Lecture 3 –

SFDs and System Dynamics (SD) Simulation

IE2141 Systems Thinking and Dynamics

Dr. LI Haobin, Senior Lecturer

Department of Industrial Systems Engineering and Management (ISEM)
College of Design and Engineering
National University of Singapore

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 1
 Let's protect the environment
Lecture notes are subject to change before
the class for further improvement
(Ver. 28 January 2023)

Acknowledgement
The preparation of this module has been made possible by the support from IE2141
teaching team, and the past teaching materials developed by A/Prof. Aaron Chia.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 2
 Review on
Methodologies of Systems Thinking
1. Identifying a system
▪ Elements, boundaries, sub-systems
▪ Environment, purpose, input and output
Covered in Lecture 1

▪ Stakeholders, i.e., who are making

decisions and influencing the
system/sub-systems
▪ Perceptions, i.e., how the information
from system/sub-systems are
perceived

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 3
 Review on
Methodologies of Systems Thinking
2. Understanding a system
Understanding how the system works, its interconnections and
Covered in Lecture 2

Behaviours
▪ Classification of the system / sub-systems
▪ Level of perspectives
▪ Behaviour over time
▪ Causal loop diagrams (CLD)
Lecture 6

▪ System archetypes

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 Review on
Methodologies of Systems Thinking
3. Predicting system Behaviour
Forecast how the system will Behaviour in future
Lecture 3

▪ System dynamics simulation

(Today)

▪ Stock-flow diagrams (SFD)

Lecture 4 ▪ Modelling time delays
Lecture 5 ▪ Data collection and estimation
Lecture 8 ▪ Verification and validation

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 Review on
Methodologies of Systems Thinking
4. Devising improvements
How can we modify the system to produce desired results?
▪ Modelling of decision-making structure
▪ Identifying leverage points
Lecture 7

▪ Decision analysis methodologies

▪ Optimization of decision parameters

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 Lecture 3 –
SFDs and System Dynamics (SD) Simulation
▪ Notations of Stock-Flow Diagrams (SFDs)
▪ Mathematical Representations of SFD
▪ System Dynamics (SD) Simulation
▪ Examples on General Trends of System Behaviors

IE2141 Systems
Systems Thinking
Thinkingand Dynamics––Dr.
andDynamics ISEMLi Haobin, National
Department, University
National of Singapore
University of Singapore 7
 Why Stock-Flow Diagrams?

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 What is SFD?
▪ Stock and flow diagrams (SFDs) are ways of representing the structure of
a system with more detailed information, i.e., quantitative values and
equations, than is shown in a causal loop diagram (CLDs).
▪ Stocks are fundamental to generating behavior in a system;
▪ Flows cause stocks to change.

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 Why SFD?
▪ Although a CLD expresses how one variable is related to another, it
does not provide enough detail to calculate the value of one variable
given the values of the others.
▪ In contrast, an SFD is a calculable representation of the system.
▪ For this to be possible, each variable must be defined and assigned
the correct units, and often new variables must be added as well.

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 Why SFD?
▪ System dynamics (SD)
simulation can be built according
to SFD for understanding and
experimenting the nonlinear
behaviors of complex systems
over time using stocks, flows,
internal feedback loops, table
functions and time delays. 𝑡

Stock 𝑡 = න Inflow 𝑠 − Outflow 𝑠 𝑑𝑠 + Stock 𝑡0

𝑡0

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 SFD Notations

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 SFD Notations

▪ Overview of a Stock- Connectors

Flow Diagram. Converters

Stock
Source Sink

In-Flow Out-Flow

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 SFD Notations

▪ Sources and Sinks represent everything outside the system

Source

Sink

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 SFD Notations

▪ Stocks are quantities that can accumulate or decrease in

numbers.
▪ Flows show the movement and captures rate that quantities are
transferred.

Stock Flow

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 SFD Notations
▪ Converters hold information about the system.
▪ They store equations or constants, and affect rate of flows or
another converters (Variables/Parameters).

Converters

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 SFD Notations

▪ Connectors move information from one element to another e.g.

connects population to births.
Influence via
Connectors

Stocks Stocks

Flows Flows

Converters Converters
Connector
Stock can only be influenced by
Flows via inflows and/or outflows.

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 Between CLD and SFD
▪ CLD is usually an aggregated version of the model represented by SFD, addressing
important variables. Mapping between CLD and SFD are described as follows.

Stock
Variable Flow

Converter

Connector Same arrow direction, and polarity (+/-)

based on the explicit equation
Causal
Relationship Stock-Flow In general, Inflow has an +ve impact on the stock,
Relationship whereas the outflow has an -ve impact on the stock
𝑡

Stock 𝑡 = න Inflow 𝑠 − Outflow 𝑠 𝑑𝑠 + Stock 𝑡0

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 𝑡0 (Implicit equation) 18
 Consistency in Units
▪ In a SD simulation model represented
by the SFD, units for Stocks, Flows, and (unitless)
Converters shall be consistent, while
(Fish) (unitless)
the equations at each Converters are
taken into consideration.

(Fish/Month) (Fish/Month)

(Fish)

(Per Month) (Month)

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 System Dynamics Simulation

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 What is System Dynamics Simulation
▪ System dynamics (SD) is an approach to understanding the
nonlinear behavior of complex systems over time, using stocks,
flows, internal feedback loops, table functions and time delays.

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 What is System Dynamics Simulation
▪ A perspective and set of conceptual tools that enable us to
understand the structure and dynamics of complex systems.
▪ Rigorous modelling method to build formal computer
simulations to design more effective policies and organizations.

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 Why System Dynamics?
▪ Changes over time
▪ Complex relationships
▪ Counter intuitive behavior
▪ Compare assumptions and mental models
▪ Gain insights into consequences of decisions (policy making)

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 Principles of System Dynamics
▪ Develop a model for solving a particular system problem, not to
model all details in the whole system.
▪ Use other tools where appropriate (e.g. benchmarking, market
research)
▪ Validate your models
▪ Breadth is more important than depth.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 24
 System Dynamics Modelling Process
1. Problem Definition
a) What is the problem? Why is it important?
b) Define the purpose of the model
c) Who is the model audience?
d) What are the model boundaries and the key variables?
e) What are the behaviors over time of the key variables or
concepts? (Draw Behavior Over Time Graphs or Reference
Graphs). How far into the future should we consider? How far
back in the past lie the roots of the problem?
To be practiced in Tutorial 2 / Assignment
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 System Dynamics Modelling Process
2. Dynamic Hypothesis – Causal Loop
a) What are the current theories about the problematic behavior?
Formulate a hypothesis that explains the dynamics of the
problem as a function of internal (endogenous) consequences
of the feedback structure in the system.
b) What are the basic mechanisms (feedback loops) of the
system and develop maps of the causal structure. (causal loop)
c) What are the assumptions made?

To be practiced in Tutorial 2 / Assignment

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 System Dynamics Modelling Process
3. Stock Flow
a) Based on the causal loop, identify the stocks and flows of
the system.
b) Develop the stock flow diagram.

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 System Dynamics Modelling Process
4. Build a Model
a) Decide on the structures and decision rules to use.
b) Estimate the parameters, initial conditions, and
behavioral relationships.
c) Test to determine if the structure is consistent with the
purpose of the model and the boundary.

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 System Dynamics Modelling Process
5. Validate / Test the Model
a) Does the model reproduce the problem behavior
adequately for your purpose?
b) Does the model behave realistically when stressed by
extreme conditions?
c) How does the model behave given uncertainty in
parameters, initial conditions, model boundary, and
aggregation?
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 System Dynamics Modelling Process
6. Insights / Policy Design and Evaluation
a) In what situations (environment) is the model relevant?
b) What new decision rules, strategies, and structures might be
tried in the real world?
c) How can they be represented in the model?
d) What are the effects of the policies?
e) How robust are the policy recommendations under different
scenarios and given uncertainties?
f) Do the policies interact? Are there synergies or compensatory
responses?

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 Systems Dynamics Modelling Process
① Problem Definition Identify problem scope and boundaries, key
variables, and reference mode chart(s)

② Causal Loop Diagram Seek the cause effect relationships in

the system, focusing on feedback loops

③ Stock-flow Structure Identify the stocks and flows in the

feedback system

④ Working Model Seek data, build the software model and

formulate relationships among its elements
Ensure the model reflects the problem
situation and behaves correctly ⑤ Validate / Test

Use the model to seek useful findings ,

explore scenarios and test policy options ⑥ Insights and Answers
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 Considerations for SD Modelling
▪ Assumptions
▪ Level of Aggregation
▪ Interactions
▪ Independent – No interaction
▪ Indirect – Behavior of one entity affected by another but without any
contact
▪ Direct – Behavior of one entity affected by another directly

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 Software – Stella Architect
STELLA (short for Systems Thinking, Experimental Learning Laboratory with Animation; also marketed
as iThink) is a visual programming language for system dynamics modeling introduced by Barry
Richmond in 1985. The program, distributed by isee systems (formerly High Performance Systems)
allows users to run models created as graphical representations of a system using four fundamental
building blocks. STELLA has been used in academia as a teaching tool and has been utilized in a variety
of research and business applications.

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 Software – Stella Architect
Stella Architect is the definitive modeling tool to create professional simulations and presentations.
Seamlessly create, design, and publish models to share with anyone, any where, anytime. It allows you
to build rich flight simulators and learning environments on top of Stella models that clearly explain model
concepts and invite users to explore different assumptions and see the outcomes over time. Stella
Architect interfaces can be published to the web, to the desktop, or to mobile devices. With a sample
click, people can engage with your simulations anywhere on any device with a modern web browser.

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 Other Types of Simulation
▪ Simulation for different systems in the universe

System Dynamics
Systems governed by Simulation could apply
physics / natural laws / laws of system thinking
(objective laws)
Man-Made systems
Controlled by human decisions / procedure /
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore protocols (subjective rules) 35
 SFD for Generic Behaviours

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 SFD for Generic Behaviours
▪ Steady State Behaviour
▪ Constant Behaviours
▪ Exponential Behaviours
▪ Oscillation Behaviours
▪ S-Shaped Growth
▪ S-Shaped Growth with Overshoot
▪ Overshoot with Collapse

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 Steady State Behaviour

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 38
 Constant Behaviour (Increasing)

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 39
 Constant Behaviour (Decreasing)

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 40
 Exponential Behaviour (Growth)

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 41
 Exponential Behaviour (Decay)

▪ A Possible SFD:

Performance
Time

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 42
 Exponential Behaviour (Collapse)

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 43
 Goal Seeking (Increasing)

▪ A Possible SFD:

Performance
Time

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 44
 Goal Seeking (Decreasing)

▪ A Possible SFD:

Performance
Time

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 Performance
Oscillation Behaviours

▪ A Possible SFD: Time

Performance
Time

Performance
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore Time 46
 S-Shaped Growth

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 47
 S-Shaped Growth with Overshoot

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 48
 Overshoot and Collapse

▪ A Possible SFD:

Performance
Time
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 49
 Summary of Lecture 3 –
SFDs and System Dynamics (SD) Simulation

▪ Notations of Stock-Flow Diagrams (SFDs)

▪ Mathematical Representations of SFD
▪ System Dynamics (SD) Simulation
▪ Examples on General Trends of System Behaviors

IE2141 Systems
Systems Thinking
Thinkingand Dynamics––Dr.
andDynamics ISEMLi Haobin, National
Department, University
National of Singapore
University of Singapore 50
 Next Week – Lecture 4…
▪ Modelling Time Delays
▪ Characteristics of Time Delays
▪ Material vs. Information Delays
▪ First-Order vs. Higher-Order Delays
▪ Modelling Aging Chains
▪ Common Terminologies and Practices

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 Guest Lecture on Week 12
Dr. LU Xi 陆曦
Assistant Professor
Co-Director, Master in Public Administration and Management

Dr. Lu Xi is an Assistant Professor at the Lee Kuan Yew School of Public

Policy, National University of Singapore. He received his PhD from the
University of California – Berkeley. He holds an MS in Agricultural
Economics from the Chinese Academy of Sciences. Xi works on the
interaction between China's politics and economics, and is teaching
elective modules that examine the political logic driving China's
modern economic development. His current research looks at how
corruption affects market efficiency at the microeconomic level. More
generally, Xi's research interests lie in applied econometrics, political
economy, and economic development.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 52
 Research Opportunities in C4NGP
Jointly established by NUS and SMI in 2018, the C4NGP is a S$18 million research centre to help Singapore’s
maritime and port industries to develop innovative capabilities and enhance their global competitiveness. C4NGP
aims to be a global leading research centre in modelling, simulation, and optimisation of next generation ports and
maritime systems collaborating closely with companies in Singapore’s maritime and port sectors to improve their
technical know-how, efficiency and productivity, contributing to Singapore’s economic development and society.
C4NGP is housed in NUS, under ISEM Department, College of Design and Engineering.

Research Internship application open for all NUS undergraduates

PhD Scholarship application open for SC / SPR
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 53
 Let's protect the environment
Lecture notes are subject to change before
the class for further improvement

THANK YOU
The preparation of this module has been made possible by
the support from IE2141 teaching team, and the past
teaching materials developed by A/Prof. Aaron Chia.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 54