Introduction To Engineering Systems, ESD.00 System Dynamics: Dr. Afreen Siddiqi

Introduction to Engineering
Systems, ESD.00
System Dynamics
Lecture 3
Dr. Afreen Siddiqi

From Last Time: Systems Thinking
• “we can’t do just one thing” – things are

Decisions
interconnected and our actions have
numerous effects that we often do not
anticipate or realize.
Goals
• Many times our policies and efforts aimed

towards some objective fail to produce the
desired outcomes, rather we often make Environment
matters worse Image by MIT OpenCourseWare.
Ref: Figure 1-4, J. Sterman, Business Dynamics: Systems

Thinking and Modeling for a complex world, McGraw Hill, 2000
• Systems Thinking involves holistic
consideration of our actions
Dynamic Complexity
• Dynamic (changing over time)

• Gov
Governed
erned by feedback
feedback (actions feedback
feedback on themselv
themselves)
es)
• Nonlinear (effect is rarely proportional to cause, and what happens locally often doesn’t
apply in distant regions)
• History‐dependent (taking one road often precludes taking others and determines your
destination, you can’t unscramble an egg)
• Adaptive (the capabilities and decision rules of agents in complex systems change over
time)
• Counterintuitive (cause and effect are distant in time and space)
• Policy resistant (many seemingly obvious solutions to problems fail or actually worsen the
situation)
• Characterized
Ch i d by
b trade‐offs
d ff (the
( h long
l run is
i often
f different
diff from
f the
h sh
hort‐run response,
due to time delays. High leverage policies often cause worse‐before‐better behavior while
low leverage policies often generate transitory improvement before the problem grows
worse.
Modes of Behavior
Exponential Growth
Goal Seeking S-shaped Growth
Time Time Time
Oscillation Growth with Overshoot Overshoot and Collapse
Time Time Time
Image by MIT OpenCourseWare.

Exponential Growth
• Arises from positive (self‐reinforcing)

feedback.
• In pure exponential growth the state of
the system doubles in a fixed period of State of the
system
time.
e
• Same amount of time to grow from
1 to 2, and from 1 billion to 2

Time
billion!
+
• Self‐reinforcing feedback can be a State of
Net the
R
declining loop as well (e.g. stock prices) increase
rate
system
+
• Common example: compound interestinterest,
population growth
Exponential Growth: Examples
CPU Transistor Counts 1971-2008 & Moore’s Law
2,000,000,000 Dual-Core Itanium 2

Quad-Core Itanium Tukwila
GT200
1,000,000,000 POWER6
G80 RV770
Itanium 2 with 9 MB cache
K10
Core 2 Quad
Core 2 Duo
Itanium 2 Cell
100,000,000 K8
Barton Atom
Transistor count
P4
Curve shows ‘Moore’s Law’; K7

K6-III
Transistor count doubling
10,000,000 every two years
K6 PIII
PII
K5
Pentium
486
1000,000
386
286
100,000
8088
10,000
8060
2,300 4004 8008
1971 1980 1990 2000 2008
Date of Introduction
Ref: wikipedia
Some Positive Feedbacks
underlying Moore
Moore’ss Law
+ Computer performance
+ +
Design tool
capability
R2 Chip performance
R5 relative to competitors
Differentiation
Design bootstrap advantage
+
Applications
for chips
+ Transistors per chips

R4 + R3
Design and
fabrication
+ Price premium
experience Learning +
by doing +
R1 Demand for
Intel chips Price premium
+ Design and fabrication for performance
New uses,
capability New needs
+
+
+
Revenue
R&D budget, Investment +
in manufactutring
capability
+ Image by MIT OpenCourseWare.
Ref: Exhibit 4
4-7
7, J.
J Sterman
Sterman, Instructor’s
Instructor s Manual
Manual,
Business Dynamics: Systems Thinking and Modeling for a 7
complex world, McGraw Hill, 2000
Goal Seeking
• Negative loops seek balance, and Goal

equilibrium, and try to bring the system
system
to a desired state (goal).
State of
the system
• Positive loops reinforce change, while
negative
ega e loops
oops counteract
cou e ac cchange
a ge
o
or
disturbances.
Time
• Negative loops have a process to State of

comp pare desired state to current state +
the system Goal (desired state
of system)
and take corrective action. -
B Discrepancy
• Pure exponential decay is characterized +
byy its half life – the time it takes for half

Corrective +
the remaining gap to be eliminated. action

Thinking and Modeling for a complex world
world, McGraw Hill,
Hill 2000
Oscillation
• This is the third fundamental mode of State of

the system
behavior.
beha vior.
Goal
• It is caused by goal‐seeking behavior,

but results from constant ‘over‐shoots’
over‐shoots
and ‘under‐shoots’ Time
Measurement, reporting
and perception delays
• The over
over‐shoots
shoots and under‐shoots
under shoots result State of
the system Goal (desired state
+
due to time delays‐ the corrective action of system)
De
lay
-
continues to execute even when system
Delay
Action delays B Discrepancy +
reaches desired state giving rise to the
Del
ay
+
oscillations. Corrective
action
Administrative and decision
making delays

Interpreting Behavior
• Connection between structure and behavior helps in generating hypotheses
• If exponential growth is observed ‐> some reinforcing feedback loop is dominant

over the time horizon of behavior
• If oscillations are observed, think of time delays and goal‐seeking behavior.
• Past data shows historical behavior,

behavior, the
the
future maybe different. Dormant
underlying structures may emerge in the future and change the ‘mode’
• It is useful to think what future

• future ‘modes
modes’ can be,
be how to plan and manage them
• Exponential growth gets limited by negative loops kicking in/becoming dominant

l t on
later
10
Limits of Causal Loop Diagrams
• Causal loop diagrams (CLDs) help

– in capturing mental models, and
– showing interdependencies and
– feedback processes.
• CLDs cannot
– capture accumulations (stocks) and flows
– help in determining detailed dynamics
Stocks, Flows and Feedback are central

concepts in System Dynamics
Stockss
Stock
• Stocks are accumulations, aggregations,

Inflow Outflow
summations over time Stock

• Stocks characterize/describe the state of the
system
• Stocks change with inflows and outflows

Stock
• Stocks provide memory and give inertia by

accumulating past inflows; they are the sources Flow
of delays.
Valve
(flow regulator)
• Stocks, by accumulating flows, decouple the
inflows and outflows of a system and cause
Source or Sink
variations such as oscillations over time. Image by MIT OpenCourseWare.
Mathematics
Ma
thematics of Stocks
Stocks
• Stock and flow diagramming were based
on a hydraulic metaphor Inflow Outflow
Stock
• Stocks integrate their flows:

Inflow
Stock
• The net flow is rate of change of stock:

Outflow

Stocks and Flows Examples
Field Stocks Flows
Mathematics, Physics and Engineering Integrals, States, State Derivatives, Rates of

variables, Stocks change, Flows
Chemistry Reactants and reaction products Reaction Rates
Manufacturing Buffers, Inventories Throughput
Economics Levels Rates
Accounting Stocks, Balance sheet items Flows, Cash flow or Income

statement items
Ref: Table 6-1, J. Sterman, Business Dynamics: Systems

Snapshot Test: Thinking and Modeling for a complex world, McGraw Hill, 2000
Freeze the system in time – things that are measurable in

the snapshot are stocks.
stocks
Example
20
(units/second)
Net flow
10

world, McGraw Hill,
Hill 2000
15
Example
100
Flows (units/time)
50
0
0 5 10 15 20
In flow Out flow

world, McGraw Hill,
Hill 2000
16
Flow Rates
• Model systems as networks of stocks Net rate of change

Stock
and flows linked by information
information
feedbacks from the stocks to the
rates.
• Rates can be influenced by stocks,

other constants (variables that change
very slowly) and exogenous variables Net rate of change
Stock
(variables outside the scope of the
model).
• Stocks only change via inflows and Constant
outflows. Exogenous variable

17
Auxiliary Variables
Net birth rate
Population
+
?
?
Ref: Figure 8-?, J. Sterman, Business Dynamics: Systems
Food Thinking and Modeling for a complex world, McGraw Hill, 2000
• Auxiliary variables are

neither stocks nor flows,
but intermediate
conceppts for clarityy
• Add enough structure to
make polarities clear
18
Aggregation
Aggregation and Boundaries ‐ I
• Identifyy main stocks in the syystem
and then flows that alter them.
• Choose a level of aggregation and

b
boundaries
d i forf the
th system
t
• Aggregation is number of internal
stocks chosen
• Boundaries show how far
upstream and downstream (of the
flow)) the
fl h system is modeled
d l d
19
Aggregation
Aggregation and Boundaries ‐ II
II
• One can ‘challenge the clouds’, i.e.

make previous sources or sinks explicit.
explicit
• We can disaggregate our stocks further
to capture additional dynamics.
• Stocks with short ‘residence time’
relative to the modeled time horizon
can be lumped together
• Level of aggregation depends on
purpose of model
• It is better to start simple and then add
details.
20
From Structure to Behavior
• The underlying structure of the

system defines the time‐based +
State of
behavior. Net
R the
increase system
rate
+
• Consider the simplest case: the
state of the system is affected by its
rate of change.
Net rate of change
Stock
Ref: Figure 8-1, & 8-2 J. Sterman, Business Dynamics:
Systems Thinking and Modeling for a complex world
world, McGraw
Hill, 2000
Images by MIT OpenCourseWare.

Population Growth
• Consider the population Model: Population
Net birth rate

+
+
R
• The mathematical representation of this
Fractional net
structure is: birth rate
Net birth rate = fractional birth rate * population

world, McGraw Hill,
Hill 2000
2000
Note: units of ‘b’, fractional

growth rate are 1/time
Phase‐Plots
Phase Plots for Exponential Growth
• Phase plot is a graph of system state dS/dt = Net Inflow Rate = gS

vs. rate of change of state
Net inflow rate (units/time)

• Phase plot of a first‐order, linear
positive feedback system is a straight
straight
line
g
• If the state of the system is zero,
zero the 1
rate of change is also zero

0
0 State of the system (units)
• The origin however is an unstable
Unstable equilibrium
equilibrium.
Thinkingg and Modelingg for a comp
plex world,, McGraw Hill,,2000
23
Time Plots
Plots
• Fractional growth rate g = 10
0.7%/time unit 8
Net inflow (units/time)

t = 1000
t = 900
• Initial state state = 1. 4
t = 800
2
t = 700
• State doubles every 100 time units 0

0 128 256 512 1024
State of system (units)
Behavior
• Every time state of the system

1024 10.24
State of the system

doubles, so too does the absolute
State of the system (units)

(left scale)
Net inflow (units/time)

rate of increase
512 5.12
256 2.56
128 Net inflow 1.28

(right scale)
0 0
0 200 400 600 800 1000
Thinkingg and Modelingg for a comp
plex world,, McGraw Hill,, 2000 Time
Images by MIT OpenCourseWare.
24
Rule of 70
• Exponential growth is one of the most powerful processes.

• The rate of increase grows as the state of the system grows.
• It has the remarkable property that the state of the system doubles in fixed
period of time.
• If the doubling time is say 100 time units, it will take 100 units to go from 2
to 4, and another 100 units to go from 1000 to 2000 and so on.
• To find doubling time:
Negative Feedback and
Exponential Decay
Decay
Net outflow rate
• First‐order linear neggative feedback
S state of the
systems generate exponential decay system
+
+
B
• The net outflow is proportional to the
the
size of the stock
Fractional decay
rate d

• The solution is given by: S(t) = So e‐dt
dt
Net Inflow = -Net Outflow = -d*S

• Examples:
d: fractional decay rate [1/time]
Ref: Figure 8-6, J. Sterman, Business Dynamics: Systems Reciprocal of d is average lifetime
Thinking and Modeling for a complex world, McGraw Hill, 2000units in stock.
Phase Plot for Exponential
Phase Exponential Decay
Decay
Net Inflow Rate = - Net Outflow Rate = -dS

• In th
he ph
hase‐pllot, th
he net rate off
change is a straight line with negative

slope
0
• The origin is a stable equilibrium, a
minor perturbation in state S increases
the decay rate
th t to bbring
i
systtem backk to
t 1
Stable equilibrium
zero – deviations from the equilibrium
-d
are self‐correcting
• The goal in exponential decay is implicit Image by MIT OpenCourseWare.

and equal to zero Ref: Figure 8-7, J. Sterman, Business Dynamics: Systems
world, McGraw Hill,
Hill 2000
Negative Feedback with Explicit Goals
• In general, negative loops have General Structure
non‐zero goalls dS/dt

S state of the
system
Net inflow rate
• Examples: S* desired state
- of the system
+
• The corrective action determining B
net flow to the state of the AT adjustment time - +

system is : Net Inflow = f (S, S*) Discrepancy (S* - S)
• Simpplest formulation is:

AT: adjustment time is also known
Net Inflow =
as time constant for the loop
Discrepancy/adjustment time =
(S*‐S)/AT Ref: Figure 8-9, J. Sterman, Business Dynamics: Systems
Phase Plot for Negative Feedback
with Non‐Zero
Non Zero Goal
• In the phase‐plot, the net rate of change is
a straight line with slope ‐1/AT
Net Inflow Rate = -Net Outflow Rate = (S* - S)/AT
• The behavior of the negative loop with an

explicit goal is also exponential decay, in

which the state reaches equilibrium when 1
-1/AT
S=S* S*
0
• If the initial state is less than the desired Stable equilibrium
state, the net inflow is positive and the

state increases (at a diminishing rate) until
S=S*. If the initial state is greater than S*, Image by MIT OpenCourseWare.
the net inflow is negative and the state
falls until it reaches S* Ref: Figure 8-10, J. Sterman, Business Dynamics: Systems
world, McGraw Hill,
Hill 2000
Half Lives
Half‐Lives
• Exponential decay cuts quantity remaining in half in fixed period of time

• The ‘half‐life’ is calculated in similar way as doubling time.
• The system state as a function of time is given by:
State of Initial Gap
S − (S − S0 ) e
system
S (t )
) =Desired * * −t /τ
State
Gap Remaining
• Th
he exponentiiall term decays from 1 to zero
as t tends to infinity.
• Half life is given by value of time th :
Time Constants and Settlingg Time
Time Fraction of Initial Gap Fraction of Initial

• For a first order, linear system with Remaining Gap Corrected
negative feedback,
feedback the system 0 e‐00 = 1 1 1= 0
1‐1
reaches 63% of its steady‐state value τ e‐1 = 0.37 1‐e‐1 = 0.63
in one time constant, and reaches
2τ e‐2 = 0.14 1‐e‐2 = 0.87
98% of its steady state value in 4
time constants. 3τ e‐3 = 0.05 1‐e‐3 = 0.95
4τ e‐4 = 0.02 1‐e‐4 = 0.98

• The steady‐state
• steady‐state is not reached
5τ e‐5 = 0.007 1‐e‐5 = 0.993
technically in finite time because the
rate of adjustment keeps falling as 1.0
the desired state is approached. Fraction of initial gap remaining
1 - exp(-1/AT)
0.8
1 - exp(-2/AT)
0.6
1 - exp(-3/AT)
0.4
0.2 exp(-1/AT)
exp(-2/AT)
exp(-3/AT)
0
0 1AT 2AT 3AT
Time (multiples of AT)

MIT OpenCourseWare
http://ocw.mit.edu
ESD.00 Introduction to Engineering Systems

Spring 2011
For information about citing these materials or our Terms of Use, visit: http://ocw.mit.edu/terms.

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Introduction to Engineering

Dr. Afreen Siddiqi

• “we can’t do just one thing” – things are

• Many times our policies and efforts aimed

Ref: Figure 1-4, J. Sterman, Business Dynamics: Systems

• Dynamic (changing over time)

Time Time Time

Oscillation Growth with Overshoot Overshoot and Collapse

Time Time Time

Image by MIT OpenCourseWare.

Ref: Figure 4-1, J. Sterman, Business Dynamics: Systems

• Arises from positive (self‐reinforcing)

1 to 2, and from 1 billion to 2

CPU Transistor Counts 1971-2008 & Moore’s Law

2,000,000,000 Dual-Core Itanium 2

Curve shows ‘Moore’s Law’; K7

1971 1980 1990 2000 2008

+ Transistors per chips

• Negative loops seek balance, and Goal

• Negative loops have a process to State of

byy its half life – the time it takes for half

Ref: Figure 4-4, J. Sterman, Business Dynamics: Systems

• This is the third fundamental mode of State of

• It is caused by goal‐seeking behavior,

reaches desired state giving rise to the

Image by MIT OpenCourseWare.

Ref: Figure 4-6, J. Sterman, Business Dynamics: Systems

• If exponential growth is observed ‐> some reinforcing feedback loop is dominant

• If oscillations are observed, think of time delays and goal‐seeking behavior.

• Past data shows historical behavior,

• It is useful to think what future

• Exponential growth gets limited by negative loops kicking in/becoming dominant

• Causal loop diagrams (CLDs) help

Stocks, Flows and Feedback are central

• Stocks are accumulations, aggregations,

Image by MIT OpenCourseWare.

• Stocks change with inflows and outflows

• Stocks provide memory and give inertia by

Image by MIT OpenCourseWare.

• Stocks integrate their flows:

• The net flow is rate of change of stock:

Image by MIT OpenCourseWare.

Ref: Figure 6-2, J. Sterman, Business Dynamics: Systems

Field Stocks Flows

Mathematics, Physics and Engineering Integrals, States, State Derivatives, Rates of

Chemistry Reactants and reaction products Reaction Rates

Manufacturing Buffers, Inventories Throughput

Economics Levels Rates

Accounting Stocks, Balance sheet items Flows, Cash flow or Income

Image by MIT OpenCourseWare.

Ref: Table 6-1, J. Sterman, Business Dynamics: Systems

Freeze the system in time – things that are measurable in

Image by MIT OpenCourseWare.

Ref: Figure 7-2, J. Sterman, Business Dynamics: Systems

Thinking and Modeling for a complex world

In flow Out flow

Image by MIT OpenCourseWare.

Ref: Figure 7-4, J. Sterman, Business Dynamics: Systems

Thinking and Modeling for a complex world

• Model systems as networks of stocks Net rate of change

• Rates can be influenced by stocks,

outflows. Exogenous variable