Högskolan i Skövde

This report is a literature review of System Dynamics (SD) and simulation, with enough information so the receiver can form a mental model of his own of what SD is.

It started in the 1950s by Jay W. Forrester at the Massachusetts Institute of Technology, a devoted man that through his career always sought for practical applications of theory and gained skills. The key in why this new way of approaching problems in complex systems was its strength in capturing the dynamics, through the use of a computer to run a modeled system for a set of time and experimenting on which variables to modify or rearrange. SD methodology uses the theory of information feedbacks (i.e. closed loop structures), and the structure is based on the decision making processes or policies that interrelate in ways in the system. The model is valid if it shows the same dynamic behavior as the real system.

In the report you will find some history and background to SD and the contents of the methodology, some application areas and two models; of which simulation is performed, one made by Jay Forrester and one very simple made by Gary Linnéusson.

Main purpose with this review was to find out if SD could serve as a tool for simulating organizational development. If it can, further research on how will be part of a doctoral study project within CAPE, an Industrial Graduate School in Advanced Production Engineering. This due to that Arkivator Falköping AB is interested in to conduct an attendee in that School which would research on: "developing a method that would support management in decisions to develop their organization". The result of this review shows that SD can be a tool to treat that issue, one of very few tools that consider interrelations and interactions within organizational systems.