A04 Assignment: CLD

Cases for Mid-term Test

Score
TIARA SHINTA R (NPM. 2106663723)
BERPIKIR SISTEM – SALEMBA - 2021
 1. FISH BANK MODEL
Below you find a description of a very simple fisheries model, also known as the basic Fish
Banks model. The two main variables in a fisheries model are fish and ships. Suppose the
number of fish only increases through the fish hatch rate and decreases both through the fish
death rate and the total catch per year. Suppose that the fish hatch rate equals the fish times
the hatch fraction. The fish death rate is equal to the death fraction times the fish. The death
fraction is a function of the carrying capacity and the number of Fish.
The total catch per year depends on the number of ships and the annual catch per ship which is
a function of the fish density. The density is defined as the amount of fish in the fishing area
divided by the area.
Suppose that the number of Ships increases via the ship building rate which is a function of the
investment costs per ship, annual profits and fraction reinvested. The annual profits are
calculated as the revenues minus the costs. Assume that the revenues equal the total catch per
year times the fish price and that the costs equal the unit ship operating costs times the number
of ships.
• Make a CLD of this model. What can be learned from it?

• In case of undesirable conclusions, change the diagrams to turn undesirable into

desirable.
Modern fishing ships have sonar tracking and other high tech equipment to aid in finding and catching fish. As a result, the ships are able to return with nearly a full
load even if the fish population begins to drop. It is not until the fish population has dropped dangerously low that fishing companies detect any significant decline in
the catch. To represent this fact in a model we will need to redefine catch per ship and have it dependent on a new factor, that is density. Density is the number of
fish in the area where the fish population lives. The catch per ship will be 0 when density is 0. As density increases, catch per ship will increase. There is a feedback
loop present in this subsystem. An initial increase in the total catch per year increases the depletion rate of the fish population. As a result, fish density is lower than
it would have been, and so is catch per ship. Finally, the total catch per yeardecreases.

Area

Fish death
rate Fish density
Number B2
R1 of fish B3
Fish hatch
rate Catch per ship

“The connection subsystem contains the link

Total catch per
between the fish and the ships stocks. The
Number of year major characteristic of this subsystem is the
The ships delay between fish and catch per ship.”
investment
costs per ship R5
The ship Costs Revenues
B4 Fish price
building rate
The unit ship
operating
Annual Profits costs
 R1 Number B2 Fish death
of fish rate
Fish hatch
rate

Number of Total catch per B3

year Fish density
The ships
investment
costs per ship
Catch per ship
R5
B4
The ship Costs
building rate
Area

The unit ship Fish price

Annual Profits operating
costs

Revenues

Total Profits
2. HOUSING POLICIES
Real estate demand in densely populated urban areas with sufficient land
to extend is often rather price sensitive: declining property prices for
instance caused by relative oversupply, i.e. real supply exceeding real
estate demand, results in rapid demand rises. Construction companies
often initiate new projects based on the demand for properties. Increased
demand leads to new projects being initiated. Real estate construction
projects are often completed with relatively long delays of about 2-3
years. Many construction companies tend to operate in these areas. And
they are mostly unaware or do not keep track of construction projects in,

• Make a CLD of this description.

• What kind of dynamics would you expect to see in property prices?
• What would be an adequate strategy of a smart construction company?
• Make a CLD of this description.
Supply/Demand Ratio
Completed real estate
construction projects

R2 B1 Price

Delay Real Estate Demand

New Projects

Construction project by Densely populated urban

other companies area

• What kind of dynamics would you expect to see in property prices?

The kind of dynamics I would to expect to see in property price is market dynamics. Market dynamics are the interaction of supply and
demand as the basis for setting prices. A fundamental concept of macroeconomics is the relationship between supply and demand as the
principle forces behind the price of goods and services. Market dynamics consider how price patterns result from ongoing shifts in supply
and demand for specific products. Pricing signals occur when a shift in supply or demand results in a commensurate shift in the other. In
this case, suppose there is an increased demand for real estate. This results in a price increase that encourages real estate’s construction
project completed to increase output to meet the new level of demand. The result is in an increase in the supply of real estate. Real estate's
market price should consequently return to its level prior to the initial rise in demand once the supply increase stabilizes demand.
 1) Create a flow of communication - Communication is essential to every phase of any construction
project. Establish a flow of communication with everyone on the ground and every stakeholder
and supplier in the plan. This transparency will make the process smoother.
2) Make a habit of continuous planning Construction company should start planning long before

What would actual construction begins, and continue revising and developing plans until the project ends. The

be an design, pre-construction, and procurement stages of a construction project each require

extensive planning and each may need to be revised as the next stage unfolds.
adequate 3) Observe and ask questions Construction is a constantly evolving industry, with new equipment,

strategy of a practices, safety requirements, and advancements every year.

smart 4) Budget projects with a work executive platform - In construction, the permits, wages, materials,
and equipment needed for projects are often exchanged between an array of financial sources
construction and vendors.

company? 5) Embrace automated reporting systems - Automated delivery tools will save significant time over
the span of the build. This automation will ensure the right reports go to the right people on time,
allowing you to focus on other tasks and communication. Other reporting systems, such as
safety and health management, can prevent hazards, track incidents, and streamline worksite
analysis when issues do arise.
 3. A TRADITIONAL BANK RUN
A traditional bank run starts when (correct or incorrect) information about
potential problems at a bank leads to fear of a bank failure. More fear leads to a
higher tendency to withdraw personal savings. An increase of withdrawals leads
to a decrease of the perceived solvency of the bank which leads to more fear of a
bank failure. An increase of withdrawals also leads to a decrease of liquid bank
reserves and hence to a lower liquidity of the bank. Banks then need to turn more
and more illiquid assets into liquid assets (money) to have sufficient liquid assets
to pay for (future) withdrawals. Due to the speed required to liquidate illiquid
assets, huge losses are often made, resulting in a reduction of the solvency of the
bank. The lower the solvency of the bank, the lower the perceived solvency of the
bank, which leads to more fear of a bank failure. Weak or uncertain economic
conditions result in more fear and lower perceived solvency.

• Make a causal loop diagram of this description. This causal loop diagram should be
similar to the ones described in (Richardson 1991; MacDonald 2002). How many feedback
loops are there? What is their polarity?
• What are the possible systems behaviors suggested by this CLD?
• Make a causal loop diagram of this description. This causal loop diagram should be similar to the ones
described in (Richardson 1991; MacDonald 2002). How many feedback loops are there? What is their
polarity?
ANSWER :
There are three possible feedback loops, they are two balancing feedback loops and one reinforcing feedback loop.

The bank failure Liquid bank reserves

Tendency to withdraw
personal savings
R1 B2
Information about
potential problems

Liquidity of the bank

The perceived
solvency the bank B3

Economic conditions Looses

Solvency
• What are the possible systems behaviors suggested by this CLD?
The possible system behavior suggested by this CLD is goal seeking behavior, where the system needs to find a common objective or a
goal. In other words, the system must be stabilized to achieve its goal. The system needs another feedback to self- stabilized. Balancing
feedback loops cause variables to adjust discrepancies in frequent tendency to withdraw personal savings. Hence, the system
undertakes corrective action, such as reducing the bank failure to decrease tendency to withdraw personal savings, to bring the system
back to equilibrium.

The perceived
Goal
solvency the bank

Time
4. ENERGY TRANSITIONS
• Energy Transitions are dynamically complex: they are governed by many feedback effects and long delays.
Energy transitions are also deeply uncertain: major uncertainties – related to individuals, particular technologies,
the entire system, and hence for policy/decision makers in the energy field– are omnipresent. Energy
technologies face many uncertainties and need to overcome many hurdles, even before becoming commercially
viable and entering the energy technologies battlefield.
• One of these hurdles is the so-called ‘valley of death’. That is, quite often, entrepreneurs and technology
developers bring a new technology to the pre-commercial stage, but due to a lack of investments, it does not
survive the phase between (subsidized) entrepreneurial technology development and large-scale commercial
take-off in which subsidies are (often) forbidden. It is hard to predict which promising technologies will actually
make it, and hence, which might possibly become the technologies of the future.
• Many self-reinforcing uncertainties influence perceived certainty related to each new technology. The lower the
perceived certainty, the higher the perceived risk and the lower the entrepreneurial willingness to acquire
knowledge/experiment/lobby/. . . in order to bring a technology to the point where it would be considered a good
investment. Resources for actions to reduce uncertainty may actually help to take this hurdle and may lead to
more perceived certainty and raise perceptions about the potential success of the technology. This in turn
reinforces (intrinsic) entrepreneurial motivation, resulting in more willingness to act. A reduction of the perceived
risk and an increase of the entrepreneurial motivation are the preconditions to further the state of development
and increase the willingness to invest of entrepreneurs and risk-taking energy companies, which in turn leads to
more real investments, contributing to the success of the technology, reinforcing the willingness to invest, etc.
• Make a CLD of the pre-battlefield struggle. How many loops are there? What is their polarity? What would be
appropriate names?
• What policy recommendations could be derived from this CLD?
• Make a CLD of the pre-battlefield struggle. How many loops are there? What is their polarity? What would be appropriate names?

Willingness to
Resources for
invest
investments
Investments

R4 R3

Success of Entrepreneurial
investment Potential success motivation R5

Stage of
Delay R2 development
Perceived
Certainly
Success of actions Resources for
actions

Uncertainty Willingness to act

The entrepreneurial Perceived

willingness to risk
acquire knowledge
R1

From the CLD above, there are five possible feedback loops, they are five reinforcing feedback loops. The appropriate names of this CLD are entrepreneurial
motivation and actions and uncertainty.
• What policy recommendations could be derived from this CLD?

Policy recommendations that could be derived from this CLD are.

1) Entrepreneurs need to be intrinsically motivated
2) Uncertainties and risks need to be reduced
3) Sufficient resources for actions to reduce uncertainties need to be made available
4) Administrative/bureaucratic delays need to be avoided or kept to a minimum
5) Sufficient resources for initial investments need to be made available.