Tutorial 2 – Q3 Answers

IE2141 Systems Thinking and Dynamics

Department of Industrial Systems Engineering and Management (ISEM)

College of Design and Engineering
National University of Singapore

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 1
 Q3 – Behavior and Structure of a System
a) Identify FOUR key state variables to be observed in the system. Choose a proper
time horizon and draw BOTGs for their hypothesized behaviors.

Sample Answer:
Steady state Goal seeking Goal seeking
Heroin stock

Input Number of drug bust

variable
Heroin price
Revenue-raising crime

0 1 2 3 4 Months
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 2
 Q3 – Behavior and Structure of a System
a) Identify FOUR key state variables to be observed in the system. Choose a proper
time horizon and draw BOTGs for their hypothesized behaviors.

Sample Answer:
 Number of drug busts, heroin price, heroin stock, number of revenue-raising crimes are
selected to be observed.
 Time horizon is selected as to span over a few months.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 3
 Q3 – Behavior and Structure of a System
b) Describe the behaviors of the key state variables on the BOTGs at different
stages. Formulate a hypothesis that explains the dynamics of the problem.

Sample Answer:
 Before drug busts increase, all variables remain at steady state, as the heroin market has reached a
balance between stock level, price, usage and importation.
 When drug busts start to increase, the balance in the market is disrupted, therefore all other state
variables appear goal seeking behaviors for reaching a new balance, via increased price and
importation.
 When drug busts drops, all other state variables appear goal seeking behavior on reversed direction
for restoring the balance before the increasing, via reduced price and importation.
 The number of revenue raising crimes is proportional to the heroin price.
 Therefore, increased drug busts increases revenue raising crimes.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 4
 Q3 – Behavior and Structure of a System
c) Develop a causal loop diagram (CLD) that is possible to generate the behavior
shown on the BOTGs. What are the basic mechanisms (causal relationships, and
feedback loops) of the system? Number of
Drug Busts
Heroin Importation
Sample Answer: + +
-
 We start with drug busts which reduces heroin stock. Heroin Stock B
Heroin Use
With heroin stock reduced, this will trigger its price -

to go up. Due to price increase, more money is now -

Price of Heroin
needed to support the drug addicts’ habit. This leads Number of Revenue
Heroin Demand Raising Crime
to more crimes. +
+
 There is one balancing loop: Heroin Stock (-)→ Price of Heroin (+)→ Money Needed to
Heroin Importation (+)→ Heroin Stock. It leads to a “goal-seeking” Support Addicts' Habit

behavior towards a higher heroin price when drug busts increase. +

Remarks: Compare it with sample

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
answer for Tutorial 1 Q3.b 5
 Q3 – Behavior and Structure of a System
d) What are the assumptions (on the variables and their causal relationships)?

Sample Answer: Number of

Drug Busts
Heroin Importation
 Heroin demand does not react immediately to +
+
a shortage of supply because of heroin’s -
Heroin Stock B
addictive nature – hence demand is assumed Heroin Use -
constant.
-
 Decrease in stock level leads to price increases. Price of Heroin
Number of Revenue
Heroin Demand Raising Crime
+
+
Money Needed to
Support Addicts' Habit

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 6
THANK YOU
The preparation of this module has been made possible by the
support from IE2141 teaching team, and the past teaching
materials developed by A/Prof. Aaron Chia.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 7