SENSITIVITY

ANALYSIS
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 A technique used to determine how different values of an
independent variable will impact a particular dependent
variable under a given set of assumptions. This technique is
used within specific boundaries that will depend on one or
more input variables, such as the effect that changes in
interest rates will have on a bond's price.
 Sensitivity analysis is a way to predict the outcome of a
decision if a situation turns out to be different compared to
the key prediction(s).

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 Create A Model
 Write A Set Of Requirements
 Design A System
 Make A Decision
 Do A Tradeoff Study
 Originate A Risk Analysis
 Want To Discover The Cost
Drivers
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 Uncertainty in various parameters used in Simulation
Models – Feedback loops, Probability Distributions etc.
 Values of these parameters cannot be estimated precisely
due to data availability or time constraints.
 Less Reliable Models: tested for their sensitivity to the
changes in model components.
 Components, to which simulation results are sensitive, need
more
attention than other parts of the model.
 Parameter sensitivity of the model can be compared
with the information from real system.
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 The genetics studies on the pea by Gregor Mendel, 1865.
 The statistics studies on the Irish hops crops by Gosset
(reported under the pseudonym Student), ca 1890.

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 The problematic behavior is tried to be explained by
system structure.
 The behavior pattern of the system is the main interest of
analysts rather than the specific values of the variables.
 Therefore, a behavior-pattern-oriented approach should be
applied to sensitivity analysis
 It is difficult to analyze oscillations with correlation based
statistical methods using the values of model variables, hence
this approach is more significant

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 System oscillation is the characteristic symptom of
negative feedback structures in which the information
used to take goal- seeking action is delayed

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 In the study conducted by Ford (1990), sensitivity of results are
measured by partial correlation coefficients which indicate the
strength of linear relationship between two variables after the
effects of other variables are removed
 Ford and Flynn (2005) propose Pearson correlation coefficients
instead of the partial ones for simpler sensitivity analysis
procedure. This method is named as screening
 Sterman (2000) proposes that numerical sensitivity can be used
for simulation models which work with great numerical
precision such as models in physics or light simulators.
 Policy sensitivity is designed as the changes in the optimal policy
when parameters values change (Moxnes, 2005; Sterman,
2000). 9
 Behavior measures are the subject matter of system dynamics
studies in which the problematic behavior is analyzed with
respect to its structure.
 For instance a population in an isolated area, which follows a boom
and bust behavior, can be explained by depleting resources and
vanishing birth rate.
 Sensitivity of the behavior to the model parameters can be
analyzed by using peak or equilibrium level of the behavior
pattern.
 Behavior pattern sensitivity aims to explore the effect of varying
model
inputs on the specific behavior measures.
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 SEPARATE

DIFFEREN
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Behavior
R
Measure
MODES
For Each
CHOOSE Are
DETERMIN MAKE Different
THE
ANALYSIS EXPLORE there
EARAMETER
P
PARAMETERS
RANGES
SENSITIVITY POSSIBLE any
OF THE Differe
AND
MODEL SIMULATION BEHAVIO nt MAK
DISTRIBUTIO
RS Behavi E
REGRESSIO
N S
or N ANALYSIS
Modes FOR EACH
MODE
Behavior
Pattern
Measures
for
 Correlation & Screening Method
 Ford and Flynn (2005) suggest Pearson correlation in order to conduct
quick
sensitivity analysis, called screening.
 In this method, correlation coefficients between the output and each
parameter are calculated and plotted against simulation time
 Parameters that have high correlation with output variable are
concluded to be the high sensitivity ones
 Regression Method
 Another convenient method assuming linear relationship between
variables is regression.
 In this method, an equation that minimizes the sum of squares of
residual terms
is calculated by using ordinary least squares algorithm (Draper and 1
Smith, 1998). 2
 Statistical Analysis (ANOVA) of Clusters in Scatter Plots
 Another efficient way of dealing with nonlinearity between system
output and parameters is using statistical analysis of clusters in which
output variable y is plotted against each parameter xj and this plot is
subject to statistical analysis after it is divided into several clusters
(Kleijnen and Helton, 1999a).
 This method is a more general way of one-variate sensitivity analysis
since it does not have the linearity assumption between dependent
and independent variables, i.e. this is a statistical model independent
method" (Saltelli et al., 2000).
 The scatter plot for each parameter is subject to statistical analysis in
order to detect any non-random pattern.

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 Supply chains are good examples of material delay formulations that are
rigorously discussed in system dynamics literature.
 Supply chains consist of a stock and flow structure for the acquisition,
storage and conversion of inputs into outputs and the decision rules
governing these flows
 Include negative feedback loops that create corrective action once
discrepancy arises between the stock and its desired level
 The transformation process in each supply chain takes some amount of
time, i.e. there is a time delay in every supply chain structure.
 Interaction between negative feedback loops and the time lag may yield
oscillations 1
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 OSCILLATION

 Oscillations are cyclic behavior patterns which are difficult to analyze with
standard statistical techniques, such as screening.
 So, sensitivity analysis of oscillatory models should focus on the pattern measures
of these behavior modes
 Common measures of an oscillatory pattern are period, first amplitude and
amplitude slope.
 Period of an oscillation is amount of time between two successive peaks or
troughs.
 This pattern measure indicates how much the system oscillates under certain
circumstances.
 One of the critical steps in pattern sensitivity analysis procedure is the estimation of 1
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pattern measures for each simulation run.
 In this thesis, periods are estimated by autocorrelation function in BTSII
which is a validation tool for behavior pattern tests of system dynamics
models.
 According to the results of regression analysis, stock adjustment time is
the most
important parameter of the model.
 The second important parameter is acquisition lag which is the average
time lag in supply line. Increasing values of this parameter yields longer-
period oscillatory systems.

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