Question

Course Title: BUSINESS DYNAMICS: SYSTEM THINKING AND MODELLING FOR A COMPLEX WORLD  

                                Required

What System Dynamics

Meaning of feedback, types, with examples

Answer 1

System dynamics is a systems-­based approach to modeling complex organizations that is focused on feedback loops, stocks and flows. System dynamics is a modeling language from systems theory that is used in the management of organizations in order to try and capture how local causal links and feedback loops interact over time to give rise to long­term patterns of behavior. System dynamics is a methodology and mathematical modeling technique to frame, understand, and discuss complex issues and problems.

Feedback loops describe a state of interdependence between two or more elements within a system and there are just two types of feedback, positive feedback which is a self-reinforcing loop and negative feedback which is a balancing loop.

There are just two types of feedback, positive feedback which is a self-reinforcing loop and negative feedback which is a balancing loop.

Reinforcing feedback (or amplifying feedback) accelerates the given trend of a process. If the trend is ascending, the reinforcing (positive) feedback will accelerate the growth. If the trend is descending, it will accelerate the decline. For example, the falling of an avalanche is a self­reinforcing feedback process, the more material that falls the more momentum it adds to the avalanche thus dislodging more material which feeds back to create greater momentum and so on.

Balancing feedback, or stabilizing feedback, involves two or more elements that are counterbalancing each other, if we get more of one this creates less of another which feeds back to reduce the first. For example, the market mechanism that balances supply and demand is a negative feedback loop. If supply goes up the price goes down which promotes more buying which feeds back to reduce the stock thus bring it back to a balanced equilibrium.

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