System Dynamics

Understanding system
behavior by identifying
system structure
Dennis T. Beng Hui, De La Salle
University-Manila
Some Phrases to Ponder..
„ Experience is an expensive school –
Benjamin Franklin
„ Experience is something you get after
you need it – anon

Dennis T. Beng Hui, De La Salle

University-Manila
What is a System?
A collection of
parts organized for
a purpose.
Dennis T. Beng Hui, De La Salle
University-Manila
 Why does a System Fail?
„ It fails to achieve its purpose.
„ The parts are poorly designed or poorly
connected.
„ It is knocked off course because of external
shock.
„ It is inherently incapable of meeting its purpose
or it attempts to adjust to changes.
„ Its policies are badly designed.

Dennis T. Beng Hui, De La Salle

University-Manila
 Linear Thinking of Events

Information Action Consequences

Dennis T. Beng Hui, De La Salle

University-Manila
Dynamic Behavior of a
System
Delay in State

Information

Consequences

Delay in Knowledge

Delay choice

Action
Dennis T. Beng Hui, De La Salle
University-Manila
Critical Elements in a Dynamic
Behavior
„ Delay - time lags or reaction time
of the decision with respect to its
effect on the system
„ Amplification - when an action
turned out to be more forceful than
what it was intended

Dennis T. Beng Hui, De La Salle

University-Manila
 History of SD
„ System Dynamics was originally
developed in the 1950's and 1960's
at MIT by Jay Forrester
„ An Electrical Engineer who invented the
random-access magnetic core memory in digital
computers.
„ Applied his background in computer sciences
and engineering to the development of
computer modeling and analysis of social
systems.
„ The SD methodology was based on ideas of
feedback, such as encountered in electrical and
mechanical control systems.
Dennis T. Beng Hui, De La Salle
University-Manila
 History of SD
„ He was also the founder of
MIT System Dynamics group.
He directed the System Dynamics
Program in the Sloan School until 1989
„ SD was developed to evaluate how
alternative policies affect growth,
stability, fluctuation, and changing
behavior in corporations, cities, and
countries.
„ http://www.sis.pitt.edu/~mbsclass/hall_of_fame/forres.htm
Dennis T. Beng Hui, De La Salle
University-Manila
 What is System Dynamics
„ It is the investigation of information-
feedback characteristics of managed
systems.
„ The use of models for the design of
improved organizational form and
guiding policy.

- JayDennis
Forrester (Founder
T. Beng Hui, De La Salle
of SD)
University-Manila
 What is System Dynamics (SD)?
„ Deals with the time-dependent behavior of
managed systems.
„ Aims to describe the system and understand it.
(Focuses on patterns of behavior not on
events).
„ Apply qualitative and quantitative models on
how information feedback govern its behavior.
„ Designing robust information feedback
structures and control policies through
simulation and optimization.
Dennis T. Beng Hui, De La Salle
University-Manila
SD Approach by R.G. Coyle
„ Problem recognition
„ Problem understanding and system
description
„ Qualitative analysis
„ Simulation modeling and testing
„ Policy design and testing

Dennis T. Beng Hui, De La Salle

University-Manila
SD Approach by Richardson
and Pugh
„ Problem identification and definition
„ System conceptualization
„ Model formulation
„ Analysis of model behavior
„ Model evaluation
„ Policy analysis
„ Model use or implementation
Dennis T. Beng Hui, De La Salle
University-Manila
 Characteristics of a Messy Problems
(Or why are problems messy?)
„ Dynamic – “all is change”
„ Tightly coupled – “you can’t do just one
thing”
„ Governed by feedback – “our decisions alter
the state of the world”
„ Nonlinear – “effects are rarely proportional”
„ History-dependent – “you cannot unscramble
you eggs”
Dennis T. Beng Hui, De La Salle
University-Manila
 Characteristics of a Messy Problems
(Or why are problems messy)
„ Self organizing – “dynamics arise from internal
structure”
„ Adaptive – “people change over time”
„ Counterintuitive – “too focused on symptoms of
difficulty rather than the underlying cause”
„ Policy resistant – “many obvious solutions fail or
worsen the situation”
„ Characterized by trade-off – “high leverage policies
cause worst to better behavior, while low leverage
policies result to temporary improvement before
getting worse” Dennis T. Beng Hui, De La Salle
University-Manila
Elements of a Dynamic
Problem
„ Dynamic behavior of important
variables – identify and graph those
variables in the system that are the
symptoms of the problems we wish
to study.
„ Time horizon – period of time over
which the problem plays itself out.

Dennis T. Beng Hui, De La Salle

University-Manila
Elements of a Dynamic
Problem
„ The reference behavior mode –
patterns over time that will be
referred to again and again.
„ Thinking in terms of graphs over
time – looking for long-term dynamic
consequences. Use graphs to
describe, define, and analyze a
problem.
Dennis T. Beng Hui, De La Salle
University-Manila
Example of a problem
statement
„ There is a an exponential growth of
people in Metro Manila from 1900 –
2000 which can lead to urban decay.
„ There is a recurring pattern on the
occurrence of Dengue Fever among
young children (1 to 10 years old) in
Tondo between 1990 to 2000 which led
to child deaths.
Dennis T. Beng Hui, De La Salle
University-Manila
Barriers to Learning
„ Dynamic complexity
„ Limited information
„ Confounding variables and ambiguity
„ Bounded rationality and the misperceptions of
feedback
„ Flawed cognitive map
„ Erroneous inferences about dynamics
„ Unjustified reasoning (judgmental errors and bias)
„ Defensive routines and interpersonal impediments to
to learning
„ Implementation failure
Dennis T. Beng Hui, De La Salle
University-Manila
Watson Card Puzzle
You are shown 4 cards. Each card has a
letter on one side and a number on the
other side. What is the smallest number
of cards you should turn over to test the
rule that cards with vowels on one side
have even numbers on the reverse?
Which are they?

Dennis T. Beng Hui, De La Salle

University-Manila
Watson Card Puzzle

E K 4 7
Dennis T. Beng Hui, De La Salle
University-Manila
 Questions
„ What are the important symptom variables?
„ What is the time horizon of your problem?
„ What reference behavior mode you expect to
see? (What is, what should, what you think is,
what could)
„ What are the long term dynamic consequences
of the problem?

Dennis T. Beng Hui, De La Salle

University-Manila
 Group work
Identify the problem by answering its 4
elements.
„Construction of government projects.

„Population of the Philippines.

„Traffic congestion in Edsa.

„Garbage collection in Baclaran market.

„Corruption in the government.

Dennis T. Beng Hui, De La Salle

University-Manila
 Group work
Identify the problem by answering its 4
elements.
„Dieting

„Addiction

„Population of the World

„Use of Credit Card

„Salary/Wage Increase

Dennis T. Beng Hui, De La Salle

University-Manila
Individual Work
„ Electricity
„ Cum GPA
„ National Population
„ Imported product

Dennis T. Beng Hui, De La Salle

University-Manila