System Dynamics Modeling

MDA 5303/ MISM 5303

Lesson 1:
Introduction

Dr. Lucy W. Mburu, Ph.D

 Class Details
 Meeting Platform: Zoom
 Time: 11AM
 Meeting ID: 765 145 1533
 Password: KCAU2020
 Lecturer: Dr. Lucy Mburu
 Email: mburul@kca.ac.ke

1.2
 What is SDM?
 System Dynamics modeling involves
analysis and design of dynamic feedback
systems and testing these systems using
computer simulation
 It is a perspective and set of conceptual tools that
allows one to understand the structure and dynamics of
complex systems.
 SDM is a rigorous modeling method that enables one
to build formal computer simulations of complex
systems and use them to design more effective policies
and organizations.

1.3
 What is System Dynamics?
 Sterman’s (2000) definition of System Dynamics:

“System dynamics is a method to enhance learning in

complex systems. Just as an airline uses flight
simulators to help pilots learn, system dynamics is,
partly, a method for developing management flight
simulators, often computer simulation models, to help
us learn about the dynamic complexity, understand
the sources of policy resistance, and design more
effective policies.” (p. 4)

1.4
 Why Study System Dynamics?
 The world is changing faster and faster, things are
accelerating.
 Despite all the tools and methods that we got, all the
analytic power and cleverness, things are getting
harder, and more of the policies that are being
implemented are failing to solve the pressing
challenges that organizations are currently
experiencing.

1.5
 Why do Systems Fail?
 Think about and discuss the reasons why
systems fail or become inefficient.
 Why would organizations experience the
phenomenon in the previous slide?

1.6
 Some origins of SD
 Originated from the applications of engineering
control system as well as the theory of
information feedback systems (Morecroft, 1988).
 In 1956, Forrester (1961) redesigned an originally
engineering control system approach into an
analysis methodology for investigating the
dynamics of social contexts.
 A computer-aided approach to policy
development and analysis (Richardson, 1996).

1.7
 Open-Loop Thinking
 Implementation often follows the open-loop, sequential
one way perspective of beginning and end to a project

 Complex dynamic systems do not work in this manner

 Unintended, unplanned iteration, looping back to the
beginning
 Feedback is critical
(new info changes
current decision in a
continuous iterative
set of feedback
processes)
1.8
 Systems Thinking
 Mental models are limited
 Impacts of decisions that were not thought of in
advance are manifested as “side effects”
 Side effects usually feed back in a way that is
opposite to your goals
 External players exist with their own goals (often
different from your goals) and create competition
 Impacts of decisions
from external
players also have
their “side effects”
 Complex process
not easy to manage
1.9
 Introduction
 Example of SD Problems:
 How can we control the “In-migration” ratio and the
“Out-migration” ratios in order to keep the population of
a city at a particular level for the next 10 years?
 Key Concepts of System dynamics:
 “Policy/Decision Making” analysis for complex social
systems.
 Systems Thinking
 Feedback (Causal-loop) Structure
 Stock and Flow Structure

1.10
 Introduction
 “Policy/Decision Making” Analysis:
 What options/policies/strategies can we choose to
deal with a particular social/business problem?
 What is the result of the social system of interest in
response to a particular policy and why? Is it the
result we are expecting?
 What would be the best policy we can employ in the
social system of interest?

1.11
 What is a Model?
 “A model is a purposeful abstract, simplified
mathematical representation of some real system”
 Example: simulation model, mental model
 Why do we need models?
 We build models to solve problems and answer
questions about a class of system, e.g.:
 To explain observed patterns
 Predict system response to some change
 Real systems often too complex/costly or slow for
real experimentation -> we need to formulate a
simplified representation of the system, a model

1.12
 What is a Model?
 Suppose we want to study interactions of the
climate, the energy system, and the
atmosphere in the next 100 years:
 Prediction: rather hopeless, given uncertainty
bounds
 Formalizing our understanding of a system ~ very
useful to discover gaps and decide research
investment
 Modelling as a learning tool?
 Communication? ~ useful as a framework to
communicate what we know
 But this is not what we are aiming for here ...

1.13
 What is a Model?
 To build a model, we need to formulate design
assumptions (abstractions, simplifications) and
rules (equations, algorithms)
 Non-uniqueness: there are many ways of
representing a real system in a simplified way
 Which aspects to include/ignore? Here the
model's purpose is the judge
 All aspects considered irrelevant for answering
the research question are filtered out
 But how can we know? We cannot.
 Need models to figure it out.

1.14
 Systems Thinking and
Dynamics are Tools to..
 Elicit and articulate mental models and impact
of social and organizational structure
 Expand mental models by explicitly accounting
for feedback
 Test and improve mental models and
structures via simulation
 Models do not offer the answer, they offer insight for
improving the mental models

1.15
 Systems Thinking: Foundations
 Structure generates behavior
 Dynamics emerge from the interaction of:
 Physics

 Information availability
 Decision rules
 Mental models matter (a lot)
 It is not enough to change the physical structure,
information and incentives
 The Fundamental Attribution Error
 Our first instinct is to blame the people in the system.
Almost always a low-leverage response (doesn’t help)

1.16
 To Do..

 Install Vensim
 Start exploring how it works
 Documentation and examples exist on the Web

1.17