
momentum in the midst of the conventional static planning approaches. This can be seen
in the growth of interest in dynamic assignment models.
According to Coyle (1978a), "the SD modeling approach seems to fulfill a need
which is not met by the standard planning and programming approaches, namely that of
providing for the concept of controllability." SD is a policy-oriented modeling technique
that provides a framework for the design of policies and the management of systems to
achieve improved system behaviour. The process of actually constructing an SD model
induces a substantial and extensive amount of intuition, understanding and learning
about a modeled system as well as about the available policy options and their anticipated
impacts on the behaviour of the system. SD is a versatile and flexible modeling approach.
In general terms, the main characteristics of modeling using the SD methodology are
as follows:

1. The system viewpoint;

2. Transparency of concepts through causal and flow diagrams;
3. Feedback analysis;
4. Fast, dynamic simulation;
5. Flexibility of scenario generation and policy testing; and
6. The possibility of optimisation.

In concluding this article, it would seem appropriate to state the following quotations
from several different studies. The first is from an OECD (1974) report in which a
thorough review of possibilities for simplifying urban transport models was carried out.
In this report, the transport models were mainly divided into three categories: (a) four-
step models; (b) demand models; and (c) urban dynamic development models. In review-
ing the urban dynamic development models, the report stated that "a third group consists
of models structured by methods of systems analysis. This is the most promising group,
though they are at the moment only global models. The basis of these models is the
Forrester model, mentioned in Urban Dynamics." Along similar lines of thought, the
ECMT (1975) report, in discussing the impact of infrastructural investment on industrial
development within an integrated land-use and transport context, stated that "the main
progress in this field may come from formulation in terms of systems on the lines pro-
posed by J. W. Forrester in works that are now famous (Industrial Dynamics, World
Dynamics, etc.)."
The third quotation is from Hansen and Kahne (1975). At the end of their appraisal
of modeling large-scale systems using dynamic systems modeling techniques invented by
Forrester, they stated that "the benefit derived from the modeling efforts of large scale
systems suggests that the techniques may be beneficially applied to other large-scale
systems. Transportation provides many problems of large scale where new and more
effective approaches are needed."
The fourth quotation is from Hazel (1989), who recommended that SD be used for
transportation studies and who stated that "indeed, SD offers a potential way forward
for transportation planning in general, which seems to be becalmed between disbelief in
the traditional four-stage model and a lack of a credible alternative."
The utility of the SD methodology regarding its appropriateness and suitability for
application to modeling transportation systems has been critically reviewed in this article.
Although the SD modeling concept has its limitations, the motivations for pursuing it for
solving transport problems are overwhelming. Current research activities in the develop-
ment of modeling methodologies and planning approaches for handling transport-related
issues are extensively involved with the refinement, improvement and adaptation of al-
ready existing techniques. Although this is to be encouraged, research efforts should also
be directed toward developing and creating novel approaches. Exploring, researching
 System dynamics in transportation modeling 387

and integrating other innovative approaches from other scientific disciplines should be
supported and encouraged. These research activities could make far-reaching contribu-
tions to the solution of rapidly changing transportation problems.
An important function of the various modeling approaches is to use them to develop
models (tools) that can act as credible supports to the policy- and decision-making pro-
cesses. Models that are carefully and diligently programmed act as intelligent amplifiers
that stimulate creativity and filter the mental models of users. These models are not in
any sense meant to replace decision-makers or even to inhibit their role in making deci-
sions; rather they are developed to help and support them in achieving better decisions.
The SD methodology can offer a lot in terms of better planning and solving transport-
related problems. SD should not be thought of as a methodology to replace or substitute
for the traditional transport modeling approaches. Rather it should complement and be
integrated with the existing approaches, to contribute, in a collective manner, to solving
transport problems. In particular, SD should be applied in strategic studies that are
concerned with policy analysis and decision-making in the field of transport.

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