IE604 System Dynamics Modeling & Analysis Introduction Jayendran Venkateswaran IEOR, IIT Bombay
A systems perspective Reactive Low Events and Decisions Leverage Adaptive Patterns of Behavior Generative High System Structure Leverage Source: Lecture notes on An Introduction to System Dynamics by George Richardson, University of Albany IEOR, IIT Bombay Jayendran Venkateswaran
How have we been ‘solving’ problems? p Open Loop Thinking Identify Evaluate Select Gather Data Implement Problem Alternatives Solution p Event oriented view of solving problems Goal Problem Decision Result Situation IEOR, IIT Bombay Jayendran Venkateswaran
Source: Lecture notes on Introduction to System Dynamics by John Sterman, MIT IEOR, IIT Bombay Jayendran Venkateswaran
Source: Lecture notes on Introduction to System Dynamics by John Sterman, MIT IEOR, IIT Bombay Jayendran Venkateswaran
Source: Lecture notes on Introduction to System Dynamics by John Sterman, MIT IEOR, IIT Bombay Jayendran Venkateswaran
Why does this happen? p Short term focus p Delays p Feedback p Unintended consequences p Unanticipated consequences n “Not my fault!” p Counter-intuitive behavior p Policy resistance IEOR, IIT Bombay Jayendran Venkateswaran
Systems thinking p Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime n A popular Chinese proverb p Is this adequate? Source: Systems Thinking, Bowman et al., Oxfam (2015) IEOR, IIT Bombay Jayendran Venkateswaran
Moving towards a systems view Decisions Goals "Side" Effect State of the System More "Side" Effects Goal of Other Agents Action of Others IEOR, IIT Bombay Jayendran Venkateswaran
Moving towards a systems view Decisions Goals "Side" Effect State of the System More "Side" Effects Goal of Other Agents Action of Others IEOR, IIT Bombay Jayendran Venkateswaran
Moving towards a systems view Decisions Goals "Side" Effect State of the System More "Side" Effects Goal of Other Agents Action of Others IEOR, IIT Bombay Jayendran Venkateswaran
Moving towards a systems view Decisions Goals "Side" Effect State of the System More "Side" Effects Goal of Other Agents Action of Others IEOR, IIT Bombay Jayendran Venkateswaran
Moving towards a systems view Decisions Goals "Side" Effect State of the System More "Side" Effects Goal of Other Agents Action of Others IEOR, IIT Bombay Jayendran Venkateswaran
How do we do Systems Thinking ? p Dynamics thinking (graphs over time) p Causal thinking (feedback loops) p Stock-and-Flow thinking (accumulations) p Thinking endogenously (system as cause) These characterize System Dynamics Approach Source: Lecture notes on An Introduction to System Dynamics by George Richardson, University of Albany IEOR, IIT Bombay Jayendran Venkateswaran
India’s car production (2008-2018) IEOR, IIT Bombay Jayendran Venkateswaran
Example causal loop diagram + + Rat Death Rate Birth Rate Population - - + + Population Infant Area Mortality Density - + IEOR, IIT Bombay Jayendran Venkateswaran
Stock-Flow model of Epidemics Recovered Infectious Susceptible Population population population (R) Recovery (S) Infection Rate (I) Rate (RR) (IR) Average duration of infectivity (d) Contact Rate (c) Infectivity (i) Total Population (N) IEOR, IIT Bombay Jayendran Venkateswaran
System Dynamics Methodology p System Dynamics Methodology is modeling technique to frame, understand, and discuss complex issues and problems. n Focus on behavior of the system n System boundaries and variables n Inter-relation between variables n Learn from the model development process n Identify and use measurable variables n Iterative model development process p Build, study, simulate, observe, learn and improve • System Dynamics Methodology IEOR, IIT Bombay Jayendran Venkateswaran
What we are going to do in this course p Learn System Dynamics methodology n Causal Loop Diagram n Stock Flow diagram p To elicit mental models of business, social, economic and environmental systems n Expand mental models by explicitly accounting for feedback and delays p Test and improve model using computer simulation p Analyze the model and simulation results correctly IEOR, IIT Bombay Jayendran Venkateswaran
Textbook and references p John Sterman, Business Dynamics: Systems Thinking and Modeling for a Complex World , Irwin/McGraw-Hill (2000). p Craig W. Kirkwood, S ystem Dynamics: A Quick Introduction , Arizona State University (1998) [ Available online at: http://www.public.asu.edu/~kirkwood/sysdy n/SDIntro/SDIntro.htm ] p Others reading material as provided/ indicated in class p Computer Usage: Vensim, Python, R IEOR, IIT Bombay Jayendran Venkateswaran
Course Assessment (TBD) p Exams p Quizzes p Assignments p Project/ Presentation p Others p Audit students must have sufficient performance to obtain a CC & should maintain sufficient attendance IEOR, IIT Bombay Jayendran Venkateswaran
Points to Note p It is assumed that you are intelligent, capable and willing to learn. n Ask question any time during the lectures p Do attend the lectures n You may find it useful n Instructor (me!) will be happy to see a full class n You may actually learn something p Be on time p Moodle used for announcements & interactions. p Lectures (M 10:35 – 11:30, T 11:35-12:30, Th: 8:30-9:25) n On Tuesdays we may go up to 1pm n On Thursdays we may start a little early, say 8:15am (esp. for tests) n I will announce any such updates in advance. IEOR, IIT Bombay Jayendran Venkateswaran
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