GRA 4135 Decision Theory and System Dynamics
GRA 4135 Decision Theory and System Dynamics
The world is facing major global challenges that move us toward or beyond social and ecological tipping points. In recent years this has increased the attention for systems thinking and system dynamics modeling to increase the level of innovation required to solve these global problems. There is a need to use integrative approaches to support transitions towards sustainability in general and the United Nations 2030 Agenda Sustainable Development Goals (SDGs) in specific. The practice of systems thinking, and modeling are fundamental for this, and an increasing understanding of complex dynamical behaviors is at the roots of applied sustainability science. Systems thinking and modeling are thus crucial for dealing with the complexity of our living world and its resources.
Many of the problems policymakers and managers face now arise as unanticipated side effects of their own past decisions. All too often the decisions made to solve important problems fail, make the problem worse, or create new problems. Effective decision making and learning in a world of growing dynamic complexity requires a different way of thinking: systems thinking. This means that decision-makers need to expand the boundaries of mental models and use tools to understand how the structure of complex systems creates their behavior.
This course introduces students to system dynamics as a tool for analyzing and modeling complex problems and strategies in both society (at large) and businesses. As such, system dynamics enables understanding the structure and dynamics of complex systems. System dynamics is also a rigorous modeling method for developing formal computer simulations of complex systems and use these simulations to design more effective policies and make better decisions. These simulation models can be used to create management flight simulators: microworlds where space and time can be compressed and slowed so decision makers can experience the long-term side effects of decisions, speed learning, develop our understanding of complex systems, and design structures and strategies for greater success (Sterman, 2000, pp. vii).
After taking the course students should:
- Be able to explain how the structure of (business) systems creates their behavior and performance
- Understand how well-meant policies or decisions often inadvertently create (business) performance issues, rather than solve them
After taking the course students should be able to:
- Develop simulation models of (business) systems
- Simulate what-if scenarios, and use these scenarios to develop better and more sustainable policies
- Translate a problem description into a conceptual or qualitative model
- Translate the conceptual model into mathematical equations
- Develop a simulation model, learning to use new software
- Translate quantitative, simulation results into sustainable “best practices” for management in a stylized company project (case study)
After completing the course, students will be able to reflect on their “old way of thinking” and how it differs from the new way of thinking (“systems thinking”). Students will be able to recognize when a problem is dynamic, and when they should apply systems thinking and modeling. Students will learn to look at business or social problems from a broader sustainable perspective.
- Learning in and about complex systems
- The modeling process
- Causal loop diagramming
- Structure and behavior of dynamic systems
- Stocks and flows and their dynamics
- Dynamics of simple structures, like S-shaped growth
- Delays
- Modeling decision making and human behavior
- Supply chains and the origin of oscillations
Different learning methods will be used in this course, for instance lectures, individual exercises, group work, and presentations of company projects and case studies in which systems thinking and modeling were used. Firstly, studying the course material (lecture slides and compulsory literature) is required to get a grasp of basic concepts. Secondly, different kinds of exercises will be given to practice the new way of thinking and to practice with the new software and to learn how to develop simulation models. Finally, students have to deliver a group assignment based on a company project (case study) in a given topic. The assignment can be executed in groups of up to 4 persons.
Vensim PLE software is used to develop simulation models. This software can be downloaded for free.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class that is not included on It’s Learning or textbook.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
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| Assessments |
|---|
Exam category: Submission Form of assessment: Submission PDF Exam/hand-in semester: First Semester Weight: 100 Grouping: Group/Individual (1 - 4) Duration: 6 Week(s) Comment: Group assignment / term paper: students will have to build a simulation model from scratch about a certain business problem. This model then needs to be used to develop and simulate different decisions. Based on the outcome of the simulations, students have to choose the best decision and motivate their choice. Exam code: GRA 41351 Grading scale: ECTS Resit: Examination when next scheduled course |
| Activity | Duration | Comment |
|---|---|---|
Teaching | 24 Hour(s) | 12 weeks with 2 hours per week synchronized learning (activities in classroom) |
Individual problem solving | 36 Hour(s) | 12 weeks with 3 hours per week a-synchronized practicing with exercises that are closely connected to the synchronized lectures |
Prepare for teaching | 20 Hour(s) | |
Examination | 80 Hour(s) | develop a simulation model, use the model to run simulations, analyze outcomes, write term paper report (group work) |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.