System Dynamics modelling originated from pioneering work at MIT in the 1950s by JayForrester.
System Dynamics is a computer aided approach for the analysis and design. This applies to
dynamic problems arising in complex social, managerial or economic systems. Any dynamic
systems characterized by interdependence, mutual interaction, information feedback and
circular causality. System Dynamics is a framework for seeing interrelationships rather than
things for seeing the patterns of change rather than static snapshot. Systems thinking is that
discipline for seeing the structures that underlie complex situations and for discerning high or
low leverage change.

According mathematically, the basic structure of a formal System Dynamics computer
simulation model is a system of coupled nonlinear, first-order differential and integral
equations. The Simulation of such dynamic systems is easily obtained by partitioning
simulated time into discrete intervals of length and stepping the system through time one at a
time.

The feedback concept is the heart of a System Dynamics approach. Figures of the loops of
information feedback and circular causality are tools for the conceptualizing the structure of a
complex system and for communicating the model based insights. The feedback loop exists
when the information resulting from some action travels through a system and eventually
reverts back in some form to its point of origin and potentially influencing the future action
also.

The causal loop diagram is a simple map of a dynamic system with all its consisting
components and their interactions. By the capturing interactions and consequently the
feedback loops and a causal loop diagram reveals the structure of a system dynamics. The
loop concept underlying the feedback and circular causality by itself is not that enough.
However, the explanatory power and insightfulness of feedback understanding is also rest on
the notions of active structure and loop dominance. A crucial requirement for the powerful
view of a dynamic system, its ability of a mental or formal model to change the strengths of
influences as the conditions changes, i.e., the ability to shift active or dominant structure.

The Development of the System Dynamics model proceeds through the following steps:-

- Development of the Causal Loop Diagrams. These are used to surface mental models about the behaviour of elements of the system expressed as causal relationships andfeedback loops
- Identify the stock that provide an initial value and decide the flows that change over the stock.
- The Stocks and Flows Maps, describe the structure of the system in terms of flows and accumulations of things
- The Model boundary chart is the catalogues all the endogenous, exogenous and excluded variables from the model.
- The System Dynamics Models that combine Casual loop diagrams plus Stocks and flows, which describe the dynamic behaviour of a system
- The Sub system diagrams are that provides the overall architecture of models that comprising subsystems and flows of things between sub systems.
- Decide on the time intervals, which is the start and finish time of the simulation run

The concept of endogenous change in the fundamentals of the System Dynamics approach. It
elaborates the aspects of model formulation. Exogenous interruptions are seen at most as
triggers of system behaviour. The actual causes are contained within the structure of the
system itself. The example like, the interaction of a pendulum’s position and the momentum
which is produces oscillations. Corrective responses are also not modelled as functions over
the time but dependent on conditions within the system.

The Time by itself is not seen as a cause. But more importantly, that theory building and
policy analysis are significantly affected by this endogenous perspective. Taking an
endogenous view exposes the natural compensating tendencies in the social systems that
conspire to the defeat many policy initiatives. The Feedback and circular causality are
delayed, devious and deceptive. For the understanding, the System Dynamics practitioners
strive for an endogenous point of view. These efforts are to uncover the sources of the system
behaviour that are exists within the structure of the system itself.

The Stocks levels and flow rates that are affects them are essential components of the system
dynamics structure. A map of causal influences and feedback loops is not that enough to
determine the dynamics behaviours of the systems. The constant inflow yields the linearly
rising stock and the linearly rising inflow yields the stock rising along a parabolic path and so
on.

The importance of levels and rates appears in the most clearly manner when one takes a
continuous view of the structures and the dynamics. Although a discrete view, focusing the
separate events and decisions that are entirely compatible with an endogenous feedback
perspective. The continuous view strives to look beyond events to see the dynamic patterns
underlying them. Moreover, the continuous view particular focuses not on discrete decisions
but on the policy structure underlying decisions. Events and decisions are seen under the
surface phenomena that ride over an underlying tide of system structure and behaviour. It is
that underlying tide of policy structure and the continuous behaviour that is the system
dynamicity’s focus.

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