SOS...simultaneous problem

Use this forum to post Vensim related questions.
Post Reply
Dodik.ariyanto
Junior Member
Posts: 3
Joined: Sat May 06, 2017 10:09 am
Vensim version: PLE

SOS...simultaneous problem

Post by Dodik.ariyanto »

Dear admin,

I have system dynamic model using VENSIM PLE but the model can't run because of simulaneous equation.
I have already trying ACTIVE INITIAL but the error was exist.

do you have advise to solve the problem ?

Thx

Dodik Ariyanto
Attachments
Coal Royalty_Base Model original.mdl
(11.6 KiB) Downloaded 156 times
tomfid
Administrator
Posts: 3806
Joined: Wed May 24, 2006 4:54 am

Re: SOS...simultaneous problem

Post by tomfid »

The loop here is pretty simple: cash flow affects Produksi -> Revenue -> etc., and ultimately determines itself. This is conceptually impossible. There has to be a stock in the loop somewhere.

I'm not sure what's happening here, but my guess is that Produksi actually depends on a stock of accumulated cash reserves, rather than on instantaneous cash flow. If you add something like that, this should work.
Dodik.ariyanto
Junior Member
Posts: 3
Joined: Sat May 06, 2017 10:09 am
Vensim version: PLE

Re: SOS...simultaneous problem

Post by Dodik.ariyanto »

Dear Tomfid,

Thanks for fast respond and helpful advise..
I already modified the model as your advise and the simultaneous error was solved..by adding Cumulative Cash Flow as a stock
Unfortunately..i still have one problem about the result...

My model actually describe simple coal mining activity..
In this industry..production will depend on cash flow which is related with coal price..

The company will operate if coal price high and stop if coal price is low..
For example :

Year : 1 2 3 4 5
Price (USD) : 60 50 30 50 60
Condition : price USD 60 and USD 50 will create positive cash flow, and price USD 30 will create negative cash flow..
Positive cash flow means the company will produce coal and negative cash flow means production stop.

The result of model is production stop in year 3, year 4 and year 5....
weather the expected result is production is only stopped in year 3 and will make production again in year 4 and year 5...

How to solve the problem ? Is it any function to use ?
Herewith i attach the model in English version

Many kind for your kindly attention

Dodik Ariyanto
Attachments
Coal Royalty_Base Model original_English Version_new.mdl
(12.4 KiB) Downloaded 161 times
tomfid
Administrator
Posts: 3806
Joined: Wed May 24, 2006 4:54 am

Re: SOS...simultaneous problem

Post by tomfid »

I think the problem is not the stock structure, but the accounting. Judging by Profit/Loss, the mine is already losing money in year 2, so it's no surprise that it shuts down.

A couple thoughts:

- You might want to calculate an expectation of profitability that's separate from cash flow. The trouble with the way things work here is that once the mine shuts down, cash flow is 0, so it can't start back up when prices rise.

- You could test the mine's breakeven point by replacing your current time series (lookup) with a slowly-declining price.

- You have variable cost as a fraction of revenue (so var unit cost = fraction of price). In reality it should be independent of price, though it might covary with price somewhat due to a dependence on utilization, with higher utilization expected at times of high prices.
Dodik.ariyanto
Junior Member
Posts: 3
Joined: Sat May 06, 2017 10:09 am
Vensim version: PLE

Re: SOS...simultaneous problem

Post by Dodik.ariyanto »

Dear Tomfid,

The ideal financial system is as your mention before...
but, the behavior of coal mining is my country, Indonesia, was as i explained..if price lower, the operation will stop and run again when price rise

Actually i already have the model describing that behavior...but i think the model is unusual..
Perhaps, you can loot at the model I attached

Many thanks

Dodik
Attachments
Coal Royalty_Base Model cloning.mdl
(20.91 KiB) Downloaded 149 times
Post Reply