System Dynamics – 1ZM65/1ZS24 Lecture 2 September 8, 2014 Dr.ir. Bob Walrave.
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Transcript of System Dynamics – 1ZM65/1ZS24 Lecture 2 September 8, 2014 Dr.ir. Bob Walrave.
System Dynamics – 1ZM65/1ZS24
Lecture 2
September 8, 2014
Dr.ir. Bob Walrave
Agenda
PAGE 218-04-23
• Recap of Lecture 1 • Structure and behavior of dynamic systems (chapter 4)• Causal loop diagramming (chapter 5)
Recap of Lecture 1
PAGE 318-04-23
• Dilbert contemplating policy resistance. “The behavior of a system arises from its structure!”
PAGE 418-04-23
Recap of this lecture (take-aways)
• System Dynamics is:• About understanding why and how things usually work out
differently than you expected (policy resistance)• About counterintuitive behavior of systems• Looking at the world differently: Feedback view• Seeing the bigger picture (bird’s-eye view)• A methodology to analyze problems
• Learning System Dynamics requires a lot of practice!• 5 ECTS = 140 hours• 18 weeks until due date 7.8 hrs/wk
Reference: Business Dynamics
PAGE 518-04-23
Recap of Lecture 1
• Characteristics of dynamic complex systems:
• The modeling process:
PAGE 618-04-23
your decisions
your goals
situation
unintendedside effects
goals ofothers
decisionsby others
1. Problem Articulation(Boundary Selection)
2. DynamicHypothesis
3. Formulation4. Testing
5. Policy Formulation& Evaluation
Policy resistance
Example of Test Question (Lecture 1)
• This figure describes the learning cycle. However, there are many barriers to learning that cause this cycle to fail.
• Which of the following examples is NOT a way to break this cycle? (which is NOT a barrier to learning) A) Time delayB) Dynamic complexityC) Misperception of feedbackD) Policy formulation
PAGE 718-04-23
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Agenda
• Recap of Lecture 1 • Structure and behavior of dynamic systems• Causal loop diagramming
Sterman, Chapter 4
Interactions of Structure and Behavior
• The behavior of a system arises from its structure.• Behavior = output of a simulation model• Structure = input of a simulation model, consisting
of• Feedback loops (causal loop diagram)
• Stocks and flows
• Time delays
• Nonlinearities
PAGE 918-04-23
SimulationModelstructure of the
systembehavior of the
system
Interactions of structure and behavior
• Structure
• Behavior over time
PAGE 1018-04-23
chickeneggs roadcrossings
+
+
+
-
time
chickens
= ???
time
chickens
time
chickens
+
Reinfo
rcin
g Loop
Balan
cing L
oop
Fundamental modes of behavior of dynamic systems
• Basis modes of dynamic behavior• Exponential growth• Goal seeking• Oscillation
• Interactions of basic modes• S-shaped growth• Growth & overshoot• Overshoot & collapse
• Other forms of behavior• Equilibrium• Random• Chaos
PAGE 1118-04-23
Exponential growth
PAGE 1218-04-23
Behavior Structure
money on bank account
interest per year
Besides growth, we can also have exponential decline!
Goal-seeking
PAGE 1318-04-23
Behavior Structure
desired number of customers of
a product
attract more customers by advertising in
supermarket
actual number of customers
This system is characterized by exponential decay (i.e., a half-life).
Oscillation
PAGE 1418-04-23
Behavior Structure
desired temperature in
the room is 20ºC
actual temperature in the room is 15 ºC
increase heater
S-shaped growth
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Behavior Structure
actual number of people in a bar
people allowed in the bar
is there still room in the bar?
The interaction between positive and negative loops is non-linear.
Growth & Overshoot
PAGE 1618-04-23
Behavior Structure
number of rabbits in a
meadow
Food available
Overshoot & Collapse
PAGE 1718-04-23
Behavior Structureactual number of people infected with a certain
type of flu
number of people that may
be infected
The more infected people, the less people may be infected
in the future
Model these fundamental modes of behavior in VENSIM PLE
Vensim illustration
PAGE 1818-04-23
• State of the system Stock• Net increase rate Flow
Systems archetypes
• Use these fundamental modes – by combining them – when you are modeling!
• Besides these fundamental modes there are generic templates that can be used to … • Interpret a Causal Loop Diagram’s overall nature
• Refine a preliminary CLD
• See the leverage in the CLD’s structure
PAGE 1918-04-23
Four well-known archetypes are:
1. Fixes that fail
2. Shifting the burden
3. Limits to growth
4. Tragedy of the commons
PAGE 2018-04-23
For more information on archetypes, see: Wolstenholme, E.F., 2003, Towards the definition and use of a core set of archetypal structures in system dynamics, System Dynamics Review, 19(1): 7-26
“Fixes that fail”
PAGE 2118-04-23
Problemsymptom
Fix
UnintendedConsequence
+
+
-
+delay
Recruitment of police to reduce reported crime
Increase of crime
Shortage of prison cells, leading to shortening
prison sentences
“Shifting the burden”
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Problemsymptom
FundamentalSolution
Side Effect
+
-
delay
Quick Fix
+ -
+
-
Expediting orders for important customersLead time is too
long in a production plant
Lead time of all other orders
becomes even longer.
“Limits to growth”
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Effort Performance LimitingAction
Constraint
+ + +
-+
Increase of sales effort leads to
increase of orders
Production capacity cannot keep up with increased demand, leading to longer production delays
Customers are unsatisfied with
long delays, leading to decrease of future orders
“Tragedy of the Commons”
PAGE 2418-04-23
delay
A's Activity Net gain for A
Total Activity
B's Activity Net gain for B
Gain perindividual activity
Resource limit
+
+
+
+
+
+
+
+
+
-
Increase number of visitors to a national park,
which increases profit, but also increases the damage to the park (disturb
wildlife)
Hoarding or bank-run
PAGE 2518-04-23
Agenda
• Recap of Lecture 1 • Structure and behavior of dynamic systems• Causal loop diagramming
Sterman, Chapter 55.1-5.4
Causal Loop Diagrams (CLDs)
• Capture hypotheses about the causes of dynamics• Elicit and capture mental models• Communicate the important feedbacks that are
responsible for a problem• See a CLD as a illustration of a story; a narrative that
explain how a certain problem came to be
• The loops within a CLD a characterized by ‘loop dominance’, which facilitate your story
PAGE 2618-04-23
Elements of a Causal Loop Diagram
• Basic elements: • Variables• Arrows (causal link)• Link polarity (+ or -)• Loop identifiers
• Additional elements: • Loop Polarity:
− Balancing− Reinforcing
• System Delays
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actual workpressure
perceived workpressure
quality of workhiring newemployees
total numberof productiveemployees
delay
delay
delay
coaching effortby experienced
employees
+
-
-
+
-
+
+
Link polarity: definitions and examples
• Positive link:The higher the actual work pressure, the higher the perceived work pressure will be, after a certain (time) delayor: lower actual work pressure leads to lower perceived work pressure
• Negative link:The higher the perceived work pressure, the lower the quality of work (more errors are made)or: lower perceived work pressure leads to higher quality of work
PAGE 2818-04-23
perceived workpressure
actual workpressure
+
perceived workpressure
quality of work-
CLD Represent causation, not correlation
PAGE 2918-04-23
Figure 5-2, Sterman: Causal diagrams must include only (what you believe to be) genuine causal relationships.
AverageTemperature
MurderRate
Ice CreamSales
+ +MurderRate
Ice CreamSales
+
CorrectIncorrect
AverageTemperature
MurderRate
Ice CreamSales
+ +MurderRate
Ice CreamSales
+
CorrectIncorrect
Label link and loop polarities
PAGE 3018-04-23
R BCustomerLoss Rate
CustomerBase
Sales fromWord ofMouth
CustomerLoss Rate
CustomerBase
Sales fromWord ofMouth
-
++
+
Incorrect
Correct
Figure 5-3, Sterman
? ?
“Challenge” p.143: assign polarity, add loops
• Consider the attractiveness of a product to customers as it depends on various attributes of the product.
• Assign link polarities.
• What feedback loops might be created as product attractiveness changes the demand for the firm’s product?
PAGE 3118-04-23
Figure 5-4, Sterman: The attractiveness of a product as it depends on various attributes.
ProductAttractiveness
Quality
Price
DeliveryDelay
Functionality
+
+
-
-
Demand
++
Challenge p.145: Identify and label the polarity of links and loops
PAGE 3218-04-23
ProfitsNumber of
Competitors
Attractiveness of Market
Price
Bank CashReserves
PerceivedSolvency of
Bank
NetWithdrawals
+
-+
++
-
-
Three ways to determine loop polarity
• The fast way: count the number of negative links
• A better way: trace the effect of change around a loop
• The formal way: do the mathematics
PAGE 3318-04-23
ProfitsNumber of
Competitors
Attractiveness of Market
Price
+
-+
+
Assign unambiguous polarities
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Figure 5-7, Sterman: Causal links must have unambiguous polarity
? (+ or -)
RevenuePrice
CorrectIncorrect
+
RevenuePrice
Sales+
-
?
Name and number your loops
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Haste MakesWaste
R2
CornerCutting
B2
Burnout
R1
MidnightOil
B1
Error Rate
Time perTask
SchedulePressure
Overtime
Fatigue
Productivity
CompletionRate
TimeRemaining
WorkRemaining
-- -
-
+
-
+
-
+
+
-
+
Delay
Delay
Figure 5-9, Sterman: Name and number your loops to increase diagram clarity and provide labels.
Indicate important delays in links
PAGE 3618-04-23
Figure 5-10 Representing delays in causal diagrams
Price Supply
+Delay
Variable names should be nouns or noun phrases
PAGE 3718-04-23
Figure 5-12: Sterman
Costs Price
++
CorrectIncorrect
Costs Rise Price Rises?
Variable names should have a clear sense of direction
PAGE 3818-04-23
Figure 5-13, Sterman
MentalAttitude
+Feedbackfrom the
Boss
Praise fromthe Boss
Morale
+
CorrectIncorrect
?
Choose variables whose normal sense of direction is positive
PAGE 3918-04-23
Figure 5-14, Sterman
Costs Profit
-
Costs Losses
+
Criticism Unhappiness
+
Criticism Happiness
-
CorrectIncorrect
Make intermediate links explicit
PAGE 4018-04-23
Figure 5-15, Sterman: Make intermediate links explicit to clarify a causal relationship.
MarketShare
UnitCosts
-
MarketShare
UnitCosts
ProductionVolume -
++ CumulativeProductionExperience
If your audience was confused by
you might make the intermediate concepts explicit as follows:
Make goals of negative loops explicit
PAGE 4118-04-23
Figure 5-16, Sterman: Make the goals of negative loops explicit.
B
QualityImprovement
Programs
ProductQuality
-
+
B QualityShortfall
+
+
+-
DesiredProductQuality
ProductQuality
QualityImprovement
Programs
CorrectIncorrect
B
Cooling Rate +
CoffeeTemperature
B TemperatureDifference
+
-+
CoffeeTemperature
CoolingRate
RoomTemperature-
-
Distinguish between actual and perceived conditions
PAGE 4218-04-23
Figure 5-17, Sterman
Bias inReporting
System
ManagementBias TowardHigh Quality
ManagementPerception of
Product Quality
ReportedProductQuality
B
QualityImprovement
Programs
QualityShortfall
DesiredProductQuality
ProductQuality
+
-
++
+
++
+
Delay
DelayDelay
Delay
Using Causal Diagrams to Model an Issue
examples
Using Causal Diagrams to Model an Issue
• The majority of our problems can be captured by a combination of two loops: balancing & reinforcing
• The balancing loop describes what our goal is, what we try to accomplish
• The reinforcing loop describes what our main obstacle is or could be
PAGE 4418-04-23
18-04-23PAGE 45
Structure & Behavior
- First the balancing loop is driving the behavior, because the actual weight is always close to the desired weight
- Around week 46 something happens, because the actual weight is not going back to its desired value
- The reinforcing loop is now dominant
Dominant loop: reinforcing
Dominant loop: balancing
week desired weight
actual weight
deviation
propensity to eat
food intake
-
+
-+
+
B
moodpropensity to snack(between meals)
need for comfortfood
-
-+
+
R
What do the loops tell us?
Balancing loop:• The loop is self-
stabilizing• The manager’s
primary role is to monitor
• Act only when there is an exception or likelihood of one, i.e., gap between desired & actual weight
Reinforcing loop: •The loop is not self-stabilizing•The manager’s primary role is to act•If the cycle is vicious, find a way to break it
18-04-23PAGE 46
Guest Satisfaction Index in a hotel
• The GSI in the hotel is measured on a monthly basis• When the GSI is above 8.2, the customers are happy,
as well as the hotel staff• However, the GSI recently dropped below 8.2, and
now management is worried • During a staff meeting, hotel management tells
everyone that customer focus should be increased• It is expected that after a while customer happiness
returns and that the GSI will rise accordingly
18-04-23PAGE 47
Where to start?
• Start with a narrative, a story• Underlying a specific problem
• What is the goal that you try to reach• What happens when you deviate from the goal
18-04-23PAGE 48
Drawing the first loop
Identify the goal seeking behavior in question
•Goal: desired GSI
Starting point: indication of drift from goal
•GSI Shortfall(desired – actual GSI)
Decision: focus on customer
•Effects: customer happiness, GSI
Link variables & qualify links, insert delays
Determine type of loop – balancing or reinforcing
18-04-23PAGE 49
GOAL: desired GSI
actual GSI
BGSI shortfall
focus oncustomer
customerhappiness
+-
++
+
The problem is not as easy as it looks
• The increased focus on the customer leads to extra work for most of the team
• After a while, the extra work starts to exhaust the team
• As a result of this exhaustion, some team members start making mistakes
• Although the customer is still happy with the increased focus, the mistakes made by the staff have a negative effect on the GSI
18-04-23PAGE 50
Drawing the second loop
Starting point: what could be another (side-) effect of increasing the focus on customers
Other variables: • More focus on customer can lead to extra work • Doing more work can lead to exhaustion • Exhaustion can lead to making mistakes, which reduces GSI
Link variables & qualify links, include delays
Determine type of loop – balancing or reinforcing 18-04-23PAGE 51
mistakes
+
R
-actual GSI
focus oncustomer
customerhappiness
+
B
GOAL: desired GSI
GSI shortfall
+-
++ +
exhaustion
+ extra work
What can we learn from the loops?
• As long as GSI increases while the focus on customer increases, the BALANCING loop is in charge
• Apparently the hotel staff can handle the extra work
• When GSI decreases while the focus increases, you are in danger. The REINFORCING loop takes over
• Act now!
18-04-23PAGE 52
mistakes
+
R
-actual GSI
focus oncustomer
customerhappiness
+
B
GOAL: desired GSI
GSI shortfall
+-
++ +
exhaustion
+ extra work
Using Causal Diagrams to Model an Issue
• But CLDs can become far more complex!
PAGE 5318-04-23
Causal loop diagramming (NRC 28 April 2010)
18-04-23PAGE 54
What is the problem with
this figure?
Using Causal Diagrams to Model an Issue
• Problem definition: managing workload• Identifying key variables:
• Assignment rate
• Work completion rate
• Assignment backlog
• Grades/Performance
• Workweek
• Energy level
• Developing the reference mode (next slide)• Developing the causal diagrams
PAGE 5518-04-23
Reference mode- example -
• When a person manages his workload according to the “grasshopper strategy”, work will not be done until the deadline is very near.
• As a consequence the assignment backlog builds up
• And when the deadline is near, working overtime (or even at night) is no exception.
PAGE 5618-04-23
Figure 5-20, Sterman: Reference mode for the grasshopper strategy
.
Time (weeks of the semester)0 13
Assignment Rate
Work Completion Rate
Tas
ks
pe
r w
ee
k
Time (weeks of the semester)0 13
Assignment Backlog
Tas
ks
Time (weeks of the semester)0 13
Workweek
Energy Level
Grades
100
0
Wo
rkw
ee
k (
ho
urs
/we
ek
)100
0
En
erg
y L
ev
el
(0-1
00
%)
Gra
de
s (
0-1
00
)
Develop causal diagrams – managing workload
PAGE 5718-04-23
Figure 5-21: Sterman: Basic control loops for the assignment backlog
AssignmentBacklog
AssignmentRate
WorkCompletion
Rate
Effort Devotedto Assignments
TimeRemaining
DueDate
Workweek
Productivity
B2
CornerCutting+
-
-+
+
+
+
-
-
-+
CalendarTime
WorkPressure
B1
MidnightOil
Adding the burnout-loop
PAGE 5818-04-23
Figure 5-22: Sterman: The burnout loop
AssignmentBacklog
AssignmentRate
WorkCompletion
Rate
Effort Devotedto Assignments
TimeRemaining
DueDate
Workweek
Productivity
B2
CornerCutting
R1
Burnout
+
-
-+
+
-+
+
+
-
-
-+
CalendarTime
Delay
WorkPressure
EnergyLevel
B1
MidnightOil
Adding the “too tired to think”-loop
PAGE 5918-04-23
Figure 5-23: Sterman: The “too tired to think” loop
AssignmentBacklog
AssignmentRate
WorkCompletion
Rate
Effort Devotedto Assignments
TimeRemaining
DueDate
Workweek
Productivity
Quality ofWork
Grades
B2
CornerCutting
R1
Burnout
R2
Too Tiredto Think
B3
QualityControl
-
+
-
-+
++
+
+
-+
+
+
-
-
-+
CalendarTime
Delay
WorkPressure
EnergyLevel
B1
MidnightOil
Adding “my dog ate my homework”-loop
PAGE 6018-04-23
Figure 5-24: Sterman: My dog ate my homework—Parkinson’s Law
AssignmentBacklog
AssignmentRate
WorkCompletion
Rate
Effort Devotedto Assignments
TimeRemaining
DueDate
Workweek
Productivity
Quality ofWork
Grades
B2
CornerCutting
B1
MidnightOil
R1
Burnout
R2
Too Tiredto Think
B3
QualityControl
-
+
-
-+
++
+
+
-+
+
+
-
-
-+
Requests forExtensions +
+
B4
My Dog AteMy Homework
CalendarTime
Delay
WorkPressure
EnergyLevel
From practice: what is the best team size?
• Linear view of the world:
Small teams low communication overhead high efficiency
But is this true?
• Lets examine the feedback view of the world
PAGE 6118-04-23
From practice: what is the best team size?
PAGE 6218-04-23
vulnerability todisturbances/deviations
-
+
interruptions,complications, etc.
+
+
increase focus
++
fatigue+-
knowledge sharing
-
dependency ontacit knowledge
-
+
overtime
++
priority change +
Info/resources notavailable
-
+
So, what is better: a large or a small team?
team size
communicationoverhead
efficiency
delays
need to increaseprogress
+-
+
+
progress
+
-
By the way: what is wrong with this CLD?
The beer game
• https://www.youtube.com/watch?v=qxpgM8paegQ• https://www.youtube.com/watch?v=Aqi5-KzQZWc
• Play the game here:• (http://www.beergame.lim.ethz.ch)
PAGE 6318-04-23
The beer game
PAGE 6418-04-23
Example of test question (Lecture 2)
• In the Netherlands, in the spring, when the sun is shining for the first time since months and the temperature is rising, many people want to go out and enjoy the lovely weather, instead of staying at the office. As a consequence, as soon as the temperature starts rising, many people take a day off (or a short holiday). Below, a causal structure of this phenomenon is given.
• What is the polarity of the links?A) Link 1 is positive, Link 2 is negativeB) Link 1 is positive, Link 2 is positiveC) Link 1 is negative, Link 2 is negativeD) Link 1 is negative, Link 2 is positive
PAGE 6518-04-23
Example of test question (Lecture 2)
PAGE 6618-04-23
• When people go on holiday, their colleagues have to take over some of their work. So, the workload for these colleagues is increasing. Most likely, these colleagues have to work overtime to get all the work done. Working overtime has a positive effect, because it increases productivity and reduces the remaining workload. But, it also has a negative effect, because it reduces motivation. The causal loops below describe this behavior.
• What is the polarity of the loops?A) Loop 1 is positive, Loop 2 is negativeB) Loop 1 is positive, Loop 2 is positiveC) Loop 1 is negative, Loop 2 is negativeD) Loop 1 is negative, Loop 2 is positive
Questions?
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