REPLY Meaning of Stock/Level (SD6927)

[SDMAIL Jean-Jacques Laublé]

Posted by  Jean-Jacques Laublé <jean-jacques.lauble at wanadoo.fr>

Hi every body.

I use a soft variable if I feel that it is a useful addition to
the model: it means that it increases its usefulness.
This is the first consideration, whatever the technical
problems that it may generate.

It is unfortunately very easy and tempting to push a model
outside its interval of usefulness, which is limited and knowing the limit
is essential. SD can solve a part of many problems but rarely the totality. 

A second condition of using soft variable I follow, is that the soft variable
must depend in a large part from other hard ones. It is often expressed as
a ratio or a probability. Example, if I consider the trust of a client into the
quality of a product, I will eventually consider the willingness of the client
to fulfil all his needs with the considered product. This willingness will
eventually depend on the percentage of the past defect of the product.
This willingness is necessarily expressed as a ratio from 0 to 1.

So I will express the actual willingness depending from the percentage of defect
by a lookup and the willingness by a smooth of the actual and past willingness or
as a weighted moving average of the past willingness.
Using a smooth is mandatory if one wants to keep the willingness into
the 0,1 interval. One could use a simple accumulation with a
limiting capacity, but it does not represent what happens in the
reality.

I can make the willingness depend from other factors too and it will be
necessary to weight them. It is always possible to see the influence of
the weighting system on the objectives that summarize the efficiency
of the policies and use sensitivity analysis.

Regards.

Jean-Jacques Laublé Eurli Allocar
Strasbourg France 
Posted by  Jean-Jacques Laublé <jean-jacques.lauble at wanadoo.fr>
posting date  Tue, 15 Apr 2008 11:47:59 +0200