Reference no: EM133138395

Computer Simulation for Business - System Dynamics

Case Study - "Classic Verandas".

PART A.

i) List your variables for the system, ii) put them into linked pairs. Please provide the list of variables and pairs in your report.

ii) Draw a full Causal Loop Diagram for the problem situation or system described below in the case study. Show for each loop whether it is reinforcing or balancing. Do draft or rough versions first and please include these as photos,and finally the full neat, finished versionin your report.

iii) Fully describe each of the main loops, parts or areas of the system, as represented by your diagram. Describe their behaviour, and what determines this. Then explain how these major parts interact and make up the system as a whole, and so determine the overall system's behaviour. Include in your description the interactions or links between the variables within loops and between loops. (Minimum 300 words - no maximum).

Advice and feedback on and help with this part will be provided.

PART B.

Now move from your Causal Loop Diagram (CLD) to a Stock and Flow Model of this system - so translate one into the other - so use the CLD as the basis for this second representation or model. We would call this first version of the stock and flow model, the Baseline Model.

i) Build up and draw your stock and flow diagram - first do one or more draft versions, and then implement your model using iThink software, and so create a final neat version. Pleaseinclude all these versions of your model, as diagrams, clearly labelled, in the report. (10%)

Broadly, you will need to identify and include in your diagram, these elements:

• stock variables - but keeping these to a minimum is seen as good practice - and then
• those variables that are the material flows in and out of the stocks you have identified, and the rates of flow, and then
• the determinants of these, thus auxiliary variables, constants or givens, and
• the causal links or information flows linking all these together, as well as the parts of the system, plus
• the sources and sinks / ends of the system, its boundaries.

Advice and help with this part will be provided.
ii) Describe fully the main parts of your stock and flow model, the interactions between the parts.
iii) Define fully the equations for the model - so for what determines the stocks, the rates of flow in and out of stocks, and for those auxiliary variables that need an equation.

Input initial values for your Baseline Model, eg for stocks and the givens or constants, as provided in the study.

In the report, please list all theequations, the variables, givens and constants, and initial values, together with the associated units they are in.

iv) Run the Baseline Model implemented in iThinkand check the output generated matches your expectations.Please include the final version of your Baseline operational model with your report as a separate iThink file, as well as the diagram of the model, as above.

v) Once satisfied with your model, briefly explain your equations, where necessary, and this should include how you have modelled both information smoothing and non-linear relationships. (Minimum 300 words - no maximum).

PART C.

i) Decide on an appropriate set of key variables, and run and range specifications, and run the Baseline model to see the predicted behaviour of these variables over time eg a 60-month period, with the current system structure and parameters. You should generate as output:a minimum of 3sets of graphs and 2 tables. Please include these in your report.

ii) Looking at the output, describe what you see happening over this period (assuming the current system structure and parameters).

iii) Given what you see as the forecast system behaviour, identify between 5 and 8 changes of policy that might bring about improved company performance over the 60-month period. For example, you might try an increased fraction of revenues to the marketing department, better sales rep generation of orders, larger production capacity or higher utilisation of capacity. Briefly say with each, how the particular change might be achieved in practice.

Make each of these changes to your model in turn, one by one, and run the model to see what happens as a result of the modified scenario. Provide the resulting graphs of behaviour for a set of key variables. With each graph describe what you see as the impact of the particular change made.

PART D.

i) Based on your view of the current situation gained via your models, and the various simulations or different scenarios you have tried, explain your conclusions about the company's present position and what could be done to improve this in the future. For example, say what are the constraints on the business - what might limit its growth, revenues and profits.

ii) Say what your policy recommendations are for the company therefore, so that it may have a successful and profitable future that can be sustained in the longer term:

a) in the short term - up to one year;
b) in the longer term - from one year to five years or longer.

Attachment:- Computer Simulation for Business.rar