4/L6/2Ot4

What is System Dynamics?

Modeling Process

...a methodology for studying and

managing dynamic problems in
complex feedback systems.

System Dynamics Modeling Process

1. Detine the Problem Dynami(ally
th. tih..di6 gaphs

ro

no.. rh.

9.oU

di. b$oiid ow

t6.

2. Develop a oynamic Hypothesis

u.

6.
<

diagtundko t@ls to.hnlb. th.

ptubhnotk b.hovid.

tyttfr

thdt E .t@tinq

b.

Formulate & Simulate

u* tunvdt to tuNbE th. didsni nb o.onput thad.hhokd.
n utod rh. pnbhmtk b.hdw ot th. @t wtd tytuh.

SD Modeling: an Iterative Process

D.lin. rh. Pobl.m DvnamhalV

t
t

Dev.lop ovn.nic Hypolheik

Formulate &

simulat rh. Mod.l

14. Test

--.
t'cl

the Model

condu.t dloonEtn on t wli.dtion

5. Design & Test Policies

condqtdEtih@Ewith
oprioB lor dctueinrth.

olth.6od.l.

b.lifr@tan lNtudE poli.v

th.
^o.hl
@l*o.ld probhn.

(,._.1"*.
(,,.""[,,,",".,

Define a Problem Dynamically

lllustrating the
Modeling Process

Get iome data.nd daw a time serisgraph ofthe problem.tic

behavior That is, dlaw the E eEfte behovio. pottn loften

.atted$. rclercn@ nod.l.

lnterpret the Sraph in

D.tin. rh. P6brn

od.lop

romd.E

t!En.
&

or".n,allv
HvDdhBh

sinuh. ih. Mod.l

T6r rh. Mod.l

Desian

P.li4!

mrd'

That is, d.scibe th rerrPr..

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Develop a "Dynamic" Hypothesis

lllustrating the
Modeling Process
/

D.nn.th. pEbkD

oyn:mkrlly P *,

Dyi.mi.Hworh6it ll
"r.,-.
Famul.E & timul.i. rh. Mod.l
D.Er.,

T.nrh. M.d.l
D.cln roli.r6

Drawand labelthe key stock(slrelated to the rrernce mode.

Draw and labeltheflows ofthe key stockGl.

Describe how the flow(sl could cause chantes in the stock(s).

Hypothesiu e what causes the flows to chant,

Hypothesize howthe stock & flow structure could produce the

Translate the stock-and-flow structure into a causal loop

diagram to explain the dynamic hypothesis.

Dynamic Hypothesis

Structure and Behavior

*F,==;.
Bahavior

Behavior
etdc

,./.kt
/" d'

/*.

/e{

Dynamlc Hypolh!3b: rcf.ronc. mod. b.t Yior

d by n.r .t!.ct o( R .tructuru & G .lructun

g.ncr.t

Formulate and Simulate

lllustrating the
Modeling Process

Formulate:
. write equationsthat reflect fundional relationships
.

r' Deli..rh. r6bkm DF. iallY

/
+

D.v.lop orn.hi. Hworh..k

rdndrE

&

sinur.r. rh. Mod.r

T.n $c raod.l
D.sia. Pou.rr

P "*'
H n"*.o
l-lo

btween variabls in the model.

Enter those equationsin computersimulation software
le.g., vensim,Stello/ilhinla Powe6iml.

Simulate:

. t se the simulation softlvare to run the model

. Compare modelt behaviorwith the referenc mode

4lL6l2oL4

Two Purposes of Equations

Equations should serve two purposes:

.
.

mathematical representation of structurc

u

Formulatingthe Model
Th..qu.tio^ r.rth. n

w could

h. w.in.n .3.n rla.bnic bmul.rion

or

th.

slocks.nd the ercg.nors pa6m.te6.

ndersta nding of that structure

Many different formulations can produce the Same

mathematicalresult.

undersbndinga model's structure, however, some

formulations are better than others.

For

ln

thi.

..*.

it

6uU b. rhown

th

"inL.rion

6t '

Replicate the Reference Mode

lllustrating the
Modeling Process
/

D.fin.rh.r6br.m

r!y..r-.ry

7 o6.,oP DF.6i.Hvpdh.sis

;;.;;

.->
DE

fiEt

tutk

in

nod.litg i5lo

E<tut

Prior to Testin8: lnitialize stock in

Use test functions (e.9., STEP, PUlJE, RAMP)

Refercnce bhavior pattern test

Extreme conditions tests

-'dF

th. Pnbbn.

Purpose of Model Validation

equilibium
.

I
. Structure-behevior

-r

D.liin rblid.r

Techniques for Testing a Model

.

-.

P "*ll'o,*-

,+

r*

tests

Parameter sensitivity tests

"vdli.hrion E th. ctoes ol.stdblkhlns @.id.M

ln th. toun tN$ on l ot tuln $ old nod.l:"
rorun.r .nd s.n!. 11980)

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What is "Poliqy'' and "Poliry Design"?

,@r!t prebhru lh r..db..t ry*.m. by mn.,ht .to.L.,
n.n.r. 3takr bv Eiul.tim n s i. oder lo ..hi.v. d.siEd

trr.
wb

lllustrating the
Modeling Process

ror.,

13

. ..t

of da<Uor rul.5 th.t

D.daloFn.llnt Gqulr6
! lnfom.iion i5 p@iled

Min.rh.

P6br.m

D.risi,.rd.r

'-

in om.don.
bv

curonr

v.l6r of 3rockr
i s.

lh

th. syst h.

r Th.l iniormrion B u*d to Eul.te

Dvn.miorry P

r' Dv.,op Dl,n.6i. Hypo,h6i!

r' Fdmuh.& simurrr. rh. Mod.r
Brrh.M.d.rd.t ik l.ter

3tekr,

caul.t t llffi.

"**
ll nr"*'*
.-l rry$
Peo",

The

llowr th.n .fi.ct th. futuE vrlu.! of sto.t!,

Ihur, poli(i.s .E cont iEd ininlDrmationt edb..k loops.

pobl.m.rk h.h.vior is c.us.d bvih. slMluE ol rh. iF.n.

==>Ch.ntintrfi. b.h.viorEquiE3.i.nainirh. ir.uctuE,

&rl9r,rrroli.yn..
ch.nrnld..itbnrul..rh.tpluLt
uu.ll, by @.llnt nd f..db.d loo, ttn cloro.

no*t

Search for Leverage Points

rr

r!!r

lllustrating the
Modeling Process
P

r' Min. th. PDbkD Crn: idlly

-Lr

r'D.Elo!otn.h-HYpolhdr

r' romul.r. & sihul.rc rlE Mod.l

r6t rh. irod.r d.r.ilt l.te.
D.ria. PolidB d.EiB

cd(q

d.iry

byqo

)^

iP\

l.r.r

\y

6 .cl r.L a**a;!.j:g

ininc

Inlbci.i

Validation is a Continuous Process

Model Tbstjng: What dos Modd Validw ltl.ean?

e9!riC!!$E!-cara!sr:

lgsrgEiCs$E!:
L.$ mntn dr or

Uriqu.ornduniqu.?

0,,,,(ff)6,r*"

L.$ rclul

or

6.ld .En&
Pa3i.nr

nm dlidml?

noc ur.ful?
or

rSoa mng.?

or.d pr4n.nrl

oo
'

ro buiu

iunifi.bl.oifld.E

la-

an

tn

rh. nod.l

th' mod'l

hlklotinqd

hod.l

@n. orcviding

ddcn.

to

juttty confu4.e in. ho.Ll.

th. mod.l.r 64r d.v.lop|u$ i.bL.o.fid.nc..

. Th.n th. cli.nt fr6t dd.lop jdtitilbl. 6nfid.n...
F,Rt,

-E=!Er_-l

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Intemal Consistencla Units

Testinga Model
(1) Conff rm unit

Why confirm unit consistency:

t M.dd, *nh .qu.iio.s haini hMrtsEm un[s rE niil.rdiia

consinen+

.id6u.lv*nhhs.
inMrind unib.E di*NEd

t wh.n

(2llnltialize in equllibrium & eveluate a shock test.

o,bdhrh.

(3)Compare model behavior with refrnc mode.

6t drrd, rh.
od.l ,nd mod.ln.ro drm{.d.

Ur.rioi

When to confirm unit consistencv:

r

,{ tomuln..n .cu.noi{d ir r3h rdn $. tun

tdr...rio: oo e.,,r!kt md Mh..d.$tW.
.!

(4) Define and condud extreme condition tests,

(5) Conduct and evaluate strudure/behaviortests.

How to document unit consi5tency:

. shw.ll unns on iah!!ld. dl .q!.tion .id d.monfin. $.t
rh.y Eduo ro rh. d..iEd unnr on rh. bn.id. ot thc .qu.tion.
. rllu*Erid: bidhe = poruLriff ! ldionJl6srh Et.

(5) Conduct parameter sensitivity tests.

p.MVF
psnvF,'

$el

lmgin. . rp.dic

shet lh. .FLm io

C.mp3B

. Fix

lo.

n...ii[ inv.nldi..,.l.

blth.n inili.l.quilibnuh

aiy

$.

nM 6v..Ld

l.1 .rd ptsdicl b.lEvior

end h.Ppont

,E b.tqvid rilh
by

your

,.mE' (p.Mtr..
!.Edll
p.Mc ' lrJrv!.4 = p.MB/ve

Extreme
Condition Test
. T.n
inpo$ibk E.l.Nld

Equilibrium Shock Test

. E.t

r.{t ,lotioll.6 i, unlik lr)Gultror Etin3srdk o. p.nn.r.trro

dEm.Elu6l.&,rml Fa a.mph, rhm rhould b. n..rcBrn6
lh@ .E no polie ..d .o t.k an.i th4 .E no JudSls.

. PulD6.:

ro

idcnriry..d ,ir

in@6

i..d.qu.r..qurrid!.

or

pddi.lion.

lh. l.1

1.

h.3in. : lreilic.nm.

2.

Pddid rlE h.haior in rh.r @ndition.

.ondnion.

,. c6dudrh. r.n ro &. wh.r h.F9.ni

a.c6p.Erh. b!h.vio.*
s

To

ro

b.h idof . mod.l

in

lh.

is

E3poNibl. ior errrin

ntodel.

rBt th. dyn.di. lrypoth.rit

-tolacih.t p.li.v dBian

to

rh. mod.l with th. L.d b.ck loop op.6tina, .o th.l you

"b.n.htu*a{om.lhins
2.

"cut th. looy' th.t you

3. Ru. th. nod.l

!!!9!!

for

l@p h..n5 to elimin.te iB

etu

in

th.

del.

typi..l wrys ol doiE rhis:

! ll th.E i. . p.Bh.l., i. lh. loop th.l en !o io ED
v.lu. toaF inrh. n.d.l,

in Eal

lib, $t it.

g.t.
t llrh.G is. i.hle tun.ti.n in th.looo
.fircl" valu. {i..., 1.0).

@mp.risn.

w.ntio.ElvE.
th. b.db.ck

".ul'. t.db*l

.lfrh.E i!.n.djusr6.nrim. in rh.loop thatcould b. "v.ry lollB" in

6.llif., s.t ite v.lu. ro . v.ry lair. numb.r(e.!.,1e+12).

Pe..,uE 6. F..db..k L@pAntlwt:

1, Run

Frrp..didi6i.

wlth & without th. i...tb.ck bop,

ld.ntlfy wh.i p..t .f th. structuE

ob6.r.d

byrh. i6r.

Cutting a Feedback toop

Strucure-Behavior Tests
. Cdrprc th.

Fu.nyfl.sd..l.d

k op,

.nd s..

th. b.hdior i.

iet.llotit3v.lu8roth.'no

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Policy Design

Sensitivitv
Tests
pa.m.l.u

F.r..cnt nmLrth.t

you

E lor.tt

slmol.L lith .ltF.tiw th. padmd.r

Cmp.B
-

nrodal Daharior

ior polEy

-i...

B. d.n

sFt

vd6.

ll&lling lrm .ll.mtiE p.nmels

r. an- ot Nn*, dlLdt

Da.tuidllld Ehe chry?

& d.n

G.h.6llv,'policv" i3rh.lindividu.ls.nd.q.niarions "do" wtEn

with pEbl.ru th.v aE tryina t n.n.i.,

oi,..dD.ck l@p.

ld.nri,y

Hdfrudr?

lhe

ro.'p.r.h.l.rJ

.li.nl highl b. .bl.

dyn.mi6 trEdek n.,aac p@blen5 in

in ord.r to.chi.v. d6lEd 3tck..

L.db..l ryri.n.

by

in 5D nod.h, . ,.liry i! . *t ot d..klon tul.r u..d for

b.tw..n d6iEd .nd .ctdl v.lu.r ol . .tck.

Th.Ebc,

pe.m.td.

p.rm.loB

flas

vc4..

lo

co.lEl

ln

sDmd.lr, poli.i$ iE @nt imd

in

anlorErion L.db.ct l@p3 b!rw..n

in.l @uH b. .nd,oo.ni4d.

O.tltnlry . ,olky EquiEs rrEnilh.niiA "B@d' loor5 ..d/or

"b.d" ro.pi by .h.ng, !h. ltructuc or . mod.l,

m.lc.i.g