User:Apdevries/System dynamics

System Dynamics is an approach to understanding the behaviour of complex systems over time. It deals with internal feedback loops and time delays that affect the behaviour of the entire system.^[1]

What makes using System Dynamics different from other approaches to studying complex systems is the use of feedback loops and stocks and flows. These elements help describe even seemingly simple systems display baffling nonlinearity.

Computer software is used to simulate a system dynamics model of the situation being studied. Running "what if" simulations to test certain policies on such a model can greatly aid in understanding how the system changes over time.

System dynamics is very similar to systems thinking and constructs the same causal loop diagrams of systems with feedback. However, system dynamics typically goes further and utilises simulation to study the behaviour of systems and the impact of alternative policies.^[2]

History

Systems Dynamics was founded in the early 1960s by Jay W. Forrester of the MIT Sloan School of Management with the establishment of the MIT System Dynamics Group. At that time, he began applying what he had learned about systems during his work in electrical engineering to everyday kinds of systems.

Elements

The elements of system dynamics diagrams are feedback, accumulation of flows into stocks and time delays.

Causal loop diagrams

**Causal loop diagram of new product adoption**

Stock and flow diagrams

**Stock and flow diagram of new product adoption**

Equations

The real power of systems dynamics is utilised through simulation. Although it is possible to perform the modeling in a spreadsheet, there is a variety of software packages that have been optimised for this.

The steps involved in a simulation are:

Define the problem boundary
Identify the most important stocks and flows that change these stock levels
Identify sources of information that impact the flows
Identify the main feedback loops
Draw a causal loop diagram that links the stocks, flows and sources of information
Write the equations that determine the flows
Estimate the parameters and initial conditions. These can be estimated using statistical methods, expert opinion, market research data or other relevant sources of information.^[3]
Simulate the model and analyse results

The equations that for the causal loop example are:

 $\ Adopters=\int _{0}^{t}{\mbox{New adopters }}\,dt$ 

 $\ {\mbox{Potential adopters}}=\int _{0}^{t}{\mbox{-New adopters }}\,dt$ 

 $\ {\mbox{New adopters}}={\mbox{Innovators}}+{\mbox{Imitators}}$ 

 $\ {\mbox{Innovators}}=p\cdot {\mbox{Potential adopters}}$ 

 $\ {\mbox{Imitators}}=q\cdot {\mbox{Adopters}}\cdot {\mbox{Probability that contact has not yet adopted}}$ 

 $\ {\mbox{Probability that contact has not yet adopted}}={\frac {\mbox{Potential adopters}}{{\mbox{Potential adopters }}+{\mbox{ Adopters}}}}$ 

 $\ p=0.03$ 

 $\ q=0.4$

Simulation results

Practical application

System dynamics has found application in a wide range of areas, for example population, ecological and economic systems, which usually interact strongly with each other.

References

^ http://sysdyn.clexchange.org
^ http://www.albany.edu/cpr/sds/
^ Sterman, John D. (2001). "System dynamics modeling: Tools for learning in a complex world". California management review. 43 (1): 8–25. {{cite journal}}: Cite has empty unknown parameter: |month= (help)

Sterman, John D. (2000). Business Dynamics: Systems thinking and modeling for a complex world. McGraw Hill. ISBN 0-07-231135-5.

Meadows, Donella H. (1972). Limits to Growth. New York: University books. ISBN 0-87663-165-0.

Senge, Peter (1990). The Fifth Discipline. Currency. ISBN 0-385-26095-4.

Forrester, Jay W. (1961). Industrial Dynamics. MIT Press. SBN 262-06003-5.

External links

Organisations

Articles

Software

[sysdyn-1] ttp://sysdyn.clexchange.org

[SysDynSociety-2] ttp://www.albany.edu/cpr/sds/

[Sterman2001CMR-3] Sterman, John D. (2001). "System dynamics modeling: Tools for learning in a complex world". California management review. 43 (1): 8–25. {{cite journal}}: Cite has empty unknown parameter: |month= (help)

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