Discrete-Event Simulation and System Dynamics for Management Decision Making

3Systems Thinking and System Dynamics: A Primer

Brian Dangerfield

Salford Business School, University of Salford, UK

3.1 Introduction

This chapter introduces the basics of the system dynamics simulation methodology, together with the adjunct field of systems thinking which emerged subsequently. The field of system dynamics was initially known as industrial dynamics, which reflected its origins in the simulation of industrial supply chain problems. The first paper published by the founder of the field, Jay W. Forrester, appeared in 1958 (Forrester, 1958) and it was a precursor to what proved to be a hugely influential book: Industrial Dynamics (Forrester, 1961). Forrester sought to apply concepts of control engineering to management-type problems and was very probably influenced by the earlier work of Arnold Tustin (Tustin, 1953). Forrester argued that the field of operations/operational research (OR) at that time was not focused on the sort of problems that sought to inform policy (top-level) issues in an organisation. By its very definition OR was restricted to operational problems. Forrester saw a niche for a methodology which could tackle strategic issues more appropriately addressed to the success or failure of an organisation, as well as prominent national and international policy issues. See Forrester (2007) for his personal recollections of the history of the field.

The characteristics of system dynamics¹ models can be listed as follows:

• They address issues by considering ...