Component Strategy….Burns and Ulgen.…July 2002, Palerimo, Italy… A Component Strategy for the Formulation of System Dynamics Models James R. Burns Jerry S. Rawls College of Business Administration Texas Tech University Lubbock, Texas 79409 (806) 742-1547 jimburns@ttu.edu Onur Ulgen Industrial, Manufacturing and Systems Engineering Department University of Michigan—Dearborn 4901 Evergreen Dearborn, Michigan 48128 ulgen@umich.edu Abstract --A component strategy to the development of system dynamics models is described. The approach concentrates on the formulation of the Forrester stock and flow diagram, and incorporates the concept of an interaction matrix to assist in the formulation of such models. The interaction matrix, together with an explicit sequence of steps for model development, are described. This description is followed by applications to illustrative problems. The strategy facilitates the determination of the quantities to be included as well as the existence of connectors between the quantities and the identities of the quantities and connectors. The paper is accompanied by a companion article [3] in this proceedings that formally derives the interaction matrix. The advantages of a component-based approach to model development include 1) reuse of the components, 2) diminished dependence upon the competence of the model-builder for the creation of quality models, 3) greater opportunity for managers/policy makers to build their own models from components rather than from scratch, and 4) a development strategy that can be partially automated. 1. Introduction A modular, component-like approach to the formulation of system dynamics models is not by any standard a new concept. Its use is evident in the many classic models of yesteryear- see Forrester [6, 7, 8, 9], and Goodman [11]. Credence to the modular, component-based approach is given by the multi-view approach taken by Eberlein’s VENSIM tool [4]. Eberlein’s “molecules” (available on the Vensim website) also provide a component-based approach to model development that is focused on reuse. Barry Richmond’s identification and description of generic structures and sub-structures (published in the STELLA manuals [22]) is strongly supportive of a component-based approach as well. The component strategy has been advocated by Fitz and Hornbach [5] as a very utilitarian and intelligent method for formulation of system dynamics models. The main objective of the present paper is to make explicit the principles and concepts inherent within the component procedure while simultaneously inserting additional detail into the approach.