OPM 591


Intensive Schedule: October 30-31, November 6-7, 14 (8:00 am – 5:00 pm)

 INSTRUCTOR:  Craig W. Kirkwood

This course focuses on system-oriented methods to understand and improve management processes. You will learn how to construct and use causal loop diagrams, stock and flow diagrams, and system dynamics simulation models to investigate "bugs" in business systems resulting from cross-functional interactions and feedback. You will study such issues as the impact of capital investment on market growth, management of fluctuating workloads, market growth and stagnation, new product development, product lifecycles, and project management.


Your course grade will be based entirely on homework. Because the material in this course is cumulative, it is important to keep current and do the reading and homework when it is assigned. The following are the homework policies for this course:

  1. To receive full credit for a late homework assignment, you must reach a written agreement with me prior to the due date regarding when and how the assignment will be submitted. (This can be done by email or fax.)
  2. Length, by itself, is not a virtue in homework solutions. Some people hand in assignments with many pages, each of which has only a small Vensim or People Express diagram. Both these packages support Clipboard copying, and please compact your homework by copying Vensim and People Express outputs into a word processor file.
  3. I regularly check my email and voice mail even if I am not in my office. You can also contact me at home before 9:00 p.m. if you have questions.
  4. Homework may be submitted by the due date using email attachments or fax without a written agreement. If you submit by email, send Word, PowerPoint, or PDF files. For large files, please use zip compression. I will confirm back to you by email that I have received the assignment. Please confirm prior to submitting a homework assignment as an email attachment that you can send email attachments through your company firewall.
  5. Please notify me by email that you have sent a fax, and I will confirm back to you by email that I have received it.






Feedback and causal loop models:

  • Counterintuitive process behavior: Quality programs
  • Causal loop modeling
  • System archetypes

People Express management flight simulator

Sterman, et al (1997) [Optional]; [IBPA], Ch. 1, App. A; Kirkwood (1998b), pp. 1-9; Kirkwood (1997); Sterman (1988); Whitestone and Schlesinger (1995);


People Express management flight simulator (con’t)

Stock and flow diagrams:

  • Stock and flow diagramming
  • Generic infrastructures

The Beer Game

[IBPA], Ch. 2, App. B; Kirkwood (1998b), pp. 10-11


System dynamics models:

  • Basic feedback structures and modeling
  • Workforce, inventory, and oscillation
  • New product dynamics
  • Delays, smoothing, and forecasting
  • Decisions

[IBPA], Ch. 3-5, App. F, Ch. 6-7; Kirkwood (1998b), pp. 11-15; Kirkwood (1998c)


System dynamics models (con’t):

  • Capacity, market growth, and competition
  • Nonlinearities
  • Initial conditions
  • Project dynamics

Modeling workshop

[IBPA], Ch. 8-9, App. C, D, G, H; Kirkwood (1998b), pp. 16-18; Cooper (1993)



The modeling process

  • Modeling steps
  • Parameter estimation

Organizational learning:

  • Production-distribution example: The beer game revisited
  • Learning in complex systems

[IBPA], App. E; Randers (1980); Graham (1980); Hamilton (1980) [Optional]; Sterman (1994); Meadows (1980)


  1. K. G. Cooper, "The Rework Cycle: How It Really Works… And Reworks…," PMNetwork, Vol. 7, No. 2, pp. 25-28 (February 1993).
  1. A. K. Graham, "Parameter Estimation in Systems Dynamics Modeling," in J. Randers, Elements of the System Dynamics Method, MIT Press, Cambridge, MA, 1980.
  2. M. S. Hamilton, "Estimating Lengths and Orders of Delays in System Dynamics," in J. Randers, Elements of the System Dynamics Method, MIT Press, Cambridge, MA, 1980.
  1. C. W. Kirkwood, "Integrated Business Process Analysis: A System Dynamics Sourcebook," 1998a. (Designated as [IBPA] in the schedule.)
  1. C. W. Kirkwood, "User’s Guide: People Express Management Flight Simulator," 1997.
  1. C. W. Kirkwood, "Vensim PLE Quick Reference and Tutorial," 1998b.
  2. C. W. Kirkwood, "New Product Dynamics: Illustrative System Dynamics Models," 1998c.
  3. D. H. Meadows, "The Unavoidable A Priori," in J. Randers, Elements of the System Dynamics Method, MIT Press, Cambridge, MA, 1980.
  4. J. Randers, "Guidelines for Model Conceptualization," in J. Randers, Elements of the System Dynamics Method, MIT Press, Cambridge, MA, 1980.
  1. J. D. Sterman, "People Express Management Flight Simulator," 1988.
  1. J. D. Sterman, "Learning In and About Complex Systems," System Dynamics Review, Vol. 10, pp. 291-330 (1994).
  1. J. Sterman, N. Repenning, and F. Kofman, "Unanticipated Side Effects of Successful Quality Programs: Exploring a Paradox of Organizational Improvement," Management Science, Vol. 43, pp. 503-521 (1997). A version of this paper is on the world wide web at the following URL: http://web.mit.edu/jsterman/www/ADI/ADI.html [Optional reading].
  1. D. Whitestone and L. A. Schlesinger, "People Express (A)," Case 9-483-103, Harvard Business School, 1995. (8/5/98)