Where Did the Gasoline Go?

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401.661 Advanced Construction Technology

1

Moonseo Park

39동 433 Phone 880-5848, Fax 871-5518 E-mail: [email protected] Department of Architecture College of Engineering Seoul National University Professor, PhD

Where Did the Gasoline Go?

Identifying Stock & Flow Structure

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Lecture Outline

§  Contribution of Stocks to Dynamics

§  Identifying Stock and Flow Structures

§  Mapping Stock and Flow Structures

§  Where did the gasoline go?

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3

Characterize the state of the system

§  Pilot: aircraft’s position,

heading, altitude, fuel level

§  Firm: order backlog,

inventory stocks, labor force

§  Balance sheet: cash,

inventory, payables, debt

Provide decision-makers with the basis for actions

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4

Provide systems with inertia and memory

Stocks accumulate past events.

§  Lead in the paint of housing remains high (banned in

1978).

§  Ozone-destroying chloride by CFC will remain for decades.

§  Beliefs persist over time, generating inertia and

continuity in attitude and

behavior.

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5

The source of delays

A delay is a process whose output lags behind its input. The difference between the input and output

accumulated in a stock of material in process

Mail in Post Office

Posting Delivery

Proposed Buildings

Buildings under Construction Decision to

Develop Start

Construction

Occupancy

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Create disequilibrium dynamics

Stocks absorb the differences between inflows and outflows, permitting them to differ. As a result, disequilibrium is the rule rather than the exception.

§  What if there is no buffer or stock?

§  Whenever controlled by different decision makers, subject to random shocks, a buffer or stock must exist.

§  Whether/how equilibrium is achieved is an emergent

property of a system.

Stockpiling grain during the 7 good years

Grain in Inventory

Planting Consumption

Market Prices

Inventory Conditions

Availability

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7

Lecture Outline

ü  Contribution of Stocks to Dynamics

§  Identifying Stock and Flow Structures

§  Mapping Stock and Flow Structures

§  Where did the gasoline go?

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8

By units of measure

Items Stocks Flows Units

Company sales Phone calls on hold Workers

GDP

Cash flow

On-going projects

Greenhouse gas emissions Price of product

Employee morale Depreciation

Construction work quality

√ $/year

√ calls

√ persons

√

^$/year

√ $/year

√ units √ tons/year

√ $/unit

√ level

√ %/year √ level

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9

The Snapshot Test

Population (people) Birth Rate

(people/year)

Death Rate (people/year)

Debt ($) Borrowing

($/year)

Repayment ($/year)

Expected Customer Order

(widgets/week) Change in Expected

Oder Rate (widgets/week/week)

*Actual Customer Order:

a stock or flow?

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10

Lecture Outline

ü  Contribution of Stocks to Dynamics

ü  Identifying Stock and Flow Structures

§  Mapping Stock and Flow Structures

§  Where did the gasoline go?

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11

Conservation of Material in S&F

Students in Admission DOA

DOA Alumni Graduation

Fail Students in

Army

Entering Army Discharged from Army

Information about Students in DOA

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12

State-Determined Systems

Systems evolve by feedbacks of information from the state of the system to the flows, which

in turn alter the states.

.

State of the System Net Rate of

Change

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State Variables

State variables including constants (endogenous, exogenous) determine rates.

S1

S2 Exogenous

Constant 1

Constant 2

System Boundary

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Examples

Students in Admission DOA

DOA Alumni Graduation

Fail Students in

Army

Entering Army Discharged from Army

Graduation Ratio

Failure Ratio

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15

Auxiliary Variables

For easy communication and clarity, it is often helpful to define intermediate or auxiliary variables, which consist

of functions of stocks (and state variables).

Population Net Birth Rate

Food + ?

Incorrect Correct

Population Net Birth Rate

Food per Capita

Food Fractional Birth

Rate

-

+ +

+ + R

B

R: more people, more births, more people B: more people, less food per person, lower

fractional net birth rate, fewer births)

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Stocks change only thru their rates

No causal links are allowed directly linked into a stock.

Customers Waiting for Service Customer Arrival

Rate

Customer Departure Rate

Workweek

Service Staff

Productivity +

+

- - -

Customers Waiting for Service Customer Arrival

Rate

Customer Departure Rate Workweek

Service Staff

Productivity +

+ +

Incorrect

Correct

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When to show S&F Structures?

When representing physical processes, delays, or stocks whose behaviors are important in the dynamics

you seek to explain.

S&F

CLD

Work in Process Inventory

Finished Inventory Production Start

Rate

Production

Completion Rate Shipment Rate

Production start

Rate Work in Process Inventory

Production

Completion Rate Finished Inventory Shipment Rate

+ - + -

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Aggregation & Disaggregation

Appropriate level of aggregation should be decided depending on modeling purposes.

Work in Process Inventory

Finished Inventory Production Start

Rate

Production

Completion Rate Shipment Rate

Parts in Process

Finished Inventory Production

Start Rate

Shipment Rate Assemblies in

Process

Product in Testing Assembly

Start Rate

Test Satrt Rate

Production Completion Rate

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Challenging the clouds

Set the model

boundary based on modeling purpose and scope.

WIP

Finished Inventory

Production Start Rate

Shipment Rate Production Completion Rate

Source: Unlimited supply of material

Sink: Unlimited

Absorption capacity

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Lecture Outline

ü  Contribution of Stocks to Dynamics

ü  Identifying Stock and Flow Structures

ü  Mapping Stock and Flow Structures

§  Where did the gasoline go?

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21

Where did the gasoline go?

NO GAS

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22 Gas in Service

Station Tanks Gas in Cars Gas in

Individual Storages Delivery

Rate Sales Rate Hoarding

Rate Combustion

Rate

Shortfall

Anxiety for Shortfall Demand

+ +

Government Control

-

Media Effect+ + -

+ +

-

Drivers, remembering

the fist oil embargo in 1973, and worry that they will not be able to get their tanks fill, begin to demand more. The abrupt increase in demand triggers the momentary shortfall, which again increases people’s anxiety and makes

people demand more.

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The more anxiety people

have the more gas people hoard in their storage, which makes the situation worse.

Gas in Service

Rate

Sales Rate Hoarding

Rate

Shortfall

+ +

-

+ +

-

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Furthermore,

the media makes the situation worse.

Gas in Service

Rate

Shortfall

+ +

-

+ +

-

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As a result,

the gas went to individual storage….

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The government’s policies

employed to cope with this situation failed to ease the shortage making it worse.

Gas in Service

Rate

Shortfall

+ +

-

+ +

-

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Then, how to easy people’s anxiety?

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References

§  Avraham Shtub, Jonathan F. Bard, Shlomo Globerson, “Project management : engineering, technology, and implementation”, Englewood Cliffs, NJ, Prentice Hall, 1994

§  Frederick E. Gould, Nancy Joyce, Chapter 8, “Construction project management”, Upper Saddle River, NJ, Prentice Hall, 1999

§  James M. Lyneis *, Kenneth G. Cooper, Sharon A. Els, “Strategic management of complex projects: a case study using system dynamics”, System Dynamics Review, Vol. 17, No. 3, 2001

§  Christopher M. Gordon, “Choosing appropriate construction contracting method”, J. of Construction Engineering & Management, Vol. 120, No. 1, 1994

§  Feniosky Pena-Mora, Jim Lyneis, “Project control and management”, MIT 1.432J Lecture Material, 1998

§  Barrie, D.S., and Paulson, B.C., “Professional Construction Management”, McGraw Hill, 1992

§  Halpin, D.W., “Financial and Cost concepts for construction management”, John Wiley & Sons, 1995

§  Yehiel Rosenfeld, “Project Management”, MIT 1.401J Course Material, 2000

§  Sarah Slaughter, “Innovation in construction”, MIT 1.420 Course Material, 1999

§  Gray and Hughes, “Building Design Management”,.

§  Murdoch and Hughes, “Construction Contracts: Law and Management”, E&FN SPON, 1996

§  Gray, Hughes and Bennett, “The Successful Management of Design”, Reading, 1994

§  Sterman, J., “Business Dynamics”, Mcgraw-Hill, 2000

Where Did the Gasoline Go?

Moonseo Park

Where Did the Gasoline Go?

Identifying Stock & Flow Structure

Lecture Outline

§ Contribution of Stocks to Dynamics

§ Identifying Stock and Flow Structures

§ Mapping Stock and Flow Structures

§ Where did the gasoline go?

Characterize the state of the system

§ Pilot: aircraft’s position,

heading, altitude, fuel level

§ Firm: order backlog,

inventory stocks, labor force

§ Balance sheet: cash,

inventory, payables, debt

Provide decision-makers with the basis for actions

Provide systems with inertia and memory

Stocks accumulate past events.

§ Lead in the paint of housing remains high (banned in

1978).

§ Ozone-destroying chloride by CFC will remain for decades.

§ Beliefs persist over time, generating inertia and

continuity in attitude and

behavior.

The source of delays

A delay is a process whose output lags behind its input. The difference between the input and output

accumulated in a stock of material in process

Create disequilibrium dynamics

Stocks absorb the differences between inflows and outflows, permitting them to differ. As a result, disequilibrium is the rule rather than the exception.

§ What if there is no buffer or stock?

§ Whenever controlled by different decision makers, subject to random shocks, a buffer or stock must exist.

§ Whether/how equilibrium is achieved is an emergent

property of a system.

Lecture Outline

ü Contribution of Stocks to Dynamics

§ Identifying Stock and Flow Structures

§ Mapping Stock and Flow Structures

§ Where did the gasoline go?

By units of measure

Items Stocks Flows Units

Company sales Phone calls on hold Workers

GDP

Cash flow

On-going projects

Greenhouse gas emissions Price of product

Employee morale Depreciation

Construction work quality

The Snapshot Test

Lecture Outline

ü Contribution of Stocks to Dynamics

ü Identifying Stock and Flow Structures

§ Mapping Stock and Flow Structures

§ Where did the gasoline go?

Conservation of Material in S&F

State-Determined Systems

Systems evolve by feedbacks of information from the state of the system to the flows, which

in turn alter the states.

.

State of the System Net Rate of

Change

State Variables

State variables including constants (endogenous, exogenous) determine rates.

S1

S2 Exogenous

Constant 1

Constant 1

Constant 2

Examples

Auxiliary Variables

For easy communication and clarity, it is often helpful to define intermediate or auxiliary variables, which consist

of functions of stocks (and state variables).

Incorrect Correct

Stocks change only thru their rates

No causal links are allowed directly linked into a stock.

Incorrect

Correct

When to show S&F Structures?

When representing physical processes, delays, or stocks whose behaviors are important in the dynamics

you seek to explain.

§  Contribution of Stocks to Dynamics

§  Identifying Stock and Flow Structures

§  Mapping Stock and Flow Structures

§  Where did the gasoline go?

§  Pilot: aircraft’s position,

§  Firm: order backlog,

§  Balance sheet: cash,

§  Lead in the paint of housing remains high (banned in

§  Ozone-destroying chloride by CFC will remain for decades.

§  Beliefs persist over time, generating inertia and

§  What if there is no buffer or stock?

§  Whenever controlled by different decision makers, subject to random shocks, a buffer or stock must exist.

§  Whether/how equilibrium is achieved is an emergent

ü  Contribution of Stocks to Dynamics

§  Identifying Stock and Flow Structures

§  Mapping Stock and Flow Structures

§  Where did the gasoline go?

ü  Contribution of Stocks to Dynamics

ü  Identifying Stock and Flow Structures

§  Mapping Stock and Flow Structures

§  Where did the gasoline go?

ü  Contribution of Stocks to Dynamics

ü  Identifying Stock and Flow Structures

ü  Mapping Stock and Flow Structures

§  Where did the gasoline go?