BUSINESS MODELING
TASKS FOR INDIVIDUAL ASSIGNMENT
METHODICAL INSTRUCTIONS FOR INDIVIDUAL ASSIGNMENT
PART I
MODELING AND SIMULATION WITH VENSIM
Step 1. Issue statement.
The issue statement is simply a statement of the problem that makes it clear what the purpose of the model will be. Clarity of purpose is essential to effective model development.
Developing a model of a system or process without specifying how the system needs to be improved or what specific behavior. is problematic is difficult. Having a clear problem in mind makes it easier to develop models with good practical applicability.
Step 2. Variable Identification.
Identify some key quantities that will need to be included in the model for the model to be able to address the issues at hand. Usually a number of these are very obvious. It can sometimes be useful just to write down all of the variables that might be important and try to rank them in order to identify the most important ones.
Step 3. Reference modes.
A reference mode is a pattern of behavior. over time. Reference modes are drawn as graphs over time for key variables, but are not necessarily graphs of observed behavior. Rather, reference modes are cartoons that show a particular characteristic of behavior. that is interesting. For example, a company's sales history may be growing but bumpy, and the reference mode may be the up and down movement around the growth trend. Reference modes can refer to past behavior, or future behavior. They can represent what you expect to have happen, what you fear will happen and what you hope will happen. Reference modes should be drawn with an explicitly labeled time axis to help refine, clarify and bound a problem statement.
Step 4. Reality Check.
Define some Reality Check statements about how things must interrelate. These include a basic understanding of what actors are involved and how they interact, along with the consequences for some variables of significant changes in other variables. Reality Check information is often simply recorded as notes (often mental notes) about what connections need to exist. It is based on knowledge of the system being modeled.
Step 5. Dynamic hypotheses.
A dynamic hypothesis is a theory about what structure exists that generates the reference modes. A dynamics hypothesis can be stated verbally, as a causal loop diagram, or as a stock and flow diagram. The dynamic hypotheses you generate can be used to determine what will be kept in models, and what will be excluded. Like all hypotheses, dynamic hypotheses are not always right. Refinement and revision is an important part of developing good models.
Step 6. Simulation Model.
A simulation model is the refinement and closure of a set of dynamic hypotheses to an explicit set of mathematical relationships. Simulation models generate behavior. through simulation. A simulation model provides a laboratory in which you can experiment to understand how different elements of structure determine behavior.
Construct a diagram describing the relationships between the variables under study using Vensim tools. Build a Causal Loop Diagrams, then Stock and Flow Diagrams.
PART II
CLUSTERING IN BUSINESS MODELING
Step 1. Select a broad area of study that interests you.
Step 2. Select a research problem.
Step 3. Chose the variables understudy.
Step 4. Provide cluster analisis based on the different performance indices (variables), create the tree diagram.
PART III
PERFORMING THE RESULTS OF THE MODELING
Perform. the results of your research in written report and make a presentation (in PowerPoint).