Conference Proceedings

The 10th International Conference of the System Dynamics Society
1992 Utrecht, Netherlands

The following papers were presented at the conference in parallel and plenary sessions. The original printed proceedings, edited by Jac A. M. Vennix, Jan Faber, Wim J. Scheper and Cees A. Th. Takkenberg were printed in hardcopy and distributed at the conference. Below please find the Paper Index for these proceedings including abstracts. Papers are listed alphabetically by the last name of the first author. Available papers are Acrobat (.pdf) files and can be read using Acrobat Reader available from

For details about purchasing a copy of the printed proceedings, visit our website System Dynamics Society.

 PAPER INDEX - listed alphabetically by first author:

An Oil-Field Planning Support System Based on System Based on System Dynamics
Lu Aiszhu, Hu Zheng

Abstract: In this paper, we connected the principles of System Dynamics with the intellectualized Decision Support System, proposed a theory and method system of “Simulation-Optimization-Planning –Decision”. An applicable Oil-Field Planning Support System is being built.

Participative Modeling to Support Strategic Decision Making in Operations - A Case Study
Henk Akkermans

Abstract: In this paper a case study is described in which a consultancy method based upon participative modeling was used to support strategic decision making in the field of operations. In this case study the Dutch client company faced serious logistical and financial problems after an attempt to attain competitive advantage through drastic improvement of it delivery speed. The modeling project produced several valuable insights. These insights have resulted in a better logistical performance at lower cost. The participative approach taken in the project has made implementation of the recommendation resulting from the project easier. It has also resulted in a better quality of systems thinking and a better understanding of the operations system throughout the company. In short, in organizational learning. This case study has been conducted within a research project aimed at the development of a modeling orientated consultancy method to support strategic decision making in operations. Several observations made in this case study with respect to the development of this consultancy method are discussed.

Insertion of Input-Output Model into System Dynamic Approach
Fuad Amsyari

Abstract: Input-Output Model (I/O model) is an approach developed in economic world for development planning of a Nation. The model founded by a Noble Prize Winner, Prof. Leontief, focused the operation on the determination of production of economic commodities needed for development of a nation. The mathematical aspect of the model requires matrix analysis using equation (A-I)*X=Y as the basic calculation. Surprisingly, I/O model has received wide appreciation for calculating the economic of many nations, including developed countries such as US, Denmark, and Japan, and developing countries such as Indonesia as well.  
On the other hand, system dynamic approach founded by Prof. Jay Forrester are getting more attention in recent years and people start thinking of using the approach to solve various national development problems. However, since the application of the technique for establishment of world model, no one country yet uses comprehensively the approach to the national development planning. There has been a case study using the technique to exercise the development of Java Island Ecosystem in Indonesia, but it still needs to be more promoted for further application of the theory.
As the development process of a nation does not anymore cover only economic concerns, while the environment and social dimension of a country are getting more attention, a national development planning will certainly requires a more comprehensive approach to analyze alternative scenarios to the development of the country. In such a case system dynamic approach seems to meet the requirement of a national development planning.

Qualitative Behavior Associated to System Dynamics Influence Diagrams
Javier Aracil, Miguel Toro

Abstract:The paper introduces a simple dynamical system associated to the influence diagram, which contains only qualitative information. It is analysed how with the information in the influence diagram only limited conclusions about the behavior of the system can be reached. However, with some extra qualitative information regarding the relative weight of the influences those limitations are overcome.

Frequency and Experiential Learning in Unstable Markers
Bent E. Bakken

Abstract: Long delivery delays and long asset life times can create market conditions that are not conductive to learning. An experiment recreated market cycle of 8 to 23 years. Subjects operated in a sequence of two 40 period market trials. The hypothesis that learning is helped by higher market frequency was corroborated, yet it was found that subjects transfer poorly when market frequencies remain unchanged across trials. This is explained by the fact that subjects in the changed frequency condition also expect a changed environment and so adjust behavior. When subjects do not expect change in market behavior, as in the unchanged frequency condition, subjects induce negative transfer, i e they transfer decision timing from the past. Since the markets’ external environments never remain identical, such transfer is less appropriate than structural transfer. Implications for stabilizing unstable markets and training professionals are finally laid out.

An Interactive Simulation Game for Software Project Management (SOFTSIM)
Yaman Barlas, Ibrahim Bayraktutar

Abstract: Various uses of system dynamics models in understanding and managing software projects have been discussed in a series of articles by Tarek Abdel-Hamid and  Stuart Madnick. Our work extends Abdel-Hamid and Madnick’s work by constructing a simulation game that can be used by mangers as a participatory learning laboratory. The game is implemented on IBM-PC environment, using the graphics-based spreadsheet software WingZ. Initial tests of the simulation game have demonstrated it to be robust and realistic. The game is now in the process of being tested extensively by players with different backgrounds: undergraduates and graduate students of system analysis, faculty members, and software/MIS professionals. In addition to describing the game, our talk will contain lessons learned from these extended tests and experiments. The presentation will also involve an active demonstration.

Strategy Simulation and Scenario Planning: An Application of Generic System Structures
Michael Bean, Ernst W. Diehl, David P. Kreutzer

Abstract: Using a generic model framework, a consortium comprised of three manufacturing firms and one service company was able to create realistic representations of their internal and external competitive environments and analyze the consequences of their competitive strategies. The interface designed with the framework has proven to be a useful tool to support decision makers when they present their findings and analyses to their colleagues. Strategy simulations and the resulting scenarios can be useful tools for understanding the interrelationships of different elements within a competitive system and for identifying critical leverage points that may help a firm create a competitive advantage over its competitors.

Professional Training of Engineer on System Dynamics
Yang Bingzheng, wu Xu Guang, Yang Futuau

Abstract: In this paper a professional training schedule on system dynamics for engineers is discussed on the basis of ten years teaching and training practice.
Three main parts are considered in detail. These are theory, practice, and final performance test. All examples included are to meet the specific necessity of engineers, and are coming from practical problems.
An overall block Diagram of Training is presented. Practice shows this schedule is efficient and attractive.

System Dynamics: A Form of the Integrative System Approach
Steven A. Cavaleri

Abstract:There are many different systems approaches and styles of systems thinking that have developed over the past three decades. There a few conceptual frameworks on which to compare the relative merits of each approach. This paper will propose such a conceptual framework, the “systems paradigms framework”. Within the context of this framework new systems approach will be described. It is labelled the “integrative systems approach”. It will be argued that the system dynamics perspective is the best existing example of the integrative approach. The integrative approach will be compared to the hard systems, soft systems, and cybernetic systems approaches, in terms of the systems paradigms framework.

Evolution Dynamics of Some Two-Phase Systems
Nguyen Chan

Abstract: We treat some problems of controlling the development of a two-phase system which is identified with the evolution of its inter-face. First we study the class of so-called decision change regimes and find out an estimate for the number of decision changes. Then we consider the possibility of optimal control in this class.

Safety Promotion of Process Operations in the Chemical Process Industries
Chun-Yu Chen, Donp-Liang Hwang

Abstract: This paper discusses how to use the simulation data obtained from the adiabatic reaction calorimeter (ARC) to design the emergency relief system for chemical reactors and storage vessels to overcome the problem of reactors explosions resulted from excessive pressure and thus the disastrous incidents can be avoided. Here the styrene polymerization reaction is choosen as the reaction system to describe the design of emergency relief system using the ARC data. The simulation results show that the change of the initiator and the monomer concentration will influence the maximum temperature, pressure and the rate of temperature rise in the reactor. The simulation results also illustrate that in the designing of the emergency relief system, the larger the overpressure is, and the smaller the vent diameter will be needed.

As Hypermedia based Delphi Tool for Knowledge Acquisition in Model Building
D.A. Corben, E.F. Wolstenholme

Abstract: The Delphi method has been used as a method of knowledge capture and consensus building in a variety of social and managerial areas for a considerable period of time and more recently it has been applied in the field of System Dynamics.
This paper describes research into the development and application of a computerised version of the Delphi method to assist the development of System Dynamics models. It has been developed in the context of project aimed at improving the design and assessment of computer based information systems.
The features of a Hypermedia based Delphi system that has been developed for the Apple Macintosh are described and the results of its application to a modelling exercise are discussed, with particular emphasis on its ability to create consensus influence diagrams.

 The Structure-Behavior Diagram: Understanding the Relationship Between Structure and Behavior in Complex Dynamic Systems
Pål I.Davidsen

Abstract: One of our major challenges in system dynamics, and a prerequisite for successful policy design, is to establish an understanding of the relationship between the structure and the behavior of complex, dynamic systems. In this paper, we propose the utilization of a combination of a phase- and a time-plot, called a structure-behavior diagram, to obtain such an understanding. To demonstrate its usefulness, we apply the diagram in order to explain the transient behavior of a simple ecological system and illustrate the dynamics of its modes of behavior under changing harvesting intensity. Our discussion focuses on equilibria and shifts in the dominant polarity and indicates a qualitative difference between the two with respect to resistance to bifurcations.

The Model as a Lens: Combining Modeling and Data Support Systems to Aid in Executive Decision-Making
Ernst W. Diehl

Abstract: System dynamics models and executive information systems have complementary strengths in aiding decision making. Information system has vast data retrieval and presentation capabilities. Models provide a dynamic framework for exploring the long-term, systemic implications of decision and polices. This paper reports on an attempt to combine the two approaches-using the model as a lens to structure and view data sets. This paper briefly describes the lens-based executive information system method and explores four tangible benefits of this integrated approach to decision-making.

Negotiating Needs: Using Cybernetics and Syntonics to Rewrite the Script
Julia M. Di Stefano

Abstract: Negotiation between individuals, groups, and nation has been much in the news lately, and has merited the attention of system dynamic modelers, as was evident at the plenary session on negotiations at the 1990 International System Dynamics Conference. The “Behavioral Simulation Model of Single and Iterative Negotiations” presented there by Darling and Richardson provided a realistic model of critical factors negotiators take into account “while engaged in a joint decision-making process that leads to an outcome” (1990,299). This paper uses their model to explain why “long-term interdependent relationships…[sometimes] drift into increasingly competitive, acrimonious behavior…”(240). Using a fictional piece--“Tell Me a Riddle” by Tillie Olsen--this paper explores “the source of these [competitive] dynamics [which] may be found in the negotiators’ cognitive characteristics --the structure of problems they confront, their situational goals, and their behavioral limits and biases…” (240). After analyzing the behavior of the negotiators-- a couple that has been married for forty- seven years--this paper reframes the power distribution in the relationship and re-writes the script, using cybernetics and syntonoics, a system of interpersonal communication based on “being in tune with one another linguistically”(Elgin, 1987,23). The resulting script saves the wife from becoming a victim of her husband’s verbal abuse, and leads to more satisfactory negotiations.

A Model for Management Modernization and Institutional Improvement
Isaac Dyner & F. Javier Diaz S.

Abstract: This paper reports results of research on modelling to support management modernization and institutional improvement. It considers middle and long term strategies, and it analyses the effect of successful programs.  System Dynamics, an appropriate methodology to support institutional planning, may help to understand system organization, its internal structure and the impact of policies and external perturbations. Strategies analyzed here are based on information systems, management decentralization, and leadership.
Simulation results are useful to understand the pertinence of selected strategies.

Taming the Decision Tide within Organizations: Some Theoretical Considerations and Experimental Results
Jan Faber, Wim Scheper

Abstract: A STELLA model of a simple production organization is used to investigate the effects of different types of coordination on the adaptation of the organization to its changing environment.

The Evaluation and Development of Knowledge Acquisition in System Dynamics Studies
Willard Fey, Frank Spital

Abstract: An examination of knowledge acquisition techniques and knowledge representation structures used in expert system development and technology forecasting, helped to determine how to elicit information from System Dynamics analysts. In this ongoing research, insights from the literature on knowledge acquisition, combined with knowledge elicited from System Dynamics analysts, are being used to develop an approach designed to improve the knowledge acquisition processes and structures used during the problem formulation and model conceptualization activities of System Dynamics. Also, preliminary insights are presented regarding the selection of knowledge acquisition techniques and knowledge representation structures.

Organization Design and the Dynamics of Performance over the Long Term
Henry M. Frechette, Jr., Frank Spital

Abstract: This paper addresses the issue of organizational design and its impact on long term business performance. There is evidence that organizations progress through a series of cycles. We examine the organization design recommendations of Forrester in terms of their impact on delays in a company. We then run a small simulation to explore the impact of these delays on long term company performance. We conclude that most organization structures act to impede long term performance.

Is Thalassemia a Dynamical Disease?
U. Giani, A. Filosa

Abstract: Recently the traditional view of “health” as “regularity” has been challenged, and normality is conceived as a sort of constrained randomness and pathology as a loss of the so called spectral reserve. Dynamical diseases would be due to changes in the qualitative dynamics corresponding to bifurcations in the non linear equations describing the system. In this respect, some hematological diseases were modeled in terms of differential-delay equations by assuming a delayed regulation of blood cells production. In the present paper the temporal evolution of the hemoglobin destruction rate of 23 thalassemic children is analyzed. The results indicate that these models are to be partialy revised and that Thalassemia can be conceived as a dynamical disease. A relation between the qualitative dynamics of Hb rate of destruction and the clinical evolution is suggested.

System Dynamics and the Credibility Syndrome
M. Govindarajan

Abstract: Classical system dynamics has been presented as a paradigm in its own right. Causal explanations and repeated simulations are the main forte of the method. However, the perceptions on the nature and purpose of the method are so varied that many researchers cannot even place system dynamics in taxonomy of modelling methods. It is difficult to assess the value of system dynamics and justify the choice of such a method. Does the method lack real life significance and suffer from a credibility crisis? The paper looks at the credibility problem from both a philosophical and researcher’s perspective.

Behavioural Dynamics and Marketing Technology-Based Products
M. Govindarajan

Abstract: The technology-based products are marked by the severity of learning requirements for the users. Marketing efforts should, therefore, represent not only promotional but detailing activities as well, to overcome the behavioural, technological and related marketing constraints faced by the products. Sales, though a significant factor, does not, by itself, explain the intricacies of the dynamics of marketing. The study tries to explain the nature of interactions amongst behavioural variables that contribute to the successful marketing of technology-based products.

Structure Analysis of Complex Systems and its Application
Yan Guangle

Abstract: With the continuing rise of the complexity of objects, it becomes more and more important and urgent to study the complexity of systems. However we still feel difficult in treating large scale and complex systems in technique because of the high order, multiloop and nonlinerity. In the light of synergetics, a new method of structure analysis is developed. It may have not only the theoretical, but also the practical meanings in the parameter estimations, system optimization, model simplification, dominant loop determination, policy test, etc.

Investigating Organizational Learning with a Corporate System Model Using Artificial Intelligence Procedures
Roger I. Hall

Abstract: An Artificial Intelligence (AI) model the mimics the behavioral processes of managerial policy making is outlined. The model takes an equation set representing a System Dynamics (SD) corporate model and interprets it as a surrogate cognitive map of the organization’s domains. The model seeks policies to satisfy the goals of all departments or, where this is not feasible, the goals of the dominant departments only. These polices are used to drive the SD model for a simulated year and the results are fed back to affect organizational learning, that in turn affects the policies adopted for the next period, and so on. Experiments can be run to investigate the effects of performance on organizational learning and vice versa.

Decision Support for Storm Surge Barrier Control
Aart van Harten

Abstract: Accurate simulation of the dynamics of the aquatic system requires the use of rather advanced hydraulic models. Here lies a key problem, which will be discussed in this paper. How to determine an adequate simulation model and numerical solution scheme which combine accuracy and real time response as necessary for this barrier control application. It will be clear that in case of operational control of a storm surge barrier one is confronted with several potentially conflicting objectives and requirements. Flood protection is usually the main objective, but several other aspects than safety will be important in finding an effective control strategy. This situation has characteristics of multi-criteria decision making. Altogether the complexity of obtaining justified closure decisions requires a multi-disciplinary decision team. In this paper we shall also discuss the structure of decision support systems to optimise storm surge barrier control operations. Starting point will be the system as used for the Eastern Scheldt barrier, but also some recent research results based on applications of more advanced tools from systems theory and optimal control theory will be discussed in the sequel. Attention will be payed to the following natural question for modelbased support system: which quality characteristics are important for the model, (accuracy, robustness), what sort of optimisation is performed and how is it implemented , how is uncertainty handling taken care off, how is the interaction between the human decision making team and the models.
Also, the effectiveness of the planning of closure operations upto now will be evaluated

Understanding Cyclical Pattern of Taiwan’s Housing Market: A System Dynamics Approach
G. Gary Hu, Shih Hui Lo

Abstract: The housing market of Taiwan thrived in the years of 1973, 1980, and 1987 respectively, and the rises of every seven years in housing price have brought numerous social and economic problems. In order to understand the micro-structure of the housing market, we developed a system dynamics model of the market’s multi-sector, in which landowners, construction companies, house buyers and house speculators are included. The interactions among decisions of various sectors formulate the micro-structure of the model. Through computer simulation, the cyclical fluctuations are generated and some macro-behaviors of the housing market model are explained.

The Management of Public Distribution System in India- A Dynamic Perspective (The Case of Tamil Nadu)
Fatima P. Jacob

Abstract: Public Distribution System (PDS) in India is a consumer-side intervention in the food market. There are two basic aspects of evaluating the effect of policy intervention in PDS. One is analyse the overall percapita availability of cereals and the other is the percapita consumption. Based on this, the proposed system dynamics model looks at the intended Government policies to ensure whether the objectives of the PDS have been achieved.

The Dynamics of Charismatic Leadership in Organizations
Chanoch Jacobsen, Robert J. House

Abstract: An integrated theory of charismatic leadership was developed, and a System Dynamics model built of that theory. Applying the model to J.F. Kennedy, four data sets relating to the Peace Corps were successfuly reproduced by the model with the same set of initial values, attesting to the sensitivity of the general theory and model to the manifestation of JFK’s charismatic leadership.

Research and Development for Corporate Survival : A Case Study of a Brewery Corporation in Columbia
Salustriano Jimenez, Isaac Dyner

Abstract: The model presented in this paper establishes the role of Research and Development for survival and growth of a brewery corporation in a particular environment. Simulation results confirm poor performance under pessimistic scenarios including little investment in research, high competition and poor political, economical and social conditions.

Do Markets Mitigate Misperceptions of Feedback in Dynamic Tasks?
Christian Kampmann, John D. Sterman

Abstract: We test the ability of the market forces to mitigate the dysfunctional effects of systematic ‘misperceptions of feedback’ – mental models, which ignore critical elements of a task’s feedback structure –demonstrated in prior experiments. We create a simulated multiple- agent market under two feedback complexity conditions (simple and complex) and three-market institutions (fixed, market clearing, and posted prices). While performance relative to optimal in the market clearing and posted price condition, complexity significantly degraded relative performance in all conditions. Markets moderate but do not eliminate the negative impact of misperceptions of feedback.

SDACQUIRE A Tutorial for Imparting the Methodical Foundations of System Dynamics
Guido Kaupe

Abstract: In today’s “Information Age”, the steadily rising requirements for communication and assimilation of knowledge present us with the constant need to confront new knowledge acquisition methods. One of these methods is Computer Assisted Learning or Computer Based Training. Because of the clear advantages evident in this type of instruction, the German-language computer-based tutorial SDACQUIRE was developed in the Department of Policy Management in Industry at Mannheim University. The goal of this program is to impart to the user the methodological fundamentals of System Dynamics.
This paper presents a description of various aspects of the program’s development, implementation and application. Following a brief exposition of the evolution and benefits of Computer Assisted Learning, a description is given of the important aspects of the modular development of SDACQUIRE. A discussion of the components of individual lessons is then provided, leading into a final section on the interactive communication connected with the program’s use.

An Archetype Based Management Team Flight Simulator
Jennnifer M. Kemeny, W. Brian Kreutzer

Abstract: The potential of simulation technology to facilitate learning has been evident for many years. Yet in our experience most Management Simulators, while interesting and fun, are only partially fulfilling that potential. Particularly challenging has been the use of simulations to support team rather than individual learning. In the past two years Innovation Associates and Gould-Kreutzer Associates have produced and used Management Team Flight Simulators (MTFS) which support team learning through several new approaches. Our experience in creating these MTFS provides strong anecdotal evidence that with these approaches a very simple model can have a powerful impact on team learning.

System Archetypes as a Diagnostic Tool: A Field-based Study of TQM Implementations
Daniel H. Kim, Gary Burchill

Abstract: System dynamics provides an important set of principles and methods for helping people gain a better understanding of complex systems. The use of computer simulation models is often positioned as the culminating outcome of most system dynamics efforts. As a field, system dynamics has traditionally downplayed the usefulness of simple pen and paper level tools because the real value is perceived to be in the computer model. Total Quality Management (TQM), on the other hand, utilizes almost exclusively, pen and paper types of tools and has had a high level of successes in having them used widely. This is the case despite the fact that causal loop diagrams and systems archetypes often capture a much richer picture of a system than most TQM diagramming tools. In this paper, we outline a general approach to diagnosis using systems archetype, causal loop diagrams, and semantics in the development of a structured process for mapping organizational change efforts.

Sensitivity Analysis of System Dynamics Models: Regression Analysis and Statistical Design.
Jack P.C Kleijnen

Abstract: This tutorial gives a survey of strategic issues in the statistical design and analysis of experiments with System Dynamics models. These models may be either deterministic or random. The strategic issues include what-if analysis and optimization. The analysis uses regression (meta) models and Least Squares. The design uses classical experimental designs such as 2 k-p factorials, which are efficient and effective. If there are very many inputs, then special techniques such as group screening and sequential bifurcation are useful. Some applications are discussed briefly.


The Quahog Oil Production Simulator: A Case Study of the Rapid Development of a Management Flight Simulator for Training
W. Brian Kreutzer, David P Kreutzer, Janet M. Gould

Abstract: The People Express Management Flight Simulator (Sterman 1992) developed a new area of research in the use of interfaces to enhance the learning value of system dynamics simulation models. Participants impressed with the learning power of the People Express learning laboratories frequently ask how they can have such a simulator customized for their own company or industry. This case study describes the rapid creation of a simple, yet highly dynamic and descriptive model (with a graphical interface) of a national oil company, and the experimental introduction of that model into an already established new employee training program in that organization.

Observing the Process: Reflections On Issue Selection And Model Conceptualisation In A Case Study Concerning The Dynamics Of Programmer Recruitment
David C. Lane

Abstract: When performing interventions with practising managers, questions arise concerning the approach which should be used to generate and select the issues to study without biasing the process towards a system dynamics framework. This paper describes a project in which care was taken to observe the stages of the process to facilitate reflection on the project’s development. The case involved two managers from an information technology department and evolved into a study of the dynamics of their new programmer recruitment policy. Early use of the ‘magnetic hexagon’ approach allowed articulation of the issues and focussing of interest on one issue. Policy structure diagramming was used to elicit a model and computer implementation and scenario generation followed naturally. The paper closes by recording the insights gained by the clients and by proposing some general lessons on techniques for structuring the early stages of consultancy projects.

Viasa’s Microworld: A Strategic Management Learning Laboratory
Lorenzo Lara- Carrero, Arturo Bencosme, Rodger Farrell, Racquel Benbunan

Abstract: This paper describes work and experience gained by a system dynamics team in developing a microworld to support a strategic management learning laboratory at Venezuela’s international airline Viasa and a computerized case study at IESA. The opportunity for this experience arose from an atmosphere of change produced by Viasa’s transition from state to private ownership. This work is intended to form part of a managerial development effort at Viasa and as a teaching and research tool at our business school.

System Dynamics Analysis, a Prototyping Tool for Production System Design
U. La Roche

Abstract: Streamlining a production process shortening leadtimes and sqeezing inventories and cost are the highlights of any company restructuring. Efficient factory planning is in the end usually good logistic system design. But to master the many concurrent problems of an efficient logistic system design in a company it either takes time to digest all the local improvements or one needs an integrative method to structure these intertwined problems.Applying SDA opens the second method, which consistently proved to be faster and more efficient. This also includes the problem of proper embedding the MRP-system. Analysis of the process-chains of an important machine-tool production including sales and supply is reported as an illustrative exemple.

The Dynamics of Diversity
George H. Litwin, Kathleen Lusk Brooke, T.R. Nelson

Abstract: What organisational decisions actually cause diversity? Does diversity in mix of employees lead to diversity in range of output? This paper puts forward a set of hypotheses regarding the systems that generate (or limit) diversity in organisations. Our client organisation is the British Broadcasting Corporation (BBC), whose stated goal is to provide a broad, diverse range of programming –such diversity being appropriate to the BBC’s very broad and diverse audience. To achieve this goal, the BBC has set forth a human resources strategy of hiring and promoting diverse groups of people. Their premise is that diversity of people, under certain measurable conditions, will lead to diversity of output. Our model allows experimental study of the effects of feedback on the dynamics of diversity. This research is relevant to organisations concerned with diversity, with matching their market composition, or with fostering innovation. Results of recent studies will be available at the conference and by written request.

The System Dynamics Concepts of Model
Manuel Liz, Margarita Vazquez

Abstract: When modeling and simulation in System Dynamics, we can find many different uses of the term “model”. Although these uses are very interrelated among them, and with other uses this term in science, technology and philosophy, they serve to very specific and diverse goals and purposes. This paper tries to sketch a general framework in order to analize that wide variety of uses the term “model” has in System Dynamics. Sometimes, the differences among some of these uses will be so important that more than different uses of a term associated with a single concept, we could speak of different and mutually irreductible concepts. Nevertheless, whether theses uses of the term “model” are associated with a single underlying concept or with different concepts, all of them are perfectly integrated in System Dynamics. Our point is that this is one of the main sources of its great success for making clear our ideas and for managing our actions trought complexity.

An Expert System for Conceiving Company Wide Quality Control Strategies
Julio Macedo, Rafael Ruiz Usano

Abstract: Currently there are three methods for conceiving company wide quality control strategies, the participative approach, the simulation approach and benchmarking approach. All of these methods present shortcomings. This paper presents a new qualitative method based on system dynamics and an expert system that includes this new method. The expert system is applied to conceive the company wide quality control strategy of a manufacturing firm.

R&D Strategies and the Diffusion of Innovations
Frank H. Maier

Abstract: Various factors like price, delivery delays and product quality influence the diffusion of innovations. This paper discusses-among other aspects- the impacts of research and development (R&D) strategies on the technical know- how of a product as a strategic factor. To investigate the interrelations of R&D, market performance of products, pricing and profits and to draw conclusions for corporate strategy, an innovation diffusion model is needed, which represents the underlying problem structure adequately. This paper presents such a model.

 A Stage – Theoretic Approach to Information Systems Planning in Existing Business Entities of Recently Established Market Economies
Robert P. Marble

Abstract: Recent experience with existing businesses in the newly added eastern states of Germany has shown a tendency toward the immediate (and often rash) acquisition of current information systems technology for the support of operations. In many cases, the lack of planning reflected in these actions has led to disappointments and subsequent requests for help. The scenario evinced by these situations is reminiscent of the principles espoused in Richard Nolan’s stage hypothesis for information systems growth (1979). In this paper, possibilities are discussed for better understanding the unique set of circumstances presented by these situations, in light of the Nolan hypothesis, with a system dynamics approach.

New Production Planning Systems: A System Dynamics Perspective
Adolfo Crespo Marquez & Rafael Ruiz Usano

Abstract: This paper describes the evolution of production planning systems under the system dynamics approach. The structure, feedback loops and decision making process are analyzed under different “pull” & ”push” operation management techniques such as order point, base stock, MRP, KANBAN, etc. The study is made in chronological order, with the main objective being pointing out the procedures of controlling the system’s behaviour, arisen from the new production technologies development. Simulation results are presented for several cases.

From Static Picture to a Dynamic Problem Definition
Ali Naghi Mashayekhi

Abstract: Problem definition is the first and the most crucial stage in any System Dynamics study. A good and clearly defined problem is prerequisite to a good System Dynamics modeling. However, the way that a good dynamic problem is defined is subtle, is not well formulated and is not well taught. This paper presents a structured approach to dynamic problem definition that starts from static picture of the real world and turns it into a dynamic problem. The paper argues that most people are familiar and capable to present static picture of the situation of a real world system. The paper uses such a familiar picture as a starting point to define a dynamic problem. The approach is applied to develop a problem definition for a railway company as an example.

A Dynamic Model for Development Planning in an Arid Area
Mohammad T. Mojtahedzadeh

Abstract: Yazd is one of the regions in the central district of Iran, entirely dependent on ground water for its water supplies. In such regions, as economy grows demand for water increases, but a serious economics crisis also appears due to depletion of ground water reserves. In this paper, a System Dynamics model is presented to analyze the interaction between socio-economic development and limited water resources. The model shows how the crisis would occur. The alternative policies is adopted to prevent such a crisis.

Renal Stone Model System Dynamics Approach
Mohammad T. Mojtahedzadeh, Mohammad Kazemeyneen, Hamideh Azizkhan

Abstract: A clearly defined etiology for urinary calculi has not yet been established. In this paper, a primary System Dynamics model is presented to a better understanding the process of renal stone formation. The paper attempts to explain why in most patients who have recurrent formation of calculi, urinary excretion of calcium is normal, and why can not be over emphasized on hydration in the prevention of urinary calculi.

Cross Analysis of Dynamic Modelling of an Economical Energy System and a Dissipative Physical System
J.C Mora, R.S Bes

Abstract: Actual Dissipative Systems are not workable without energy supply and energy dissipation. Among these systems are economical systems as well physical system such as fluidized bed. A System Dynamics Analysis of a simple macro- economical system related to the energy sector of a country shows causal loops including energy supplies. This analysis can applied to a fluidized bed. This system is a classical engineering dynamic system. Due to its complexity it has been highly investigated on the basis of time averaged regimes but a few studies exist about the true dynamical aspect. This is mainly due to the fact that the basic equations are complex. Several length and time scales exist simultaneously. The theoretical equations should comprise the classical hydrodynamic equations for fluid containing solid particles in suspension. The complete set of theoretical equations is for the time being not available. From analogies with the economical systems it is possible to identify causal loops which are not usually considered in the classical modelling of a fluidized bed, i.e. interaction with energy supply. Introducing this phenomena and using a very simple equation it is possible to show that space structuration can occur. Then by using a simplified non-linear hydrodynamic equation a chaotic complex behavior, in agreement with experiments, can be simulated. The analysis of the model shows that one of the origin of the difficulties to use the models lies in the existence of several time and space scales. This kind of analysis is helpful to understand fluctuant behavior of many other systems including economical systems.  

Design of a Learning Environment. The Oil Producers’ Microworld
John D.W Morecroft

Abstract: New gaming software coupled to detail- rich readings (such as case studies and newspaper clippings) promise more effective ways for widespread dissemination of model-based insights. However, gaming- simulators have often been criticized for encouraging superficial thinking aimed solely at ‘beating the computer’ rather than understanding business and social problems.
To avoid the so-called ‘video-game syndrome’ it is necessary to embed a model in a workshop that includes briefing materials and a gaming protocol to encourage reflection, discussion and discovery.
This paper reports on a computer-based learning environment for the oil industry –an oil producers’ microworld. Game players (who need not be familiar with system dynamics) can take the role of different oil producers and create their own industry scenarios for oil price, production, OPEC quotas and crude oil reserves. The paper describes how participants are briefed about the oil industry, systems thinking and the model’s feedback structures. Samples are provided of the gaming interface and model generated scenarios.

A Simulation Analysis for Renovation of the Hierarchical Structure
Michiya Morita, Nobuhide Tanaka

Abstract: The hierarchical structure of pyramidal shape which is adopted by most of relatively large organizations is now the target of renovation to raise the capability of adaptation in changing environments. The objective of this study is to obtain relevant insights for redesigning the structure. A simulation analysis is tried to investigate information processing properties that determine to a great extent the effectiveness of the organization. Several derivatives of the hierarchical structure, which are realistically likely candidates from which appropriate choices would be made, are the targets of the analysis. A set of implications will be provided as the results of the analysis.

 Continuous Models and Discrete Time Series Data
Erling Moxnes

Abstract: We consider cases where reality is best described by a continuous model, and where data are sampled at discrete points in time. Then an exact transformation of the continuous model into a discrete one, or vice versa, is typically very complicated. Simplified transformations might produce great errors if the sampling interval for the time series is approaching natural periods or time constants of the system being modelled. For such problematic cases we discuss implications for a system dynamics, traditional discrete model econometrics, and Bayesian statistical methods.

Cartel Behaviour in Commodity Markets
Erling Moxnes

Abstract: A theory for the behaviour of cartels is advanced. The theory deviates from the received literature on three main points: Cartel behaviour is derived from literature on human behaviour rather than from principles of profit maximization, the theory focuses on commodity markets rather than being general, and it deals with the timing of formation, break down, expansion and dissolution. The theory is stated formally in a simulation model, which seems to replicate well the qualitative behaviour of cartels. Historical accounts of the timing of cartel events lend support to the theory.

Numerical Stimulation of a New Correlation Function for the Climatic Statistical Structure of the Height Dynamic Field
Shing-Chung Onn, Kuang-Horng Wang, Jen-Ko Wei, Tai-Hwa Hor

Abstract: For the long-term period in the low-latitude region of the earth, the statistical structure of the height dynamic field at 500 mb during the winter seasons has been studied successfully by using a new correlation function. {ρ (r)=A (r) *EXP [ B(r) ]} where A( r ) and B( r) are two general polynomials. The best selections of the degrees of these two polynomial can be found in the least –squares sense. The results show that this new mixed-type correlation function can yield more accurate fitting than Gandin’s formula (1963) {ρ ( r )=a * EXP (-b*r **2) }. The height dynamic fields at the regular nest grids are then computed and compared with those obtained from the measured data at irregular observational stations. The troughs of the resulting height dynamic fields can be identified very clearly.

Personnel Planning in Health Care: An Example in the Field Of Rheumatology
Th. J. B. M. Postma, M.T.Smits, S. Terpstra, C.A. Th. Takkenberg

Abstract: This paper describes a methodology for manpower planning in health care. The methodology is applied in the field of rheumatology. This methodology uses the concept of political rationality: different actors with different mental models, goals, languages and power interact in a bargaining process with incomplete and imperfect information. A Group Decision Support Systems approach is advocated where interactive model building stimulates shared meaning and communication. In health care important decisions usually have a multi-level and multi-actor character. A bottom up procedure, starting at the detailed level gives a justification when aggregating to an higher level. Consequently the project was started with discrete event models before applying continuous simulation like system dynamics. Besides the modelling and communication processes the creation of a network of key decision makers in health care applying this approach is seen as a major product.

A Policy Support Model for the Scheduling Transportation Projects
Bambang S. Pujantiyo, Yoshio Hanzawa & Atsushi Fukuda

Abstract: The rapidly growth of trade industries on the developing countries can be predicted that on the near future occurs many problems, especially the problems like as piling up by the goods at the port and passing over of capacity by the trucks at the road. These problems can be solved by the improvement on both a port and a road. However, it is suggested that because the budget constraint these regards can not be conducted at the same time. The scheduling projects strategy which priories the vital projects as the first implementation is the one technique that can be considered. However, to appraise the economic impact of this implementation, an existing trade industries system model is required. This appraisal is an interesting regard as the consideration for the planner in case to decide the better transportation planning. Based on the existing trade industries, this paper proposes a model which can appraise the economic impact of the scheduling transportation projects by using System Dynamics Methodology.

MicroWorlds and Evolutionary Economics
Michael J. Radzicki

Abstract: This paper discusses the use of microworlds in evolutionary economics. A macroeconomic microworld is presented as an example.

An Institutional Dynamics Approach to the Study of Peace and World Order
Michael J. Radzicki, W. Scott Trees

Abstract: Although computer simulation modeling has long been used to study issues in peace and world order, it has not resolved the controversy surrounding peace research. The problem is the lack of a well-defined methodological rudder to guide the modeling process. In this paper, a new methodological approach to the study of peace and world order is proposed, and its merits discussed. This approach is a synthesis or marriage of institutional economics, system dynamics computer simulation modeling, and peace and world order studies.

Jog Your Right Brain (JOG): A Case Study in Knowledge Elicitation and Evaluation
Peter A. Raynolds, Gennie H. Raynolds

Abstract: During the process of system dynamics modelling of organizations, policies or problem, R-mode (so called “right brained”) procedures, such as the JOG exercise, seem especially relevant (1) in the early phases, when an elicitation of ideas, variables, considerations and concepts having possible relevance is undertaken, and (2) during any of the modelling phases, when an unbiased evaluation is desired, perhaps in addition to more traditional: “objective” L- Mode assessments. JOG is described, as it was employed with top and middle managers of a small US hotel chain, in developing a preliminary system dynamics model for a new corporate vision.

Dynamics of the Stabilization Process after Argentine Hyperinflation in 1985
Juan C. Rego

Abstract: During the first years of the 80’s decade, the continual financing of the argentine deficit fiscal, throughout the emision of new money, pushed Argentina to the verge of hyperinflation. In June 1985, the seriousness of such a situation compelled the governing party, the Union Civica Radical, to adopt hard policies of stabilization, afterwards known as Plan Austral. In this article a SD version of a small dynamic model is presented – in Cagan’s tradition (1956), conceived by Fernandez and Mantel (1985)-of the mentioned Argentine stabilization process. Dynamic simulation is used to analyse the macroeconomic behaviour.

Building Learning Organizations: Implementing Organizational Learning Processes, and the Theory of Self-Referential Systems
Rüdiger Reinhardt, Ulrich Schweiker

Abstract: This paper refers to the assumption that the major paradigm of System Dynamics, General Systems Theory, is not able to provide adequate models of organizational learning processes. It is shown that the theory of self –referential systems is able to overcome current theoretical weaknesses: Considering the difference between communication, the basic operation of social systems, and thoughts, the basic operation of psychic systems, a framework for organizational learning is proposed. Consequences for the management of organizations, especially their strategic change resp. the building of learning organizations, are discussed.

Dissipation and Chaos in Foreign Exchange Markets
Beate Reszat

Abstract: Studies of chaos in foreign exchange markets often lack a theoretical underpinning. This paper tries to give some reasons why exchange rate movements may become chaotic. Starting from an assumption about different groups of traders that goes beyond recent models of fundamentalists’ and chartists’ behaviour it argues that, to capture the idea of chaos, foreign exchange markets have to be modelled as a dissipative system and not, as usual, as a closed conservative one. A qualitative system dynamics approach is chosen to demonstrate the complex interaction processes arising.

Group Model Building
George P. Richardson, David F. Andersen, John Rohrbaugh, William Steinhurst

Abstract: Ongoing research in the Rockefeller College of Public Affairs and policy is focusing on strategies for efficient and effective model building in groups. The intent is to involve a relatively large client group in the business of model formulation, not just conceptualization. Recent projects have explored strategies for accelerated group model building in the context of two public policy problem areas: the burgeoning cost and caseload of foster care in New York State, and recent unexplained increases in Medicaid costs in the state of Vermont.
Five roles appear to be essential to support effective group model building efforts. We term the five roles the facilitator, the content coach, the process coach, the recorder, and the gatekeeper. This article identifies the five roles, briefly overviews the two problem areas, sketches the design of the group model building efforts, outlines the apparent results, and hypothesizes principles and strategies to guide future group modeling efforts.

Estimating the Parameters of an AIDS Spread Model Using Optimisation Software: Results for Two Countries Compared
Carole Roberts, Brian Dangerfield

Abstract: Few real life case study examples exist concerning optimisation in system dynamics models. This study reports an attempt to estimate relevant parameters of an AIDS spread model in order to check whether the chosen model structure can be separately parameterised and thereby explain the course of the epidemic for more than one country. The UK and USA are the two countries selected and the parameter values derived are reported for each. The values obtained are not inconsistent with emerging knowledge about the epidemic and the subsequent optimised projections reveal that the peak of the homosexual epidemic has been or is about to be reached in both countries.

 Does System-Dynamics Limit The Growth Of System-Dynamics?
A. De Rooij

Abstract: The paper describes from a client point of view some experiences with system-dynamics during the first year of Nostradamus. Nostradamus is a project, which aims at simulating the senior management of a large Dutch governmental organization with an one action orientated engeneers approach to adopt a more outwardly-orientated, creative and flexible attitude. In the beginning of the project the use of system-dynamics was intended as a central guiding aid in the proces of organizational growth. The intended use proved considerably more extensive than the actual use. Insofar this regression is attributable to system-dynamics we, as a client of system-dynamics, see in this regression a possible challenge for system-dynamics.
We think system-dynamics could have been a more central supporting aid in Nostradamus if we would have found well-documented experience with system-dynamics in comparable situations. We suggest the system-dynamics-society to develop certain activities in order to stimulate demand and to better link up demand and supply in the area of systems-thinking.

Chaos out of Stiff Models
Khalid Saeed, N.L. Bach

Abstract: While nonlinear combinations of multiple modes existing in complex oscillatory systems may generate chaotic behavior in real systems, the studies of chaos attempted in system dynamics have often resorted to forcing simplistic models of systems to chaos. This paper illustrates how chaotic modes have been constructed through the creation of mis-specifications and anomalies in the model structure and parameters. This process has not only reduced the models to artifacts with little relevance to problem solving but has also invariably introduced a stiff structure that is susceptible to considerable building up error as numerical integration methods are used with long simulation times. The paper concludes that a model must qualify as an empirically valid system by meeting the requirements of the normal system dynamics practice if the chaotic modes it generates are to be of practical value.

Slicing a Complex Problem for System Dynamics Modelling
Khalid Saeed

Abstract: Since formal modelling requires having a model boundary encompassing finite complexity, so deductive logic is possible, complex problems must be partitioned into simpler parts before being analysed. There are many ways to slice a complex problem but not all create partitions that keep together processes contributing to effective policy design. This paper explore ways in which a complex problem may be appropriately sliced so the models of the partitions can serve as effective tools for policy design.

Implementing Organizational Learning Processes vs. Top Down Approaches
Ulrich Schweiker, Rüdiger Reinhardt

Abstract: This paper describes a case study of applying organizational learning principles to the strategic change of a large German automotive company which seems to be successful alternative to the usual top-down approaches. Different models of implementing change processes are discussed, and their adequacies are assessed regarding to the degree of supporting self-transformational processes within the organizational.

System Dynamics for Budget Planning Evaluation in Public Environments
Habib Sedehi

Abstract: To the date, Budget Plan definition in Italian public companies is approached with insufficient deepness. We believe this is common to other countries too.
Indeed, most public organizations develop the Budget Plan basing themselves only upon the available data and not upon knowledge acquired in years of experience. Balance sheet data are therefore obtained simply adding to the previous information, an amount estabilished, for example, on the expected inflation rate.
This approach although “trivial” supports the budget responsible, because during the budget presentation, very few elements can be effectively criticized.
It is commonly accepted that also public companies find themselves in turbulent environments. This is due to both the increased number of endogenous variables, and to the complexity of exogenous parameters. Therefore the Budget Plan definition becomes always more critical, and consequential difficulty of its evaluation assumes relevant importance.
The paper describes an experiment carried out by an Italian Public company which is adopting a dynamic economic- financial model for both, Budget Plan definition and for its evaluation.
The model is based upon System Dynamics approach and evaluates a series of scenarios providing support to the budget definition responsibles in taking strategic policy decisions, and better “explaining” the effects of decisions undertaken.

“Open” Systems, Closed Minds
John A. Seeger

Abstract: System Dynamics has not achieved widespread recognition as a paradigm of substance in the business-related disciplines of Strategic Management, Organization Behavior, Organization Theory, or Operations Management. One reason for its slow acceptance by academicians in these fields and related social sciences may lie in the specialized meanings and usages attached to common words by the System Dynamics lexicon. Words such as “open,” “closed,” “feedback,” and “structure” -- used differently than established scientists might expect --may create perceptions that System Dynamicists simply don’t understand systems theory. Writers in the field need pay special attention to the semantic implications of their presentation.

You Can’t Get There from Here: Why Systems Thinking is Inseparable from Learning Organizations
Peter M. Senge

Abstract: Organizational learning is intrinsically systemic, because it deals with changes in thinking and acting not only in individuals, or in teams, but organization-wide. Our ability to understand and improve organizational learning will depend on having an operational systems framework, which can both sharpen theoretical insights and address practical management concerns. Building on past work in organizational learning and system dynamics, the new Center for Organizational Learning at MIT is attempting to develop a rigorous foundation of systems principles and methods so that current interest in organizational learning and “ learning organizations” can lead to significant advances in management theory and practice.

Innovation Effect on the Model for Dental Diseases
Tosiro Shimada, Hirokazu Mizushima, Takahiro Kojima, Koichiro Okumura

Abstract: We gave a report on the model for dental diseases at the 1987 System Dynamics Conference.
The model consists of 4 sectors: demography, cavities, pyorrhea and baby teeth. The demographic sector covered population of 5 three-year age groups under 14 years of age and 13 five-year age groups above 15 years of age. The cavities sectors and pyorrhea sector were composed of population of five-years age groups, on the other hand, the baby teeth sector used population of three-year age groups.
From the total number of defective teeth, total dental costs in Japan were calculated annually from 1963 and projected to 2025.
We added to this model a new level variable which is technology (rate variables and multipliers) in order to demonstrate to the effect of technology on the other level variables. New simulation results will be reported at the International System Dynamics Conference this year.

Catastrophic Behaviour in System Dynamics Model for Blood Bank Management
Ali K. Shoukath, N. Ramaswamy

Abstract: This paper explores the advantages of System Dynamics as an enquiry method for analysis of blood bank management Systems which exhibit far reaching social implications. Causal loop diagrams are developed connecting various system components. The integration of individual causal loops is presented in the form of an influence diagram representing the ‘dynamics’ of a blood bank. Simulation model is built on the basis of causal loop diagrams. The system response exogenous disturbances or policy changes are analyzed. The catastrophe model of blood bank system is developed and the parameters forming the control surface and behaviour surface are correlated with those of the System Dynamics model.

 Piecewise Linear Analysis of an Influence Diagram
M. Toro, J.J. Arrabal, L.Romero

Abstract: To each causal diagram, and the structure that it represents, a dynamical system can be associated. From its qualitative analysis, the behaviours associated to the structure can be deduced. This paper introduces a piecewise linear dynamical system associated to a causal diagram. Some interesting results on the qualitative behaviour of the system can be obtained from this dynamical system. In this paper a method is proposed to implement automatically the construction of a piecewise linear dynamical system to each causal diagram, the study of its equilibria and its stability. This allows us to obtain, automatically, the behaviour modes associated to a causal diagram.

Integration of System Dynamics and Rule Based Reasoning Mechanism
Yi-Ming Tu, Naeyi Shiao

Abstract: After providing a framework for integration of System Dynamics and Expert Systems, this paper builds theoretical bases to integrate three main features of rule based reasoning mechanism into conventional System Dynamic models. Then we start to modify the System Dynamics modeling tools to adopt the integrated features. To illustrate, we demonstrate a prototype for integrated theories above.

A Study on the System Dynamics Modeling of Business Technology Management Decision Support System
Yi-Ming Tu, Ching-Yee Young

Abstract: This paper is a research on the integration of system dynamics, protfolio and scenarios. The prototyping is used in developing the system dynamics model which is focused on the activities of business technology management. At here, we will discuss about the implementation and some simulation results of the BTMDSS model.


The Spanish Research and Development System: a Model for the Equilibrium Conditions Between the Offer and the Demand of New Researchers
Margarita Vázquez, Miguel A. Quintanilla & Bruno Maltrás

Abstract: The System Dynamics model which we are presenting here has been prepared with the purpose of examining the relations between the number of existing grant-holders in Spain and the number of researchers in active service in the sectors of Higher Education, Business and Public Research Organisms. The aim is to examine these variables in order to analyze the conditions of balance between the offer of potnential researchers trained while holding grants and the demand for new researchers trained while holding grants and demand for new researchers on the part of the science and technology system in Spain.

An Artificial Intelligence Approach to Socio- Economic Simulation: Application to the Economic Integration of Europe
John P. Walter, Carol Lopilato

Abstract: It is often difficult to accommodate judgmental information together with quantitative data in an economic model. One approach is to embed human decision-makers as role players within a simulation exercise. Their behavior is recorded by the computer system, becoming a part of the modeling process. We consider some of the human interface requirements to accomplish this integration, a methodology using supervised linkage of spreadsheet with DYNAMO models, and an example of its application toward modeling the 1992 economic unification of Europe.

 A Preliminary Experiment on Examining Thinking in a Meta-Dynamic Decision Making Environment
Sy-Feng Wang, Showing H. Young

Abstract: For system dynamicists, it is important to understand how humanbeing solving problems and making decision in the real world. However, how humanbeing solving problems and making decision in the dynamic causal feedback environment are still not well understood both in psychology and in system dynamics. This paper is a preliminary study which attempts to deal with issues of problem solving, thinking strategy and pilot knowledge in a so called meta-dynamic decision making environment. The task was a computerized beer game modified from the board type beer game. Experiment results showed that there existed a goal-strategy dynamics in human problem solving. The thinking strategy contained both “structure-understanding” and “non-structure- understanding”. The pattern’s pilot knowledge from previous trials had influence on some subjects’ decision making. It’s possible influences in real world are discussed. Finally, from experiment results, two general problem solving processes ( the servomechanism process and cybernetic process) are proposed. Implications for system dynamics management flight simulator and systems thinking are also discussed.

Inner Mechanism of Corporations and How to Incite Their Vigour
Qifan Wang , Xu Bo

Abstract: In order to understand the inner mechanism of corporations and incite their vigour, we create a model which provides us with the study of the development of new product R&D and advanced technology absorption, product life period, market promotion, the adjustment of the length of working time, productivity and hiring or firing of workforces.

The Study of the Raw Materials Industry Development in China by Using a Combined Approach of Qualitative & Quantitative Methods
Qifan Wang, Xiaobo Zhang

Abstract: China’s economy had got its newest growth during the “No. 6 Five Year Plan” period, however, the problem of unbalanced production structure in China’s economy system turned to be more obvious and serious, reflected by the fact that the base economic production, defined as energy production, transportation and raw materials production faced a bigger lag in satisfying the social demand. Raw materials industry, including ferrous metal industry, nonferrous metal industry, chemical industry, building materials industry and forest industry showed even more serious tighteness in meeting the demand. The paper tackles with such a compliacated economy system by combining the qualitative method and quantitative methods. We believes that such a combined approach is effective in dealing with problems associated with a planned, but more and more market orientated economy, such as the economy system of China.

System Diagnosis & Evaluation and Study of Management Techniques & Methods Application in Corporations
Qifan Wang, Zheng Shaolian, Fu Xinhua

Abstract: It is important to apply modern management methods and means to raise the productivity in modern era. But there isn’t powerful and systematic tool, we developed a tool and a series model which based on S.D. theory to diagnose the corporation structure and evaluate the effect of management methods application in corporation.

Primary Factors Dominating the Development & Changes of a Metropolis
Qifan Wang, Jin Yin

Abstract: City grew, stagnated and then declined in the past two centuries. This is a general pattern in history in our world. Clearly, there must have been some powerful factors at work. This paper tries to make an explanation of such phenomena.
Primary forces behind economies of agglomeration and urbanization and behind diseconomies of agglomeration are explained and revealed.  
Furthermore, in order to avoid such passage, some principles and ways are explored by system dynamic theory and modeling.
The development pattern of a metropolis is closely related to its inner dynamic structure. Policymakers should be well informed and adjust the structures accordingly.
Developing new zones adjacent to a metropolis is an effective way to pump the new life into the city. Meanwhile, the coordination and equilibrium between the new and old areas should be appropriately arranged and incorporated.
The paper makes a study of the macro relationship among the flows of population, manpower, raw materials, funds and information between two zones and the impact of transportation problem on the whole city.
Taking an example of Shanghai, a megalopolis, a series of policies for rebuilding up the functions of the city are suggested.

Dominant Structure Analysis: Another Approach
Xiaoting Wang, Limin Song

Abstract: In this paper, we put forth another approach to the dominant structure analysis, which we call parameter elasticity method. This method is based on the law of differentiability of solution with respect to parameter. It concerns itself with the dominant structure that contributes most to a particular behavior or behavior change. By applying this law, we develop the new method and new qualitative indexes to determine the dominant structure of a system.
This new method has some advantages. One is that it can be applied directly to nonlinear systems without linearization. Another is that it can be accomplished within DYNAMO. In some condition, it may be a good guide to model simplification.

Model Management by Means of Computer-Based Information Systems in Managerial Contexts
Fons Wijnhoven

Abstract: Models and computer-based information systems frequently meet resistance and suspicion by management, because they often do not meet the knowledge demands of management in a company. Solving this problem requires approaching modelling and information systems development as a management discipline. This discipline involves the activities of developing, maintaining, effective using, and conserving of models and systems. The paper concludes with a normative view of the relation between management levels and model management activities, and considers the possible use of computer-based information systems for effective model management.

Modeling the Dynamics of Scientific Revolutions
Jason Wittenberg, John D. Sterman

Abstract: Scholars have long attempted to understand the nature of scientific change. Is science characterized by the steady application of universally-accepted norms of logical inquiry, or is it an enterprise that periodically reconstructs itself from new fundamentals? One of the best-known examples of the latter view is Thomas S. Kuhn’s Structure of Scientific Revolutions. Kuhn argues that new theories replace old ones rather than build upon them, and in the process revolutionize science’s very image of itself (1962:84-85). Scientific progress is seen not as a steady accumulation of truths, but “as succession of tradition-bound periods punctuated by non-cumulative breaks” ( Kuhn 1970:208).
Kuhn’s theory has had enormous influence in the social sciences, but it is also of enduring interest in the physical sciences (Barnes 1982; Lightman and Gingerich 1992). The notion of paradigm has, rightly or wrongly, been used to legitimate alternative methods of research as well as to delegitimate dominant modes of inquiry. Nonetheless, although ‘paradigm competition’ has become well-established in the academic lexicon, little is known about what such competition actually entails. How do internal and contextual forces interact to shape and constrain the development of new paradigms? Why do some paradigms last for centuries while others quickly wither?

Application of System Dynamics to the Study of a Religious Experience
Arlen Wolpert

Abstract: This paper informs the scientific and religious communities about a breakthrough in the study of religion: System Dynamics is being used to model and simulate the experience of a mystic during the time when he traversed the dramatic road to mystical union. The paper briefly presents how his modelling task is being approached and some of the key insights being made by focusing on the dynamics of the important dark night of the soul phase which preceeds mystical union. This gives a synopsis of the essence of my book manuscript, A Meditation of Mystical Union.

Enhancing the Learning Effects of Dynamic Decision Game on Systems Thinking-An Experimental Study
Showing H. Young, Jenshou Yang, Sy Feng Wang

Abstract: This study attempts to examine the effectiveness of our proposed learning environment for systems thinking, and the effects of different kinds of task’s screen design for the interactive dynamic decision game to enhancing the learning effect. Two experiments were implemented for the two investigation purposes. In the first experiment, we found that the proposed learning environment was viable for learning resulting from the positive effects of challenging goal setting and causal feedback on the increase of participants’ motivation and understanding of the game. In the second experiment, the effects of causal feedback was examined directly by the comparisons of three different kinds of task’s screen design including causal, hierarchical, and department types. We found causal type of screen design induced more analytical cognitive type just as the prediction of the inducement principle (Hammond,1998) and outperformed the other two screen design as predicted by the correspondence-accuracy principle (Hammond,1998). But the effect of causal type on performance improvement was not significant. The insignificant effect of causal relations task’s screen design on performance improvement revealed that the learning of systems thinking relied mainly on “by doing” or “by failure”, not on “by knowing”. In conclusion, we suggested that the design of dynamic decision game aided systems thinking learning environment should take the motivation factor into account to lead participants make more efforts to learn systems thinking by doing through failures. Although causal relations type could not improve learning effect significantly, however, it induced corresponding causal analytical cognitive type that is beneficial to the learning of systems thinking.

A Study of Energy Supply and Demand System on Village Level
Fang Zhen

Abstract: Firstly, the network diagram of energy supply and demand system was drawn then a linear optimized model of integrated energy with economy, the target of which is the least cost of energy supply, was developed to optimized the best energy supply structure. Secondly, according to above results, an SD model was built up to predict and to study the developmental changes of the system from the long point of view. Finally, the two models combined was applied to a village with a population of 800 people in the North China Plain and results of computer simulation showed on the base year (1990), if energy transformed devices were invested properly, the cost of energy supply system will be lowest on the condition of meeting the energy demand, at the same time it can save energy, and the energy supply is sufficient. But, with the development of economy and the upgrading of people’s living level, the energy supply will become an important factor for rural economy development. Several alternative plans designed to simulate the system gave different influences of energy to economy.


1992 Proceedings Supplement

Central Europe: From Central Command Economies to Free Markets
Thierry F.D. Chevalley

Abstract: Central Europe faces a decade of restructuring due to the move from centrally planned economies to free markets. Its economic evolution into the current structure of resource utilization and output composition is traced by using a dynamic model. Major production factors and their interaction are simulated to quantify the issues of the transition: these include the transformation of traditional industries and their reorientation towards services, the parallel transfer of ownership of assets and financial intermediaries, restructuring the labor pool, demographic changes and energy efficiency.

A drop in economic output and living standards precedes the recovery from devastations caused by 40 years of central government planning. The time delays and cost of the transition lead to structural unemployment, changed participation in the labor force and migration in the short term. Active Western involvement in trade, technology transfer, retraining of human resources and investment is required for any economic assistance to be effective in generating growth and slowing migration.

Market Structures, Trading Strategies, and Feedback: Rethinking Neoclassical Price Discovery
Kevin O’Neill

Abstract: This paper focuses on the financial markets crash of October 1987 to examine the effects of trading strategies and other institutional structures on price behavior during this period. It presents a system dynamics model which looks at average, aggregate stock prices. It specifies connections among various trading sites and techniques. In particular, it examines the influence of financial and technological innovations such as stock-index futures and other derivative instruments and high speed order execution and transaction systems on market performance. A major conclusion is that the financial markets are characterized by complex structures only partially economic in nature. This suggests that the interplay between market pricing behavior and institutional behavioral reactions are more complex than is currently believed.

Real-Time Tragedies: A Simulated “Commons Learning Laboratory”
Kevin O’Neill

Abstract: “Commons-type” computer simulations are increasingly popular tools for helping students grasp the underlying trap of individual versus collective rational action in situations of joint ownership and finite resources. Historically, these simulations have been designed on mainframe or mini computers with site limited capacity for either visual or auditory feedback. This paper presents a preliminary commons-type game designed for use with the emerging local extended-area MacIntosh based networks. This paper also tests whether providing diagrammatic and verbal descriptions of the inherent resource and behavioral feedbacks enables players to avoid the fundamental commons trap: Short-term individually rational actions which result in collectively irrational consequences.

Pansystems Theory and Automatic Causality Reasoning in System Dynamics
Zhang Qinling, Zhang Baoping

Abstract: Researchers for complex systems become more and more important in modern science. System dynamics has done its significant work for the integration of System Theory and Computer Science in this field. Each dynamic system forms a complex causality network. Now we can use the panweighted network in Pansystems Theory for the dynamic system modeling, and further perform the automatic reasoning on this model. This new ideal may be developed into a deep seated issue in AI. In this article, the method of both modeling and automatic reasoning on a panweighted network  in dynamic systems will be introducted together with a simple and typical example in System dynamics. The further extention of this new method will be discussed in other articles.

Risk Management in Complex Projects
Henry Birdseye Weil, William J. Dalton

Abstract: This paper describes the use of System Dynamics models to manage the very substantial risks associated with complex design, development and production projects. The authors present a systematic approach to controlling the risks associated with a project’s cost, schedule and technical performance.

The steps in the this process include:(a) simulation of an appropriate “ancestor” project to illuminate sources of performance uncertainties and variances;(b) establishment of a baseline projection for the project of current interest;(c) simulation analyses to identify the sensitivity of the project’s performance to various contingencies( e.g. design changes, resource shortages, changes in government regulations, various technical problems, problems with subcontractors, delays in other interdependent projects); (d) analysis of various “hedging” and “insurance “ strategies for reducing the project’s vulnerability and (e) planning responses to contingencies for which risk avoidance strategies are not practical.

A hypothetical case is used to illustrate the approach. It includes simulation analyses that highlight the interconnectedness of various types of risks and the tradeoffs among: (a) project performance objectives;(b) project management policies; and (c) project risks.

last updated by NG on 11/5/08

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