System dynamics can use operations research approaches in designing decision
functions. The effect of these decisions can be tested in a closed loop structure.
Similarly, the effectiveness of a sequence of static optimized decisions can be tested
in a dynamic environment created by a system dynamics model.
(b) Econometrics
Using econometrics for long-term forecasting is very popular in macroeconomic
literature. Thus, econometrics is a truly competing methodology for system dynamics. Econometrics also builds causal relationships between one variable and one or
more explanatory variables. However, these relationships are always established on
the basis of past data and are supported by statistical significance tests.
System dynamics can make use of past data and statistical significance tests in
capturing the hidden cause – effect relationships’ and in analysing the model results.
(c) Feedback control theory
System dynamics is founded on the principles of feedback control. The theory of
feedback control has undergone a radical change in the past fifty years. Particularly
worth mentioning are the developments in the fields of stabilizing control and the
theory of optimal control. Great possibilities exist for the use of these developments
in the system dynamics framework, particularly during the crucial stages of model
analysis and new policy design.
(d) Information processing
Computer-based information systems are becoming the order of the day. The
emphasis is also changing from transaction processing to decision support. System
dynamics can be a valuable aid in identifying the information required for policy
decisions.
(e) Qualitative analysis
Simulation may not always excite all modes of behaviour of a system. Sensitivity
analysis may not guarantee testing of the model with all possible values of parameters. Therefore, the traditional method of model testing is not a foolproof method of
generating all the feasible modes of behaviour. Qualitative analysis can unfold the
various modes of behaviour of the model even without resorting to simulation, but
using tools such as eigenvalue analysis, phase-plane diagram, and bifurcation
analysis. System dynamics experts have already started using these tools for formal
analysis of their models. Development of appropriate software is required to accelerate this process.
(f) The Delphi technique
The Delphi method and its variants are techniques to obtain expert opinion on
specific issues. The initial stages of defining a problem, developing a causal loop
diagram, and fixing the model boundary and even the intermediate stage of outlining
policy options require expert opinion for validation. These techniques can help in
providing a strong foundation to those rather weak stages of system dynamics
modelling.
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functions. The effect of these decisions can be tested in a closed loop structure.
Similarly, the effectiveness of a sequence of static optimized decisions can be tested
in a dynamic environment created by a system dynamics model.
(b) Econometrics
Using econometrics for long-term forecasting is very popular in macroeconomic
literature. Thus, econometrics is a truly competing methodology for system dynamics. Econometrics also builds causal relationships between one variable and one or
more explanatory variables. However, these relationships are always established on
the basis of past data and are supported by statistical significance tests.
System dynamics can make use of past data and statistical significance tests in
capturing the hidden cause – effect relationships’ and in analysing the model results.
(c) Feedback control theory
System dynamics is founded on the principles of feedback control. The theory of
feedback control has undergone a radical change in the past fifty years. Particularly
worth mentioning are the developments in the fields of stabilizing control and the
theory of optimal control. Great possibilities exist for the use of these developments
in the system dynamics framework, particularly during the crucial stages of model
analysis and new policy design.
(d) Information processing
Computer-based information systems are becoming the order of the day. The
emphasis is also changing from transaction processing to decision support. System
dynamics can be a valuable aid in identifying the information required for policy
decisions.
(e) Qualitative analysis
Simulation may not always excite all modes of behaviour of a system. Sensitivity
analysis may not guarantee testing of the model with all possible values of parameters. Therefore, the traditional method of model testing is not a foolproof method of
generating all the feasible modes of behaviour. Qualitative analysis can unfold the
various modes of behaviour of the model even without resorting to simulation, but
using tools such as eigenvalue analysis, phase-plane diagram, and bifurcation
analysis. System dynamics experts have already started using these tools for formal
analysis of their models. Development of appropriate software is required to accelerate this process.
(f) The Delphi technique
The Delphi method and its variants are techniques to obtain expert opinion on
specific issues. The initial stages of defining a problem, developing a causal loop
diagram, and fixing the model boundary and even the intermediate stage of outlining
policy options require expert opinion for validation. These techniques can help in
providing a strong foundation to those rather weak stages of system dynamics
modelling.
6.3 Systems Analysis in Infrastructure Sectors
167