Chapter 1-

System Concepts
Objectives:
 Gain the knowledge about system
 acquire working knowledge regarding the art of
Systems Simulation,
 understand the role that computer simulation play in
managerial decision making under risk (enhance
problem-solving ability);
 provide techniques and skills necessary for general
systems theory (i.e. modeling) and simulation
(motivates life-long learning)
What is a system?
 A system is defined as an aggregation or
assemblage of objects joined in some regular
interaction or interdependence toward the
accomplishment of some purpose.
 The term system is derived from the Greek
word systema, which means an organized
relationship among functioning units or
components
Systems broadly can be divided
into two types:

static system

dynamic system
If a system does not change
with time, it is called a Static
System
If changes with time, it is called
a Dynamic System.
System Terminologies

 State: A variable characterizing an attribute

in the system such as level of stock in
inventory or number of jobs waiting for
processing.
 Event: An occurrence at a point in time
which may change the state of the system,
such as arrival of a customer or start of
work on a job.
System Terminologies (cont…)
 Entity: An object that passes through the system,
such as cars in an intersection or orders in a
factory. Often an event (e.g., arrival) is associated
with an entity (e.g., customer).
 Queue: A queue is not only a physical queue of
people, it can also be a task list, a buffer of
finished goods waiting for transportation or any
place where entities are waiting for something to
happen for any reason.
System Terminologies (cont…)
 Creating: Creating is causing an
arrival of a new entity to the system at
some point in time.
 Scheduling: Scheduling is the act of
assigning a new future event to an
existing entity.
System Terminologies (cont…)
 Random variable: A random variable is a
quantity that is uncertain, such as inter
arrival time between two incoming flights
or number of defective parts in a shipment.
 Distribution: A distribution is the
mathematical law which governs the
probabilistic features of a random variable.
System approach to problem
solving
The systems approach to problem solving used a systems
orientation to define problems and opportunities and develop
solutions. Studying a problem and formulating a solution
involve the following interrelated activities:
Recognize and define a problem or opportunity using systems
thinking.
Develop and evaluate alternative system solutions.
Select the system solution that best meets your requirements.
Design the selected system solution.
Implement and evaluate the success of the designed system.
1. Defining Problems and
Opportunities
A problem can be defined as a basic condition
that is causing undesirable results. An
opportunity is a basic condition that presents
the potential for desirable results. Symptoms
must be separated from problems. Symptoms
are merely signals of an underlying cause or
problem.
Example:

Symptom: Sales of a company’s products are

declining.
Problem: Sales persons are losing orders
because they cannot get current information
on product prices and availability.
Opportunity: We could increase sales
significantly if sales persons could receive
instant responses to requests for price
quotations and product availability.
2. Systems Thinking

Systems thinking is to try to find systems,

subsystems, and components of systems in
any situation your are studying. This
viewpoint ensures that important factors and
their interrelationships are considered. This is
also known as using a systems context, or
having a systemic view of a situation.
3. Developing Alternate
Solutions
Where do alternative solutions come from/ experience
is good source. The solutions that have worked, or at
least been considered in the past, should be considered
again. Another good source of solutions is the advice
of others, including the recommendations of
consultants and the suggestions of expert systems. You
should also use your intuition and ingenuity to come
up with a number of creative solutions. These could
include what you think is an ideal solution.
4. Evaluating Alternate Solutions

The goal of evaluation is to determine how

well each alternative solution meets your
business and personal requirements. These
requirements are key characteristics and
capabilities that you feed are necessary for
your personal or business success.
5. Selecting the Best Solution

Once all alternative solutions have been

evaluated, you can being the process of
selecting the best solution. Alternative
solutions can be compared to each other
because they have been evaluated using the
same criteria.
6.  Desingning and Implementing
Solution
You may have to depend on other business end users
technical staff   to help you develop design
specifications and an implementation plan. Typically,
design specifications might describe the detailed
characteristics and capabilities of the people, hardware,
software, and data resources and information system
activities needed by a new system. An implementation
plan specifies the resources, activities, and timing
needed for proper implementation.
For example, the following items might be
included in the design specifications and
implementation plan for a computer-based
support system:
Types and sources of computer hardware,
and software to be acquired
Operating procedures for the new support
system.
Training of personnel.
Conversion procedures and timetable for
final implementation.
7.  Post Implementation Review

The results of implementing a solution should

be monitored and evaluated. This is called a
postimple-implemented. The focus of this
step is to determine if the implemented
solution has indeed helped the firm and
selected subsystems meet their system
objectives
Characteristics of Systems
 Organization
 Interaction
 Interdependence
 Integration
 central objective.
 Organization
– Organization implies structure and order. It is
the arrangement of components that helps to
achieve objectives. Such an arrangement
portrays a system – subsystem relationship,
defines the authority structure, specifies the
formal flow of communication and formalizes
the chain of command.
For example, a computer system is designed
around an input device, a central processing
unit, an output device and one or more storage
units. When linked together they work as a
whole system for producing information.
 Interaction
– Interaction refers to the procedure in which
each component interacts with other
components of the system.

For example, a computer system, the central

processing unit must interact with the input
device to solve a problem. In turn, the main
memory holds programs and data that the
arithmetic unit uses for computation. The
interrelationship between these components
enables the computer to perform.
 Interdependence
- Interdependence means that parts of the
organization or computer system depend on
one another. They are coordinated and
linked together according to a plan. One
subsystem depends on the input of another
subsystem for proper functioning: that is,
the output of one subsystem is the required
input for another subsystem. This
interdependence is crucial in systems work.
 Integration

- Integration is concerned with how a system is

tied together. It is more than sharing a
physical part or location. It means that parts
of the system work together within the
system even though each part performs a
unique function.
 Central Objective

- Central objective may be real or stated.

Objective is determined by higher
management and user must be aware about
the central objective well in advance.
State of the system
The state of a system is defined as the collection of
variables necessary to describe a system at any time,
relative to the objective of study.
Entity
– An entity is an object of interest in a system.
Attribute
– An attribute denotes the property of an entity.
Activity
– Any process causing changes in a system is called as an
activity.
Event
– An event is defined as an instant occurrence that may
change the state of the system.
EXAMPLES OF SYSTEMS
AND COMPONENTS
System Entities Attributes Activities Events State
Variables

Banking Customers Checking Making Arrival; # of busy

account deposits Departure tellers; # of
balance customers
waiting
System boundaries and
environment
The external components which interact with
the system and produce necessary changes are
said to constitute the system environment. In
modeling systems, it is necessary to decide on
the boundary between the system and its
environment. This decision may depend on
the purpose of the study.
System boundaries and
environment (cont,,,)
 Endogenous System
– The term endogenous is used to describe
activities and events occurring within a system.
 Exogenous System
– The term exogenous is used to describe
activities and events in the environment that
affect the system.
System boundaries and
environment (cont,,,)
 Open system
– An open system has many interfaces with its
environment. It permits interaction across its
boundary; it receives inputs from and delivers
outputs to the outside.
 Closed System
– closed system is isolated from environmental
influences. In reality, a completely closed
system is rare.
Modeling and Simulation
What is simulation?
 Simulation can be broadly defined as a
technique for studying real-world dynamical
systems by imitating their behavior using a
mathematical model of the system implemented
on a digital computer.
Purpose: researchers, analyst, professors, so that
they can infer something.

- The behavior of a system as it evolves over time

is studied by developing a simulation model
MODEL
 Model –Simplified representation of a
system at some particular point in time or
space intended to promote understanding of
the real system

“The model represents the system itself,

whereas the simulation represents the
operation of the system overtime”
Modeling and Simulation
 Modeling and Simulation is the discipline
that comprises the development and/or use
of models and simulations.
Need of studying models

 We can use the models of communication

to analyze real problems and prevent the
occurrence of future problems
 Models help explain a phenomena by
providing information in a simplified way
which otherwise be complicated or
ambiguous.
 Working with models can enhance
systems thinking abilities
Simulation models can be generally
classified into three major types

 continuous event simulation,

 discrete event simulation,
 Monte Carlo simulation or Monte
Carlo methods
Continuous Event Simulation
 Continuous simulations are simulations that
compute models that change continuously
(usually over time). This type of simulation
is extremely common in the physical
sciences.
 It is notable as one of the first uses ever put
to computers, dating back to the Eniac in
1946.
Continuous simulation allows prediction of
rocket trajectories
hydrogen bomb dynamics
electric circuit simulation
robotics
Discrete Event Simulation
 Discrete event simulation models the
operation of a system as a (discrete)
sequence of events in time
 It models complex behavior with simple
language of “states”, “events”, “delays”,
“conditions”, and “triggers”
Monte Carlo simulation or Monte
Carlo methods
 Monte Carlo simulations are used to model the
probability of different outcomes in a process that
cannot easily be predicted due to the intervention
of random variables

 A Monte Carlo simulation can be used to tackle a

range of problems in virtually every field such as
finance, engineering, supply chain, and science. It
is also referred to as a multiple probability
simulation.
Principles and Nature of Computer
Modeling and Simulation
 Computer simulation modeling can assist in the
design, creation, and evaluation of complex systems. 
 Designers, program managers, analysts, and engineers
use computer simulation modeling to understand and
evaluate ‘what if’ case scenarios. It can model a real or
proposed system using computer software and is
useful when changes to the actual system are difficult
to implement, involve high costs, or  are impractical. 
 Some examples of computer simulation modeling
familiar to most of us include:  weather forecasting,
flight simulators used for training pilots, and car crash
modeling.
While building a model certain basic
principles are to be followed:
 Block building
 Relevance
 Accuracy
 Aggregation
 Validation
When to use simulation
 Study internals of a complex system e.g. biological system
 Optimize an existing design e.g. routing algorithms,
assembly line
 Examine effect of environmental changes e.g. weather
forecasting
 System is dangerous or destructive e.g. atom bomb, atomic
reactor, missile launching
 Verify analytic solutions (theories)
 Test new designs or policies
 Impossible to observe/influence/build the system
When to use simulation cont,,,
 Observation of the simulation gives insights
into system behavior

 Experimenting on the real world system is

more expensive than the cost of performing
simulation
 A simulator can be used for instruction, avoiding tying
up or damaging an expensive, actual system (e.g., a
flight simulation vs. use of multimillion dollar aircraft)
Limitation of Simulation

 Simulation Cannot Give Accurate Results

When the Input Data Are Inaccurate

No matter how good a model is developed, if

the model does not have accurate input
data, the practitioner cannot reasonably
expect to obtain accurate output data.
Limitation of Simulation cont,,,
 Simulation Cannot Provide Easy Answers
to Complex Problems

If the system analyzed has many components

and interactions, the best alternative
operating or resource policy is likely to
consider each element of the system.
END OF CHAPTER 1 !