CHAPTER 12
Exogenous Variables

Variables that are generated independently (exogenous variables) of the system described by the model equations can properly be used as test signals for a model. As such, they allow us to see how the internal system of the model reacts to a particular kind of behavior pattern in the environment external to the system. An independent variable is used as if the response of the system under study had no coupling back to the independent variable; only those questions can be explored for which the assumption of independence is sufficiently valid. Seldom will more than a single exogenous variable be justified (other than random-noise variables, which can be considered as internal to the decision policies of the model). Using more than one exogenous variable implies a rather unlikely condition that the exogenous variables are interlocked by control mechanisms between themselves but all are free of interlocking ties with the variables of the system under study. The purpose of an exogenous variable is not to create more realistic model behavior but to set arbitrarily the external conditions under which the system is to be observed.

OPEN and closed models have been mentioned in Section 4.1. The closed model represents a self-contained system without connection to external (i.e., exogenous, or independent) inputs. Exogenous variables are those whose values arise independently of the internal variables of the model.

In exploring the dynamic characteristics of a model of a system, we shall often use an exogenous input as a test input.1 In so doing, we assume that the test input is itself independent of, and not affected by, what occurs within the variables that are represented in the model itself. In using the model, we can then validly explore only those questions for which the assumption of independence of the test input is correct. Where there is assumed but not actual independence, the model will fail to exhibit modes of operation that involve closed-loop coupling from the model variables to the exogenous variables and back into the model system of equations.2 As discussed in Section 10.6, coupling that appears very slight can sometimes produce dramatic effects on system performance if the proper time-phase, direction, and amplifying relationships exist.

It has sometimes been the practice in formulating econometric models3 to use several time

____________________
1
For example, the step function or the seasonal fluctuation or the noise was used as an assumed test input in the illustrations of Chapter 2.
2
For example, in Figures 2-2 through 2-8 in Chapter 2, we assumed that retail sales were independent of what might happen within the production-distribution system. Clearly this assumption is of limited validity, and the explorations had to be restricted to certain of the internal characteristics of the distribution chain itself. When in Figures 2-10 and 2-11 retail sales became affected by internal conditions in the distribution chain, new modes of system behavior appeared and could be explored.
3
See Klein (Reference 9), pages 2, 3, 38.

-112-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited page

Bookmark this page
Industrial Dynamics
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this book
  • Bookmarks
  • Highlights & Notes
  • Citations
/ 466

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.