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Tell me, how much discrete modeling have you done so far?

While working on business simulation models in order to deal with performance measurement difficulties, I am getting more and more into discrete-flow modeling using Powersim. I find this feature in Studio very useful.
In my opinion, there can exist discrete-flow areas within a business model, which are more helpful than continuous ones. Consider logic systems in a firm such as the whole accountancy. It would be simply wrong modeling e.g. payments or depreciations in a continuous way. Moreover, it's harder to explain to clients why the hell we're doing things like that.
Nevertheless, there are the "usual soft variable suspects", where we have to use continuous-flow structures like the information delay. Employee skill level, motivation, and decision processes can be modeled easier in continuous model-parts.
Don't get me wrong. I'm talking about single business models, not a whole industry or economy, not a world climate model or any other model on a macro level (no big numbers and only little need for average flows).
I wonder whether you got any experience with such a combination of both the discrete and the continuous modeling (especially in Powersim Studio). I'm hoping we can start off a refreshing discussion.

thanks!

...........................

Paul Koch
paul.koch@email.de

Master programme in System Dynamics, Bergen

[Edited on 11-10-2004 by Administrator]

Hi Paul.


I am glad that on some rare occasions, on this forum or on the SD list, people talk about business and not
all the time about macro economics or macro something else.

I think that with the macros, it must be easier to err from the initial objective and to build unrealistic models,
the problems being much more complicated. On top of that, policies are more applicable in a business where the power of decision exists more or less and therefore it is possible to verify the usefulness of the policies that have been applied. From hence it is tempting when dealing with high scale policies (macros) to fall into theory.

I use Vensim and I have seen on the Powersim internet site that the software considers integers like any current programming language does.

At first, this particularity of Vensim annoyed me, and I used extensively the integer function that transforms a real number into an integer one.
It worked relatively well, except when optimizing, with too many different solutions for one problem.

After a while I stopped using that function, because I noticed that as long as insights were considered, it had no real importance, using or not using it, and even if you were looking for concrete results, the approximation was small. For instance, I have a program that calculates, the investments in different category of cars or trucks for the 18 next months, considering the desired utilization, forecasted demand, minimum and maximum of kilometres when sold etc…

You can then see that in June 2005, in a certain category of car, the model will propose to sell 8.6 cars and to buy 10.1 new one’s! This would have annoyed me two years ago, but now I don’t care.

Of course I may find a case where I would be really annoyed. It may come if I try to calculate optimal prices, due to short term variation of the demand, that would necessitate to rent a half truck! Even with that I will try to find a solution. Of course I would prefer Vensim to recognize integers and be more discrete, but is it possible to implement it with all the other features of the software, such as calibration, optimization, reality check? Going into discrete modelling is more time consuming too. I did not see on the Powersim site any reference to calibration and optimization nor reality check, a tool that I am using more and more often.

This is anyhow an interesting thread and I am waiting for other people to give their opinions on the subject.

I tried to post this message on the SD mailing list but it always give me the following message:

Impossible d'envoyer le message car l'un des destinataires a été refusé par le serveur. L'adresse de messagerie refusée était 'system-dynamics@europe.std.com'. Objet 'Re: QUERY Discrete-flow modelling for business simulation (SD4932)', Compte : 'pop.wanadoo.fr', Serveur : 'smtp.wanadoo.fr', Protocole : SMTP, Réponse du serveur : '550 <system-dynamics@europe.std.com>: Recipient address rejected: Relaying not allowed', Port : 25, Sécurisé (SSL) : Non, Erreur de serveur : 550, Numéro d'erreur : 0x800CCC79

I will have to check that with the system engineer.

Regards.
Jean-Jacques Lauble,
Allocar, rent a car
Strasbourg, France.