Lecture 3

SYSTEM
MODELLING
The Problem Situation

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Ade Aisyah Arifna Putri

 PROBLEM

Puzzles Problems Messes

No ambiguity Problems are situations No agreement about the core
The issues are entirely clear where it’s clear what the issue
The range of options is goal is, but not obvious how No way of knowing whether a
completely known to achieve it solution exists at all
Solving a puzzle involves Have several equally valid There is significant
using known methods or disagreement or uncertainty
solutions
techniques about what needs to be done
and why
 PROBLEM SITUATION
The problem situation is the context within
which the problem occurs.
It is the sum or aggregate of all aspects
that can or may affect or shape the problem
or issue of concern

The "problem situation" is like everything around the problem. So, when we talk about the
"problem situation," we're talking about everything that could change or affect how you solve that
problem.
 Dissatisfied
PROBLEM OWNER Does not like what is happening
Have Goals/ Target to be met
Decision Maker/ Problem Owner

Capable of Judging
Know how to assess the outcomes to
decide if they're good enough

Has Control
Have the power to influence certain parts
of the problem that can impact whether
you achieve your goals or not
 ELEMENTS OF A PROBLEM

Decision Maker Decision Criterion Control Inputs

Decision Maker’s Performance Measure Context

Objectives
 Decision Maker Control Inputs
Sawmill Owner-Manager Types & Quantities of Logs
Types & Quantities of
Products to Produced
Objective
How to process the logs
Achieving a satisfactory return on
investment
Saw Mill Example

Achieving highest profit

Context
Decision Criterion Current Location of the Saw
Achieving a rate of return of at Mill
least 18% before taxes, is Potential sources of raw
considered satisfactory by the materials
owner
Products’ Demand
Maximize Profit

Performance Measure
The ratio of net profit over the
owner’s investment
 OBJECTIVE & DECISION CRITERION
Decision Criterion = the rule used for
judging whether or how well the objective
has been achieved

Minimize “the sum of all times to reach

every load location in town.”
Objective Minimize “the sum of the squared
Find the “best” location times”
“best” = reaching any emergency Minimize “the maximum time between
as quickly as possible the ambulance service and any
locations in the city”
 STAKEHOLDERS
Problem Owner Problem Users
Problem owners are the people who Problem users are those who use the
have control over certain parts of a solution chosen by problem owners or
problem situation. They make carry out their decisions.
decisions about which actions to take They don’t have the authority to
ex: CEO, Plant Manager change the decisions or make new
ones
ex: workers, operators
 STAKEHOLDERS
Problem Customers Problem Analysts/ Solvers
Problem customers are the people, The problem analysts or solvers, who
groups, or even other living beings that analyse the problem and develop a
are affected by the outcomes of solution for approval by the problem
decisions and solutions. owners
They experience the results of the
decisions made by problem owners and
executed by problem users.
ex: customers, future generations, local
community

Those terms refer to the roles that people assume and not to
the people themselves. one person may assume more than one
role simultaneously or consecutively
 Problem Owner
STAKEHOLDERS Call Centre Manager

Problem User
Call Center Services

Technical Supervisor

Problem Customer
People Placing Calls
Emergency Services Responding to
These Calls

Problem Solvers
Hired Analyst
 MIND MAPS

Mind maps can easily be used for capturing and

consolidating the thoughts and ideas of several
people, borrowing rules of brainstorming.
This is an effective way to help bring about a
consensus among the participants on the problem
situation.
It can be ‘read’ in any direction

Mind map of dilemma for going to work by bicycle

RICH PICTURE DIAGRAMS

The focus is on capturing ideas, not artistic

quality
A rich picture is not static. As you learn more,
discuss with others, or see new perspectives, you
can add to, reorganize, or even redraw your rich
picture.
Unlike a system diagram, a rich picture doesn’t
assume organized interconnections. It avoids
imposing a structured view too early, which helps
keep the exploration open-ended until you have
fully understood the situation.

Rich picture of dilemma for going to work by bicycle

 Decision Maker Alternative Courses of Action
Elly Schuhmacher The combination of: size of discount
offered to customers;
Objective form of just-in-time procurement policy;
Nu Wave Case

Generate enough funds to purchase imaginative model designs to absorb

new equipment excess RM stock from previous seasons;
express in-freighting to avoid shortages;
Decision Criterion no safety stocks for just-in-case second
Funds generated are at least equal to production runs.
140,000
The narrow system focuses on the The wider system considers external factors
immediate factors that directly influence beyond the company’s immediate control but
production and market response. still relevant to its operations.

Boundaries for Narrow Boundaries for Wider

System of Interest System of Interest
Old and new production Assumptions: competitors will not take
output capacity actions that could negatively impact the
cost structure business
potential demand Assumptions: financial institutions (like
shoe wholesale prices. banks) are willing to provide support if
there’s a financial gap, such as offering a
mortgage on equipment

Nu Wave Case
 COGNITIVE MAPPING
a cognitive map only captures the subjective, personal perception of an individual

If the first pole of Construct 1

leads to the first pole of
Construct 2, the arrow
between them is
straightforward without any
additional markings.
...
... = rather than
Preffered Pole Undesirable Pole
Keep Complete Control Over
Share It
Firm
If the second pole of a construct leads to a new
construct, a negative sign (–) is attached to the
tail of the arrow.
This suggests that starting from the second
pole, the relationship moves in a direction that
Elly knows that she can easily double sales with
connects it to another construct in a non-linear little additional effort [7]
or less direct way. if she gets new machinery more suitable for her
style of goods [8].
Can she wait that long? Competition may grab the
opportunity and step in to fill her potential
market [15].

If the first pole of one construct leads to the

second pole of another construct, a negative
sign (–) is placed on the head of the arrow.
REFERENCES
Jafari, M., Hesamamiri, R., Bourouni, A., & Ir. (2008). An Interpretive
Approach to Drawing Causal Loop Diagrams. ResearchGate.
https://www.researchgate.net/publication/228456408_An_Interp
retive_Approach_to_Drawing_Causal_Loop_Diagrams
Pidd, M. (2004). Systems Modelling. Wiley.
McNickle, D., & Daellenbach, H. (2005). Management Science.
Palgrave Macmillan.
 ASSIGNMENT
For the final project, each group will work on solving a problem derived from a real-world case study,
utilizing a mathematical optimization model. The model is an improvement from the existing model
referenced in journal articles. Each mind map or rich picture diagram should encompass, but not be
limited to, the following:
1. System Components
2. Relationships Between Components
3. System Inputs & Outputs
4. Problem Stakeholders
5. 6 Problem Elements
6. Multiple Scenarios for Optimization
These mind maps or rich pictures will help visualize the problem's complexities, the system's
interdependencies, and the pathways to finding the most effective solution through optimization.

File name: Assignment 2_Group “X”_Class “X”

1 Page PDF File
Deadline: 24 Hours before the 2nd Meeting