Lecture 5 –

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
 5.1 Overview on
System Dynamics (SD) Models

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 Bi , UD, SFD - all systemmodels
diff
What are Models? simplify system
t .
degrees
& affles of perspettes

▪ Graphical, mathematical (symbolic), physical, or verbal

representation or simplified version of a concept, phenomenon,
relationship, structure, system, or an aspect of the real world.
I

Xseckpertation unzampblad
representation
V ..
usefulness ofcomplex Melties
ranneteptual

d
all detart

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore Redreting explaining Lunderstanding
,
denonene
3
 General Purpose of Models
▪ To facilitate understanding by identifying the important
elements and eliminating unnecessary components sin .
dist.
Scenarios, observe
/
▪ To aid in decision making by modelling 'what if' scenarios, possibleoutcomes

▪ To explain, control, and predict events on the basis of past

S
observations. strategies Henderhop

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 stronger unversants I eliabling
A
of model shald be
What Makes a Good Model? expression
objecte Standardised & ,
understander

simplicity motarbitrary but highlights key factors & enhances Centred by afterexpect

↑
usabebts

▪ Scientific – The model is constructed using a language,

diagram or some other communication medium that is
independent of the modeler; system
describes it

▪ Concise – The model is simpler than the full target system and -

there is some purpose or question that guides the decisions -

about what to include and exclude in the representation; and

▪ Complete – The model comprises of all the things we need to
understand regarding the issue of interest.

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 What is System Dynamics Simulation
& sin .

▪ System dynamics (SD) is an approach to understanding1the

nonlinear behavior of complex systems over time, using stocks,
X flows, internal feedback loops, table functions and time delays.
output not alw propo
1 input
Latte

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 6
 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.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 7
 Why System Dynamics?
our fine
>
& in
, predet behanders
▪ Changes over time & simulate Here
-describe analyse
▪ Complex relationships
,
re outcomes
beneferd strat -> Unexpected
-

seemingly
.

▪ Counter intuitive behavior M

▪ Compare assumptions and mental models

▪ Gain insights into consequences of decisions (policy making)
↳ Stratformulation

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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) match real
-sontput date
▪ Validate your models world
▪ Breadth is more important than depth.

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 5.2 Process of
System Dynamics (SD) Modelling
stenktigeeten prob Hen
.

Letter
do old names of
I

issue

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 System Dynamics Modelling Process
1. Problem Definition
a) What is the problem? Why is it important? bekannten

b) What is the purpose of the model? Bed futur trads testdeft stratexplain part ->

Prefer were
makes
Senior desion
c) Who is the model audience? researchers ->

understate
d) What are the model boundaries and the key variables? ignore offer
e) What are the behaviors over time of the key variables or
concepts? (Draw Behavior Over Time 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?
darbekannin
Formulate a hypothesis that explains the dynamics of the warn)
Roblem generated
as aresult of problem as a function of internal (endogenous) consequences
feedback structure
of the feedback structure in the system. vichos
(CLD)
exist
b) What are the basic mechanisms (feedback loops) of the q
system and develop maps of the causal structure. (causal loop)
c) What are the assumptions made? centred around causallops
can draw Complete CD
around system
To be practiced in Tutorial 2 / Assignment
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 System Dynamics Modelling Process
3. Stock Flow
Stat
relationsbet est armulation changesin stee

a) Based on the causal loop, identify the stocks and flows of

↓
the system.
b) Develop the stock flow diagram.
wicationship variables carry the key dyname mechanism

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 System Dynamics Modelling Process
defending spostmates ,
estimate perameter
new to calc How ,
4. Implement a Model testtitil model
of control
signals
↑ d
a) Decide on the feedback-control structures and decision besedon
rules to use. Eretstate
& inputs
b) Estimate the parameters, initial conditions, and
behavioral relationships. eas of model aerately reflect e world can

c) Test to determine if the structure is consistent with the

purpose of the model and the boundary.

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 Rochells produce
valuable
ersights
System Dynamics Modelling Process model can accurately
produce these
behanders

Alway Debrability in reflecting -

rat-world behanen comparemaldoutputs y

5. Validate / Test the Model historical data/datafrom
reliabl sources

a) Does the model reproduce the problem behavior &

adequately for your purpose? · canacerately sepracuer pobtobeschredfactual
bcharers of challenge
b) Does the model behave realistically when stressed by
extreme conditions? crea reschiener reliabling E understand
limitations realness &
c) How does the model behave given uncertainty in ofmodel
parameters, initial conditions, model boundary, and
aggregation? zich assumption greatest amput model ↳
an

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 System Dynamics Modelling Process
mode adic tr dursion mally
~ water resource managementfod
6. Insights / Policy Design and Evaluation mayonly be applicableto certain
↑ climate changes/locations
a) In what situations (environment) is the model relevant?
b) What new decision rules, strategies, and structures might be
tried in the real world?
-nightmare modifying Lestern
c) How can they be represented in the model? pents ofmodel/add new structures
d) What are the effects of the policies? Rotberekto/rks/
refretdese stats .

->

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 BOTGs

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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 5.3 SD Model Implementation

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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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 stock using fotal How
Integration Methods Glculating
-

System dig name , models on continuous time representation,

bayed
-

reffected integral
lightstrationsh
t

Iden result
out

▪ System dynamics models are formulated in continuous time integraleg

Emp programs need americal methods to approx
and solved by numerical integration.
dange
▪ Delta Time (DT) yield an approximation of the underlying
Inzatougedinte

L
continuous dynamics. model approxilal conta
dynamics
A

▪ DT is not a feature of reality

– decision rules and models

I
should not depend on it.
Dift/sine ste bet consentie fine points executing Hemodel
rant lo know systenbeltuonraer nextlodags DT21 day , model sim
eg .
, .

unthinthe
&update state of each day codays
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
It results/behanders highly depend on DT mightimply deficiencies21issues
,
 Integration Methods able
se Hen
entert - multite stope
echmates within
estimates feobtain
integrates Hestnextport
value

▪ Runge-Kutta (RK) Methods of

https://en.wikipedia.org/wiki/Runge%E2%80%93Kutta_methods

simplest -> predict tptbased ancurrent

▪ Euler Method -Most basic dope e each time point

be
rot
https://en.wikipedia.org/wiki/Euler_method simple to call. , might
accurate ven time step is large
users default in IE 141
▪ Heun's method *
Lintegral approx
↓ https://en.wikipedia.org/wiki/Heun%27s_method

order RK/RK1 ,
bet Enter&RICH Fracuracy
.

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 Integration Methods
▪ Example: Workforce Goal-Seeking (Varying DT from 3 to 0.2)

DT = 3 days

&
Sin .
duration
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 Integration Methods
▪ Example: Workforce Goal-Seeking (Varying DT from 3 to 0.2)

DT = 0.2 days

Dismallet- perfectapprox
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 smallers T-> highersim .

accuracy ,
but complexity & comp fire
. Modelside purposel
Entirel decision
Belie Concept
.

support validation

Integration Methods
Modelchlel
smatte need
accuracy
2
slightlylarger T

beafonteobsenednvalue
end be consistent
Dahld on t undervarious e

▪ The results of your models should not be

sensitive to the choice of time step or integration
method.
What delta time to use?
Start with a particular DT
Yes

Reduce DT by half Is result sensitive No

Accept DT / Alternate
and compare results to the change between different
modelchange smoothly ,
larger night besufficient integration methods
If hi rapralseres fluctuations/
abnormal divergence , May be
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore takesmaller by 25
 5.4 Data for SD Simulation

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 Purpose of Data
1) Identification of Behaviour Over Time
bed larg ter Hand &
▪ Simplify time series data to identify BOTG ->
Shattern implicatiut
2) Model Formulation
▪ Build relationships between variables
▪ Set equations for the causal relationships
3) Input Parameters model building
for
geback adjustments
▪ Set values for the independent variables in the model ↑
else
4) Validation A

▪ Check if the output of the model is valid by comparison model effective

~actual data ->output match closely
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 Purpose of Data
1) Identification of Behaviour Over Time
2) Model Formulation
3) Input Parameters
4) Validation

Input Real-life Output

System
(3) (4)
(2)
Performance
Parameters Model Measure (1)
Formulation /
Equations
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 Describe impactof internal external factor & allationships on system behande
of tull-re feedback
Endogenous vs. Exogenous
e .
g loop
-

orendrate
↑
caused
Patashldbrabt to support& caused by interactions &feedbackE factors &relationships bekannor
modell system
explaintest endfacter
ratter the external
ofsystem untein
loops bet internal variables
us interes
▪ Ensure that relationships in the system (endogenous) cause apartof system's
Exogenty
resport affect
↳factor
the behavior of the system, not external forces (exogenous). afterparts futter ,

fromontill system enhancing weakening original

isporte
↓

more Input Real-life Output

by System
antemal
causallationshipsautodettoc (3) (4)
(2)
↳ Some suchfacters
control Performance
beyond our
cause Parameters Model (1)
↳ overdraneronexofasters
us overlook
during main
forces
Formulation /
Measure

system
of
Crektionships Equations
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 * Research BOT ofsomesystem , finding iput date collected Garderexpand

Data Source
show same sinner behapattern , canspeculate
be exogenous or linkersystem
suchsystems usually nottarget
of study
behandersnight
3 SenSandersch
generating input
beharis within
A

-get and
e

Rondes valuable beschie into [ bendergofanalpis

ensuring made as cost to actualpation , -

naursyste
▪ Actual Observations, E.g., Time-Motion Studies end

pret observed ord e g wekeffciency . .

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 Data Source Ronde insights fanternal Structure/relationships by star
denta pott Model Patels behenious /apinions/preferences
tergenumber of
▪ Survey – Questionnaire Design, Survey Data Analysis

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 Help define model boundaries
identifykey var, understand
Data Source
-
infight , possible causal relationships

valuable - key factors f

Wentand dat lacking ,
expert spinion Retentialfeedbac
canbegered
▪ Expert Opinions – E.g., Interviews

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 madelbulding
on solid acod
based
ensure
found arreirenting steel
Data Source
.

&
Bevous resect
models &knowa
existing
▪ Library / Literature causal relationships https://scholar.google.com/

https://nus.edu.sg/nuslibraries

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 33
 Data Source Large datapoints help Do
better
understand endition
V &
trends of systems
▪ Database / Public Domain Statistics

https://data.gov.sg/
https://www.singstat.gov.sg/

https://www.forbes.com/sites/bernardmarr/2016/02/12/big-data-35-
brilliant-and-free-data-sources-for-2016/?sh=784e3809b54d
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 Notbut data
Datast
Data Estimation – Graphical -

Trendlines -> Interpolation

▪ Plot of number of people based on age
▪ How do you estimate the number of babies below 2 years old?

Equation:

Lumped Method
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 Data Estimation – Division
↳ergeantotderta lac speekedetals , eg-fatality ,
enter rate , us

dintion estmate and of abset

▪ Find the volume of a dollar bill
▪ How to find Height which is very thin?
▪ Estimate it by measuring a stack of papers and dividing it by the
number of papers.

Volume = Length x Width x Height

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 Dataframallunty ava ,

butreed date for nation

Data Estimation – Scale Up canscale
up base
on
Small but larger rangel population nect to be estimated
knonratig hatter indicators
range/sample
I
I
,

▪ How many bed pillows can fit in the back of a tractor trailer?

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 Particularly applicable in sits
requiring adnation of medel
Data Estimation – Aggregation Completty/improvementof amputational
efficiency
Multiple Sier or speete date pat , can zombie into areamer general
I date pots

▪ Estimate the peak capacity of a MRT Train at peak hour.

▪ Assuming there are 20 train carriages with each carrying 150
passengers at peak hour and 1 train every 10 mins

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 38
 be estimated
Sensofdatapakts , but values beyond these points and
to

of existing deter
on pend
usually based assumescurrent and
-
Data Estimation – Extrapolation
will conten d future

(might not always be tre case

▪ How much fuel is burnt by Texas A&M students for all the
Thanksgiving visits?

Fuel Used
Number of Students

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 of data fr new market, but
eg lack
.

dutafrmature market avail .

Data Estimation – Analogies

simetercharacteristis
Can assume de nu
patent

of data fr hu data of another simar system

rad splete systems , but
,

▪ Estimate the volume of an average-sized man.

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 turngeometreshapes
↑ relationships

Data Estimation – Geometry

estimated
Iknow area shape of region, boundaries length cam be
often related t graphical/spatial data

▪ Estimate the surface area of an average sized man

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 Passively presented data
generally canorty
express the concation bet system variables , W
Correlation vs. Causation
.

dece cantal relation shops

0
▪ Ways to conclude Causations

3
▪ Domain Knowledge
▪ Expert opinions
▪ Design of Experiment (DOE)

as
▪ In its simplest form, an experiment aims at predicting the outcome by introducing a change
of the preconditions.
▪ Note that, conducting DOE is NOT required for IE2141
▪ Role of Data
▪ Make hypothesis
▪ Reject hypothesis
▪ Derive causal equation provided the hypothesis is not rejected
*▪ Causation cannot be concluded ONLY from the data - Gnofferdnes
be
but t causality
determined
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
solely used to 42
 measure of relationsp
strengt
↑ betzanables

How Strong is the Correlation / Causation?

Data reflected correlations to
propose/venty hypothesis & causal relationships -> focus strength offerelation
on

reflected in data

▪ What is the confidence level for the causation between two variables?
It causal relations hip can be established ,
▪ Is there a missing factor? -> Fr water
I conslations
correlation bet. data of cams al variables can
▪ If yes, it shall be considered in the analysis.
▪ Are there random factors (noise)?
- effect strength of causal relation ship
systemdy namemodels -> Guerredhe
relationships
variables having

significant import on
might
string causal
ana

&perf.
system behaviour
▪ Consider causations with strong connection between variables

Strong Week condationtsmlft tright

𝑌 = 𝑋3
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 43
 candyspeotand Noting/resantes to agree domen Knowledge/epetit zod
t

Assumption I
I
data cannot form strong ent ventation expol
↳ detylist &define
understate
game
what
↳ &
bgrally resonable Se Unitt
▪ An assumption is something that you assume to be the case, even
without proof or sufficient evidence.
▪ Make assumptions if a specific aspect is on focus, or with lack of data
▪ State the assumptions clearly, and understand
▪ How likely is the assumption true?
▪ How useful is the conclusion with the assumption?
▪ Up to which extent is the conclusion applicable?
▪ Example
▪ Price change has no impact on the demand with an addictive behavior
↳ Pretort demand run be spifrantly affected Butno significant importion
,
consumer
valid freenter price systemic prob
we are
studying
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
Assumption mightonly be -range lattergoods 44
 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.

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