Strategic Modelling and Business Dynamics: A Feedback Systems Approach

5.8. Appendix 1: Model Communication and Policy Structure Diagrams

In this chapter I have used the factory model to illustrate the iterative steps in the model building process from problem articulation to simulation. It is a small model containing 22 concepts in total (two asset stocks, four flow rates, six converters, one built-in smoothing function, eight constants and one exogenous time series input) that just about fits on a single page. Nevertheless, as Figures 5.8, 5.17 and 5.18 show, there is considerable visual complexity in the model, which can inhibit communication. Communication is even more difficult with practical application models that contain hundreds or even thousands of concepts. There is a need for visual clarity, which can be achieved by grouping model concepts into meaningful clusters.

The factory model was divided into two main sectors, one for production control and the other for workforce management. Within the two sectors are the main operating policies that collectively guide and coordinate the accumulation of asset stocks. These policy functions can be indicated on a stock and flow diagram by using shading, as illustrated in Figures 5.8 and 5.17. Alternatively, much-simplified pictures can be drawn that focus on operating policies and strip away all the underlying formulation detail. The result is a 'policy structure diagram'. Figure 5.34 is an example. It shows the factory model in terms of its main operating policies and stock accumulations. Here, ...