Vensim software work required for 3 students 3 copies

Dr. Daniel Xing ([email protected])

EBUS-504

Operations Modelling and Simulation

Build your first SD model

University of Liverpool

Management School,

UK

Agenda

Model description (Vensim ®)

•Causal Loop Diagram

•First model – Getting involved with Vensim

•Model formulations

•Results analysis / Graphs

•Causal loop diagram-based Model improvements

•Building up the new model

•Results and analysis, comparing previous results

•Customise graphs

•Generate equation information from the Vensim model

Description of system The company produce and sales prefabricated windows frames. In general,

the main behaviors that describes are the followings

•The production level is characterised by a RAMP function

•Company realized that sales, production, workforce and inventory are relevant.

The dynamics of the system can be defined by the following characteristics

•Items produced go into inventory (Without production, inventory will never go up. )

•Items are sold from the inventory (Without any inventory, there is no possible sales)

•Without any workforce, there is no production.

•If sales goes up the company tries to expand production (Sales impact target

production)

•Target production impacts target workforce level.

• Productivity impacts production and target workforce level.

• Considering target workforce level and work level, company can decide net hire

rate.

• There is a time to adjust workforce. You cannot get new workforce immediately.

Causal loop diagram

From the system description, the preliminary causal loop diagram can be

drawn as follows

Vensim model of the system

Tips for building up the Vensim Model ;

•When production occurs, goods are not immediately sold.

•They are stored in an Inventory until a sale occurs.

•Higher sales will result in higher production through other variables

INVENTORY: It is a Level (Stock) variable: Flow In and Flow Out

WORKFORCE: It is a Level (Stock) variable. More people make more products

PRODUCTION, SALES, NET HIRE RATE: They are all rate variables as they flow

in or out of Stock variables

TARGET PRODUCTION, TARGET WORKFORCE, PRODUCTIVITY: Ordinary

variables

BEHAVIOURAL RELATIONSHIPS

•Production is proportional to workforce

•Net hire rate depends on the workforce value

•Production is to be affected by a productivity rate

First model – Initial Vensim model POPULATION BEHAVIOUR

First model – Initial Vensim model POPULATION BEHAVIOUR

First model – Initial Vensim model POPULATION BEHAVIOUR Parameters of the system;

• Initial value of inventory : 300 units

• Sales : The sales amount is 100 units for 20 months. After 20 months, it

is 150 units

• Productivity is 1

• Time to adjust workforce level is: 10 months

• Initial workforce level: 100 workers

Equations;

• Inventory = Production – Sales

• Target Production = Sales

• Target Workforce = Target Production / Productivity

• Net hire rate = (Target Workforce – Workforce)/Time to adjust workforce

• Production = Workforce * Productivity

First model – Initial Vensim model POPULATION BEHAVIOUR

Results

Quiz 5: Vensim modeling for production

management

Question 1: Produce same model in Vensim and test

the same model for an initial of 30 workers. How

does production, workforce and inventory profile look

like?

Question 2: Carefully analyse the results from the

model. Check production, workforce and inventory

graphs. Are results correct? Is there any fundemental

error in the model? If so, what is it?

Dr. Daniel Xing ([email protected])

EBUS-504

Operations Modelling and Simulation

Build your first SD model

University of Liverpool

Management School,

UK