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UCSB ENVS 106 - Lecture 09 Thinking in Systems Chapter 2_POST

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Chapter 2: A Brief Visit to the Systems ZooSingle Flow, Single Stock – Heat Inflow (only)Single Flow, Single Stock – Heat Outflow (only)Both Flows, Single Stock – Inflow and OutflowOne Stock SystemsFlow DominanceSlide 7Slide 8Population and CapitalResponse Delays!Inventory Management: Buffers and DelaysInventory Management: Buffers and DelaysSlide 13Inventory Management: Buffers and DelaysTwo Stock SystemsSlide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23Slide 24Chapter 2: A Brief Visit to the Systems ZooSingle Flow, Single Stock – Heat Inflow (only)•Thermostat feedback leads to increasing heat inflow to the house•When the setting is achieved, heat inflow ceases•A more powerful heater can increase the rate of heat inflowNote that the balancing feedback keeps the heater at 65°. A more powerful heater does not serve much more of a function than simply heating up to 65° faster.Single Flow, Single Stock – Heat Outflow (only)•Outside feedback causes heat outflow from the houseThe larger the temperature difference, the faster the outflow•When the room cools down to the outside temp, heat outflow ceases•Better insulation can slow the rate of heat outflowBoth Flows, Single Stock – Inflow and Outflow•The strength of the heat inflow can override the heat outflow, but it stabilizes at an average below the thermostat setting.•(most people know) you often need to set the heater a bit above the desired temperatureDynamic Equilibrium AchievedTechnically there’s a subtle up-and-down going on, but it’s easier to simplify the model and get rid of these minor balanced oscillationsOne Stock Systems•System Model of a home heating system•Pulling a single stock in two directions (two flows)Flow Dominance•If one flow dominates another flow, dynamic equilibrium is not achievedWhy does the room temperature dip to nearly 53°F around hour 14?A. The “pressure” of cold outside temperatures pulls the temperature down, increasing heat outflowB. The heat outflow is high due to poor insulationC. The heat inflow is not high enoughThe reinforcing feedback of the birthrate dominates the balancing feedback of the death rateBalancing feedback of death rate dominates the low reinforcing feedback of the birthrateNo DominanceThe reinforcing feedback of birthrate and balancing feedback of death rate achieve dynamic equilibriumIn the case of global population models, fertility and mortality values change as countries (are expected to) develop, and as specific diseases and other conditions affect a given geographical region. These are what we call “driving factors”.Three questions for testing the value of models (such as population models):1. Are the driving factors likely to unfold this way?2. If they did, would the system react this way?3. What is driving the driving factors?A question of “system boundaries”. Are driving factors themselves part of the system? If so, how might they feed back into the system? •Environment•Economics•Social FactorsPopulation and Capital“A population is nothing like an industrial economy, except that both can reproduce themselves out of themselves and thus grow exponentially. And both age and die. A coffee cup cooling is like a warmed room cooling, and like a radioactive substance decaying, and like a population or industrial economy aging and dying. Each declines as the result of a balancing feedback loop.”Response Delays!•Information delivered by the feedback loop can only affect future behavior•There will always be delays in responding •Adequate responses have to account for changes in flows during the response period!If it takes 4 days for an inventory order to arrive at your store, you need to account for what will be sold during those 4 days!Inventory Management: Buffers and Delays•Buffer: Need to keep inventory stock at a reasonable level•Perception Delay: any old blip is not a clear change in demand – takes time to infer an actual change•Response Delay: partial adjustment – don’t over-order in case the change is only temporary  1/3 of additional shortfall per order•Delivery Delay: it takes 5 days for supplier to receive order and deliverInventory Management: Buffers and DelaysTwo simple balancing feedback loops + 3 delays: A permanent 10% increase in sales leads to oscillations!•Buffer: Need to keep inventory stock at a reasonable level•Perception Delay: any old blip is not a clear change in demand – takes time to infer an actual change•Response Delay: partial adjustment – don’t over-order in case the change is only temporary  1/3 of additional shortfall per order•Delivery Delay: it takes 5 days for supplier to receive order and deliver“Oscillations! A single step up in sales causes inventory to drop. The car dealer watches long enough to be sure the higher sales rate is going to last. Then she begins to order more cars to both cover the new rate of sales and bring the inventory up. But it takes time for the orders to come in. During that time inventory drops further, so orders have to go up a little more, to bring inventory back up to ten days’ coverage.Eventually, the larger volume of orders starts arriving, and inventory recovers—and more than recovers, because during the time of uncertainty about the actual trend, the owner has ordered too much. She now sees her mistake, and cuts back, but there are still high past orders coming in, so she orders even less. In fact, almost inevitably, since she still can’t be sure of what is going to happen next, she orders too little. Inventory gets too low again. And so forth, through a series of oscillations around the new desired inventory level.”Perception Delay!Response Delay!Delivery Delay!Inventory Management: Buffers and Delays•Information delays and physical delays prevent actions from having an immediate effect on inventory, which lead to oscillations•Delays in the bigger system: perception delays, production delays, supply delivery delays, supply increase delays, construction delaysBroader picture: increase in jobs, increase in demandBroader picture: decreases in demand!!“That very large system, with interconnected industries responding to each other through delays, entraining each other in their oscillations, and being amplified by multipliers and speculators, is the primary cause of business cycles. Those cycles don’t come from presidents, although presidents can do much to ease or


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