| Preface | vii |
Part I | Perspective and Process | 1 |
1 | Learning in and about Complex Systems | 3 |
1.1 | Introduction | 3 |
1.2 | Learning Is a Feedback Process | 14 |
1.3 | Barriers to Learning | 19 |
1.4 | Requirements for Successful Learning in Complex Systems | 33 |
1.5 | Summary | 39 |
2 | System Dynamics in Action | 41 |
2.1 | Applications of System Dynamics | 41 |
2.2 | Automobile Leasing Strategy: Gone Today, Here Tomorrow | 42 |
2.3 | On Time and Under Budget: The Dynamics of Project Management | 55 |
2.4 | Playing the Maintenance Game | 66 |
2.5 | Summary: Principles for Successful Use of System Dynamics | 79 |
3 | The Modeling Process | 83 |
3.1 | The Purpose of Modeling: Managers as Organization Designers | 84 |
3.2 | The Client and the Modeler | 84 |
3.3 | Steps of the Modeling Process | 85 |
3.4 | Modeling Is Iterative | 87 |
3.5 | Overview of the Modeling Process | 89 |
3.6 | Summary | 104 |
4 | Structure and Behavior of Dynamic Systems | 107 |
4.1 | Fundamental Modes of Dynamic Behavior | 108 |
4.2 | Interactions of the Fundamental Modes | 118 |
4.3 | Other Modes of Behavior | 127 |
4.4 | Summary | 133 |
Part II | Tools for Systems Thinking | 135 |
5 | Causal Loop Diagrams | 137 |
5.1 | Causal Diagram Notation | 137 |
5.2 | Guidelines for Causal Loop Diagrams | 141 |
5.3 | Process Point: Developing Causal Diagrams from Interview Data | 157 |
5.4 | Conceptualization Case Study: Managing Your Workload | 159 |
5.5 | Adam Smith's Invisible Hand and the Feedback Structure of Markets | 169 |
5.6 | Explaining Policy Resistance: Traffic Congestion | 177 |
5.7 | Summary | 190 |
6 | Stocks and Flows | 191 |
6.1 | Stocks, Flows, and Accumulation | 191 |
6.2 | Identifying Stocks and Flows | 197 |
6.3 | Mapping Stocks and Flows | 210 |
6.4 | Summary | 229 |
7 | Dynamics of Stocks and Flows | 231 |
7.1 | Relationship between Stocks and Flows | 232 |
7.2 | System Dynamics in Action: Global Warming | 241 |
7.3 | System Dynamics in Action: The War on Drugs | 250 |
7.4 | Summary | 262 |
8 | Closing the Loop: Dynamics of Simple Structures | 263 |
8.1 | First-Order Systems | 263 |
8.2 | Positive Feedback and Exponential Growth | 264 |
8.3 | Negative Feedback and Exponential Decay | 274 |
8.4 | Multiple-Loop Systems | 282 |
8.5 | Nonlinear First-Order Systems: S-Shaped Growth | 285 |
8.6 | Summary | 290 |
Part III | The Dynamics of Growth | 293 |
9 | S-Shaped Growth: Epidemics, Innovation Diffusion, and the Growth of New Products | 295 |
9.1 | Modeling S-Shaped Growth | 296 |
9.2 | Dynamics of Disease: Modeling Epidemics | 300 |
9.3 | Innovation Diffusion as Infection: Modeling New Ideas and New Products | 323 |
9.4 | Summary | 346 |
10 | Path Dependence and Positive Feedback | 349 |
10.1 | Path Dependence | 349 |
10.2 | A Simple Model of Path Dependence: The Polya Process | 354 |
10.3 | Path Dependence in the Economy: VHS versus Betamax | 359 |
10.4 | Positive Feedback: The Engine of Corporate Growth | 364 |
10.5 | Positive Feedback, Increasing Returns, and Economic Growth | 385 |
10.6 | Does the Economy Lock in to Inferior Technologies? | 387 |
10.7 | Limits to Lock In | 389 |
10.8 | Modeling Path Dependence and Standards Formation | 391 |
10.9 | Summary | 406 |
Part IV | Tools for Modeling Dynamic Systems | 407 |
11 | Delays | 409 |
11.1 | Delays: An Introduction | 409 |
11.2 | Material Delays: Structure and Behavior | 412 |
11.3 | Information Delays: Structure and Behavior | 426 |
11.4 | Response to Variable Delay Times | 434 |
11.5 | Estimating the Duration and Distribution of Delays | 437 |
11.6 | System Dynamics in Action: Forecasting Semiconductor Demand | 449 |
11.7 | Mathematics of Delays: Koyck Lags and Erlang Distributions | 462 |
11.8 | Summary | 466 |
12 | Coflows and Aging Chains | 469 |
12.1 | Aging Chains | 470 |
12.2 | Coflows: Modeling the Attributes of a Stock | 497 |
12.3 | Summary | 511 |
13 | Modeling Decision Making | 513 |
13.1 | Principles for Modeling Decision Making | 513 |
13.2 | Formulating Rate Equations | 522 |
13.3 | Common Pitfalls | 545 |
13.4 | Summary | 549 |
14 | Formulating Nonlinear Relationships | 551 |
14.1 | Table Functions | 552 |
14.2 | Case Study: Cutting Corners versus Overtime | 563 |
14.3 | Case Study: Estimating Nonlinear Functions with Qualitative and Numerical Data | 569 |
14.4 | Common Pitfalls | 573 |
14.5 | Eliciting Model Relationships Interactively | 585 |
14.6 | Summary | 595 |
15 | Modeling Human Behavior: Bounded Rationality or Rational Expectations? | 597 |
15.1 | Human Decision Making: Bounded Rationality or Rational Expectations? | 598 |
15.2 | Cognitive Limitations | 599 |
15.3 | Individual and Organizational Responses to Bounded Rationality | 601 |
15.4 | Intended Rationality | 603 |
15.5 | Case Study: Modeling High-Tech Growth Firms | 605 |
15.6 | Summary | 629 |
16 | Forecasts and Fudge Factors: Modeling Expectation Formation | 631 |
16.1 | Modeling Expectation Formation | 631 |
16.2 | Case Study: Energy Consumption | 638 |
16.3 | Case Study: Commodity Prices | 643 |
16.4 | Case Study: Inflation | 645 |
16.5 | Implications for Forecast Consumers | 655 |
16.6 | Initialization and Steady State Response of the TREND Function | 658 |
16.7 | Summary | 660 |
Part V | Instability and Oscillation | 661 |
17 | Supply Chains and the Origin of Oscillations | 663 |
17.1 | Supply Chains in Business and Beyond | 664 |
17.2 | The Stock Management Problem | 666 |
17.3 | The Stock Management Structure | 675 |
17.4 | The Origin of Oscillations | 684 |
17.5 | Summary | 707 |
18 | The Manufacturing Supply Chain | 709 |
18.1 | The Policy Structure of Inventory and Production | 710 |
18.2 | Interactions among Supply Chain Partners | 729 |
18.3 | System Dynamics in Action: Reengineering the Supply Chain in a High-Velocity Industry | 743 |
18.4 | Summary | 755 |
19 | The Labor Supply Chain and the Origin of Business Cycles | 757 |
19.1 | The Labor Supply Chain | 758 |
19.2 | Interactions of Labor and Inventory Management | 764 |
19.3 | Inventory--Workforce Interactions and the Business Cycle | 782 |
19.4 | Summary | 788 |
20 | The Invisible Hand Sometimes Shakes: Commodity Cycles | 791 |
20.1 | Commodity Cycles: From Aircraft to Zinc | 792 |
20.2 | A Generic Commodity Market Model | 798 |
20.3 | Application: Cycles in the Pulp and Paper Industry | 824 |
20.4 | Summary | 841 |
Part VI | Model Testing | 843 |
21 | Truth and Beauty: Validation and Model Testing | 845 |
21.1 | Validation and Verification Are Impossible | 846 |
21.2 | Questions Model Users Should Ask--But Usually Don't | 851 |
21.3 | Pragmatics and Politics of Model Use | 851 |
21.4 | Model Testing in Practice | 858 |
21.5 | Summary | 890 |
Part VII | Commencement | 893 |
22 | Challenges for the Future | 895 |
22.1 | Theory | 895 |
22.2 | Technology | 896 |
22.3 | Implementation | 899 |
22.4 | Education | 900 |
22.5 | Applications | 901 |
Appendix A | Numerical Integration | 903 |
Appendix B | Noise | 913 |
| References | 925 |
| Index | 947 |