Abstract
This chapter aims to explain system dynamics approach. System dynamics approach was developed by Jay Forrester from MIT during the 1950s to analyze especially the complex behavior in administration with computer simulation in social sciences. System dynamics is a form of systems approach as a methodology to understand the dynamic behavior of complex systems. The basis of system dynamics is to understand how system structures cause system behavior and system events. System dynamics deals with how things change over time. Almost all are interested in how the past formed the present moment and how today's actions determine the future.
TopSystem Dynamics
System dynamics deals with how things change over time. Almost all are interested in how the past formed the present moment and how today's actions determine the future (Forrester, 1995: 16).
System dynamics is designed to model, analyze and improve socio-economic and administrative systems using a feedback perspective. Dynamic structured administrative problems are modeled by mathematical equations and using computer software. Dynamic constructions of model variables are obtained using computer simulations (Forrester 1962; Ford 1999; Sterman 2000; Barlas 2008).
Key Terms in this Chapter
Stocks: The present values of the variables that are formed by the accumulated difference between the inflow and outflow.
System Dynamics: The basis of system dynamics is to understand how system structures cause system behavior and system events.
Information Flow: Creation, control and distribution of information is the most significant task of business management. It might be difficult to model the information properly in the business process.
Information Delay: They are usually caused by the transfer of information and the delay in the process of taking an action after the information is received. Information delays could occur in vertical hierarchical administrations.
System Dynamic Language: This language consists of four components: stocks, flows, decision functions, and information flow.
Material Flow: It includes stocks and flow rates of physical goods such as raw materials, inventories in the process or finished goods.
Material Delays: In this structure, the material moves forward from the beginning to the end of the pipeline without any change during a period of time, similar to a water running through a pipeline.
Decision Functions: States of the policy that determines how to convert available information in stock into a decision.
Delays: A characteristic of dynamic systems and affect both material and information flow.
Flow: It is defined as the increase or decrease in the unit time interval in stocks and denoted by f ( t ).