Structure of a
Dynamic System Model

A basic structure of alternating levels and flow rates seems to represent the nature of industrial management systems. The levels determine the decisions that control flow rates. The flow rates cause changes in the levels. These levels and rates make up six interconnected networks that constitute industrial activity. Five of these represent materials, orders, money, capital equipment, and personnel. The sixth, the information network, is the connecting tissue that interrelates the other five.

WE are now ready to discuss a type of model structure that is amenable to the objectives and principles outlined in earlier chapters. A very simple model framework will suffice. A particular model may become complex because of its size and wealth of detail, but its fundamental nature will still be one of alternating "levels" and "decisions," as will be outlined in this chapter.The form of a model should be such as to achieve several objectives. The model should have the following characteristics:
Be able to describe any statement of cause-effect, relationships that we may wish to include
Be simple in mathematical nature
Be closely synonymous in nomenclature to industrial, economic, and social terminology
Be extendable to large numbers of variables (thousands) without exceeding the practical limits of digital computers, and
Be able to handle "continuous" interactions in the sense that any artificial discontinuities introduced by solution-time intervals will not affect the results. It should, however, be able to generate discontinuous changes in decisions when these are needed.

6.1 Basic Structure

The preceding requirements can all be met by an alternating structure of reservoirs or levels interconnected by controlled flows, as shown in Fig. 6-1.

Figure 6-1 contains four essential features that will discussed separately:

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