REPLY Policy paradox and SD (SD6682)

[SDMAIL Ford, David]

Posted by  "Ford, David" <dford at civil.tamu.edu>

I agree with Monte Kietpawpan that it is almost always much easier to
design a policy in an SD model than it is to implement it in practice
and that failing to include implementation aspects of policies in SD
models is problematic. However I think that including a policy in a SD
model without including the constraints, costs, side effects, etc. that
exist in practice for that policy goes against what SD considers good
modeling practice. Consider the simple policy of using overtime to bring
a late project back on schedule. It is relatively easy to model that the
amount of overtime increases with schedule pressure, but (for starters)
in practice there is a maxmimum amount of overtime possible, negative
overtime is almost unheard of, unit labor costs are higher for overtime,
and sustained overtime creates fatigue which increases rework and
reduces productivity. Good SD practice suggests that these are a part of
the policy structure in practice, as much as the response of overtime to
schedule pressure, and therefore should be included in the SD model
policy structure before the model can be considered structurally valid
with respect to the policy.  The overtime example also illustrates that
most good policies are endogenous and that endogenous nature should be
reflected in the SD model. Having said that, there are often exogneous
descriptors of the policy. For example, a first equation for an overtime
policy might take the form

target overtime = schedule pressure * sensitivity to schedule pressure

where the sensitivity to schedule pressure is an exogenous parameter
that reflects different managerial styles. 

As a final note, when I include implementation constraints, side
effects, etc. I am less sure than Monte Kietpawpan sounds that (at least
in my own work) I "know what policies can improve system performance".
That is what I often what I seek to learn. I hope, by doing so, to
change the social system for the better, one policy at a time. 

Best wishes, 

Dave Ford
Posted by  "Ford, David" <dford at civil.tamu.edu>
posting date  Mon, 10 Dec 2007 09:02:18 -0600