Showing papers in "System Dynamics Review in 1996"
TL;DR: This paper focuses on the formal aspects of validation and presents a taxonomy of various aspects and steps of formal model validation, including structure-oriented behavior tests, which seem to be the most promising direction for research on model validation.
Abstract: Model validation constitutes a very important step in system dynamics methodology. Yet, both published and informal evidence indicates that there has been little effort in system dynamics community explicitly devoted to model validity and validation. Validation is a prolonged and complicated process, involving both formal/quantitative tools and informal/qualitative ones. This paper focuses on the formal aspects of validation and presents a taxonomy of various aspects and steps of formal model validation. First, there is a very brief discussion of the philosophical issues involved in model validation, followed by a flowchart that describes the logical sequence in which various validation activities must be carried out. The crucial nature of structure validity in system dynamics (causal-descriptive) models is emphasized. Then examples are given of specific validity tests used in each of the three major stages of model validation: Structural tests, structure-oriented behavior tests and behavior pattern tests. Also discussed is if and to what extent statistical significance tests can be used in model validation. Among the three validation stages, the special importance of structure-oriented behavior tests is emphasized. These are strong behavior tests that can provide information on potential structure flaws. Since structure-oriented behavior tests combine the strength of structural orientation with the advantage of being quantifiable, they seem to be the most promising direction for research on model validation.
1,406 citations
TL;DR: An approach to system dynamics modeling is advocated that adheres to the scientific method, and that may be applied regardless of model scope or size, to help guide expectations and maximize effectiveness of the approach.
Abstract: An approach to system dynamics modeling is advocated that adheres to the scientific method, and that may be applied regardless of model scope or size. Scientific modeling is distinguished from other approaches largely by the quality of evaluation and revision performed and by an insistence upon empirical evidence to support hypotheses and formulations. Three case studies drawn from the author's experience are presented. Practical lessons for scientific modeling are given to help guide expectations and maximize effectiveness of the approach. Modelers and clients should clearly understand the level of rigor they wish to pursue and what this means for the degree of confidence that may be placed in model results and insights.
147 citations
TL;DR: In this article, the authors describe a qualitative modeling project where the primary goal was to establish consensus regarding the problem situation and commitment to the action necessary for change, but the project was not successful in creating full consensus on the course of action.
Abstract: An important objective of most system dynamics modeling projects is to support strategic decision making. This paper describes a (qualitative) modeling project where the primary goal was to establish consensus regarding the problem situation and commitment to the action necessary for change. The project was conducted with a group of mid-level managers of a company at the beginning of a period of organizational change. This group of managers engaged in a series of group model-building sessions, facilitated by the authors. Extensive evaluation of the project results indicates that consensus and commitment with regard to the problem have been established, but that the project was not successful in creating a full consensus on the course of action.
141 citations
TL;DR: If system dynamics models are to play a core role in the future developments of project management, it is important to understand their distinctive contribution to the current body of knowledge and their place in a future methodology.
Abstract: Recent dramatic project failures have weaknesses in the traditional approaches to project management and in particular their failure to cope System dynamics models provide a useful tool for a more systematic management of these strategic issues. There have been a number of applications of system dynamics in project management; this experience permits a tentative comparison with the more traditional approaches and to examine the particular benefits of system dynamics. The conflicts of opinion between their supporters stress the different perspectives underlying the two approaches. The comparison of the approaches is focused on the “view” of the project management process. Although, ultimately, they both assume a system perspective, a cycle of planning, implementation and control, the level of detail in which they consider the project system is different. Traditional models . highlighted The increasing rate of change and the complexity of the new technologies and markets impose the need for quick and effective responses. As a consequence many organisations are now adopting “management by projects” as a general approach (Turner 1993) and project success is a primary factor for the survival and prosperity of organisations. However, projects are also becoming more complex and project failure is unfortunately another major trend. Over-runs of 40 to 200 per cent are common, while other projects are cancelled before completion but after considerable expenditure (Morris and Hough 1987). The important role of project management in modern life has highlighted some of the deficiencies of traditional techniques and the search for an alternative. Traditional techniques can encourage a narrow, operational view of the project, concentrating on the detailed planning and several studies (Davidson and Huot 1991; Morris and Hough 1987) have identified the need for a more strategic approach. Systems dynamics appears to offer this strategic alternative, assuming a holistic view of the organisation with an emphasis on the behavioural aspects of projects and their relation with managerial strategies. This paper addresses the need for a better understanding of the nature, differences, similarities, and purposes of traditional and system dynamics approaches. If system dynamics models are to play a core role in the future developments of project management, it is important to understand their distinctive contribution to the current body of knowledge and their place in a future methodology.
129 citations
TL;DR: In this article, the author sets out a personal list of "problems" that must be solved if the field of system dynamics is "to advance beyond a craft, to approach the rigors of a science".
Abstract: In this provocative article, the author sets out a personal list of "problems" that must be solved if the field of system dynamics is "… to advance beyond a craft, to approach the rigors of a science." The problems include issues in the enhancement of technical and interpretive aspects of modeling, and in the advancement and propogation of good practice. These identified problems are characterised as those that are, through their difficulty, deserving of continuing attention, and at the same time are those that threaten the field if not resolved. The article carefully ends with an epilogue inviting response, rather than a conclusion.
122 citations
TL;DR: In this article, the authors present a modularly composed model of the innovation process which reflects the tight relationships between corporate actions and competitors' response, and explain how the dynamics of a product life cycle are generated, and how the firm's performance influences market behavior.
Abstract: The article describes results from an ongoing research project that was started several years ago. It outlines the concepts of computer-based decision support and the role of management simulators for innovation management. It presents a modularly composed model of the innovation process which reflects the tight relationships between corporate actions and competitors' response. The model explains how the dynamics of a product life cycle are generated, and how the firm's performance influences market behavior. Different innovation strategies, such as pricing, capacity expansion and the role of effective quality control, are analyzed and evaluated. The model is then extended to include the processes of research and development and their relationships to resource allocation and market success. A management simulator—based on the comprehensive innovation model—is introduced which supports teaching and training and fosters organizational learning.
102 citations
TL;DR: The concept of generic structure needs unbundling so that different assumptions about transferability of structure can be made explicit, and the role of generic structures as generalisable theories of dynamic behaviour in system dynamics theory and practice can be debated and clarified more effectively.
Abstract: This paper traces the evolution of the generic structure concept in system dynamics and discusses the different practical uses to which they have been put. A review of previous work leads to the identification of three different views of what a generic structure is and, hence, what transferability means. These different views are distinguishable in application as well as in theory. Examination of these interpretations shows that the assumptions behind them are quite distinct. From this analysis it is argued that it is no longer useful to treat generic structure as a single concept since the unity it implies is only superficial. The conclusion is that the concept needs unbundling so that different assumptions about transferability of structure can be made explicit, and the role of generic structures as generalisable theories of dynamic behaviour in system dynamics theory and practice can be debated and clarified more effectively.
76 citations
TL;DR: It is demonstrated that dynamic decision-making performance in complex systems can be significantly improved through appropriate interface design, and this conclusion has significant implications for system dynamics research.
Abstract: Research on dynamic decision making in complex systems has paid little attention to the impact of interface design on human performance. Ecological interface design (EID) is a theoretical framework for designing computer interfaces for complex human-machine systems that addresses this issue. This article provides an overview of a research program on EID conducted in the author's laboratory. A detailed example showing how the principles of EID can be applied to design an interface for a simplified but representative thermal-hydraulic process-control simulation is presented. Also, the results from laboratory research, lessons learned from an industrial prototype, and the details of technology transfer to industry are reviewed. Collectively, the findings from this research program demonstrate that dynamic decision-making performance in complex systems can be significantly improved through appropriate interface design. This conclusion has significant implications for system dynamics research.
57 citations
TL;DR: The model simulates the annual flows in the Snake at key points of interest to agricultural groups, environmental groups and the electric power industry and shows problems associated with junior water rights, declining water tables and declines in flows at points in the river where high flows are important for wildlife.
Abstract: This article describes the design and use of a computer simulation model of the Snake River. The model simulates the annual flows in the Snake at key points of interest to agricultural groups, environmental groups and the electric power industry. Simulations begin in the year 1895. The historical simulation shows the large increase in agricultural production and electric power production. The model also shows problems associated with junior water rights, declining water tables and declines in flows at points in the river where high flows are important for wildlife. The model may be used to experiment with policies to deal with these problems in the future. The unique feature of the model is its ease of use by a diverse group of individuals who are familiar with the Snake but may not be experts in computer simulation. The article describes the reaction of a group of 30 individuals who met in Boise, Idaho to test the usefulness of the model.
53 citations
TL;DR: This paper provides a number of epistemological and methodological reflections on modeling and simulation through system dynamics and the special type of knowledge provided by system dynamics models.
Abstract: This paper provides a number of epistemological and methodological reflections on modeling and simulation through system dynamics and the special type of knowledge provided by system dynamics models. Our principal concern will be to analyze the sense in which system dynamics models endeavour to grasp or represent relevant aspects of reality. Two main perspectives have tended to be advanced with regard to this topic: the naive realism linked to philosophies of science, such as those
36 citations
TL;DR: The proposed amalgamation of the qualitative social fabric matrix with quantitative system dynamics presents a more systematic modelling process for practical application and yields some added conceptual insights into the nature of management processes and prospects for control.
Abstract: All socio-economic systems are characterised by a complexity of interacting influence patterns that would usually incorporate institutional, environmental, technological and behavioural relationships The challenge for management is to develop a sufficiently detailed understanding of these influences in order to develop effective opportunities and mechanisms for control This challenge is heightened by the tradition of "partial" or non-holistic thinking that continues as the conventional wisdom in the management field Though the imperative for holistic thinking is intuitively supported by most managers, the difficulties associated with implementing these ideas into management practice may be perceived as being "too hard" or "open ended" for practical application System dynamics modelling is an appropriate process for developing an holistic understanding of any socio economic system A realistic model can be applied to the development of management strategies and decision support To a novice modeller, however, model construction can be an intimidating process lacking in the kind of systematic procedural support seemingly offered by the more conventional, non-holistic management school To a large degree the integration of the qualitative social fabric matrix with quantitative system dynamics presents a more systematic modelling process for practical application The proposed amalgamation also yields some added conceptual insights into the nature of management processes and prospects for control
TL;DR: In this article, the authors formulate the operational means to implement the critical recommendations of the "Limits to Growth" study and experiment with the World3 model to accommodate controversial views on resource policy and to self-regulate its critical policy parameters.
Abstract: Experimenting further with the World3 model, this paper attempts to formulate the operational means to implement the critical recommendations of the "Limits to Growth" study. With feedback as the organizing principle and the work of Daly (1991), Page (1977) and Saeed (1985) as guidelines, additional policy space has been built into the model to accommodate controversial views on resource policy and to self-regulate its critical policy parameters. The policies so created not only appear to lie within the scope of existing and potentially feasible regulatory institutions, they are also insensitive to their respective behavioral parameters as well as to the timing of intervention. Furthermore, these policies strive to influence day-by-day actions of the actors in the system instead of imposing the drastic schedule of changes in life-style that is implicit in the literal interpretation of the broad recommendations of the "Limits" study. In addition, the implementation of these policies appears to be possible through a national rather than a global order.
TL;DR: In this article, the authors present methodological and problem-related insights created over the course of an extended research effort that yielded the essays of the book "Towards Sustainable Development, Essays on System Analysis of National Policy".
Abstract: This paper represents the text of the obligatory talk given by the author on receipt of the 1995 Jay Wright Forrester Award for his book titled "Towards Sustainable Development, Essays on System Analysis of National Policy." The paper documents methodological and problem-related insights created over the course of an extended research effort that yielded the essays of the book. The methodological principles elaborated include the use of a diverse data base for model development, the partitioning of a complex problem into tractable parts and the process of building confidence in a model. The problem-related insights cover the concept of economic value, its diverse manifestations and their implications for sustainable development. An attempt is made to extend the concepts learnt to the global economic system and research agendas are outlined for addressing the problems of global sustenance.
TL;DR: It is suggested that contract design for macro-engineering projects can be improved through use of the experimental procedure system dynamics, drawing on formal modeling and computer simulation of complex relationships to arrive at realistic terms of contract.
Abstract: Macro-engineering projects often end up unprofitably. An important cause of this appears to be the contract design, which does not take into account the complexity of internal and external information relationships arising from the scale of the project. The scale necessitates viewing the project as a one-of-kind task rather than an assembly process. It also requires taking into account the impact of the project on its economic environment. It is suggested that contract design for macro-engineering projects can be improved through use of the experimental procedure system dynamics, drawing on formal modeling and computer simulation of complex relationships to arrive at realistic terms of contract, as well as for designing a functional project organization.