Application of System Dynamics to Evaluate the Social and Economic Benefits of Infrastructure Projects

Nguyen, Tiep; Cook, Stephen; Ireland, Vernon

doi:10.3390/systems5020029

Cited by 39 publications

(19 citation statements)

References 39 publications

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“…The model describes the main characteristics of a farm in a dynamic form and evaluates the impact of decisions on a farm's future performance. The system dynamics approach allows evaluating a "what if" analysis [11,76]. The management flight simulator enables the ability to design, test, and evaluate the impact of various scenarios and strategies.…”

Section: The Bottom Right Part Ofmentioning

confidence: 99%

Traps and Opportunities of Czech Small-Scale Beef Cattle Farming

et al. 2019

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Small farmers represent a majority of the European Union (EU) farming sector and are considered the cornerstone of both the current and future sustainable EU agriculture. The dynamic complexity of livestock systems hinders the understanding of its behaviour, as well as recognizing the causes of problems and sources of resistance to applied policies and strategies. Livestock system behaviour needs to be understood in order to find leverage points and identify efficient solutions. The presented study depicts issues of small-scale beef cattle farmers in the market environment from a systemic perspective. The common complexity of managing a company increases with biological processes characterized by very long time periods, especially in the case of beef cattle farming. The scenarios analysed by the computer simulation model presented in the study evaluate the benefits of basic diversification into meat processing and a farm-to-table approach. The direct contact of the farmer with the final consumers represents increased demand and requirements on farmers’ entrepreneurship; nevertheless, such a strategy is a significant growth driver that allows faster maximisation of the farm’s output, accelerates the return of the investments, strengthens the market position of the farmer, and increases the farm’s sustainability.

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Section: The Bottom Right Part Ofmentioning

confidence: 99%

Traps and Opportunities of Czech Small-Scale Beef Cattle Farming

et al. 2019

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“…However, it represents a good source of complex diagrams that can be used for the purpose of this study. Mostly, the final product of the group diagram development is a complex model with many variables and even more links included (see [56,57]). The main reason for this is grounded in methods applied for grouping together single diagrams [58].…”

Section: Resultsmentioning

confidence: 99%

A Method for Simplification of Complex Group Causal Loop Diagrams Based on Endogenisation, Encapsulation and Order-Oriented Reduction

Bureš

2017

Systems

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Abstract:Growing complexity represents an issue that can be identified in various disciplines. In system dynamics, causal loop diagrams are used for capturing dynamic nature of modelled systems. Increasing complexity of developed diagrams is associated with the tendency to include more variables into a model and thus make it more realistic and improve its value. This is even multiplied during group modelling workshops where several perspectives are articulated, shared and complex diagrams developed. This process easily generates complex diagrams that are difficult or even impossible to be comprehended by individuals. As there is a lack of available methods that would help users to cope with growing complexity, this manuscript suggests an original method. The proposed method systematically helps to simplify the complex causal loop diagrams. It is based on three activities iteratively applied during particular steps: endogenisation, encapsulation and order-oriented reduction. Two case studies are used to explain method details, prove its applicability and highlight added value. Case studies include the simplification of both original group causal loop diagram, and group diagram adapted from a study already published in a prestigious journal. Although the presented method has its own limitations, meaningfulness of its application in practice is verified. The method can help to cope with the complexity in any domain, in which causal loop diagrams are used.

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“…Qualitative modeling (causal loops diagram) can improve the conceptual system understanding. Quantitative modeling (stock-and-flow models) enables the investigation and visualization of the effects of different scenarios within the simulation model [37]. Figure 2 presents the main steps of SD modeling.…”

Section: System Dynamics Modeling a Overview Of System Dynamicsmentioning

confidence: 99%

Application of Real Options on the Decision-Making of Mining Investment Projects Using the System Dynamics Method

Liu

et al. 2019

IEEE Access

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Estimating the valuation of mining projects has great significance for investment decisionmaking. Since the existing valuation methods are not appropriate for mining projects affected by various uncertainties over the long term, this paper presents a hybrid investment evaluation model that is based on real options and system dynamics for mining projects. To address uncertainties and managerial flexibilities that are contained in mining projects, the model integrates the static net present value calculated by traditional discount cash flows and the real options value generated by the Black-Scholes model into the total value of mining projects. Subsequently, the model applies system dynamics modeling to analyze the dynamics of the complicated mining operation system, quantify its variables and interactions, and estimate its volatility, which enables a more accurate real options valuation. A realistic case of the Hongwei uranium deposit in China is the basis for the presented numerical illustration of the model. The findings indicate that investors are prone to losing an opportunity to invest if they only rely on traditional discount cash flows' methods, because the value of the project calculated by discount cash flows is −175.59 million yuan that under zero. However, the results obtained from the method proposed in this paper suggest that the project has a value of 327.65 million yuan.INDEX TERMS Decision making, estimation, modeling, real options, system dynamics.

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Application of System Dynamics to Evaluate the Social and Economic Benefits of Infrastructure Projects

Cited by 39 publications

References 39 publications

Traps and Opportunities of Czech Small-Scale Beef Cattle Farming

Traps and Opportunities of Czech Small-Scale Beef Cattle Farming

A Method for Simplification of Complex Group Causal Loop Diagrams Based on Endogenisation, Encapsulation and Order-Oriented Reduction

Application of Real Options on the Decision-Making of Mining Investment Projects Using the System Dynamics Method

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