1. Thursday, April 29, 2004 1 Teaching Systems Thinking in Spreadsheets Mohammad Mojtahedzadeh Attune Group, Inc Deborah Upton Stonehill College

2. Thursday, April 29, 2004 2 Modeling Spectrum: Spreadsheet System Dynamics Simple Manipulation Complex Formulation Build on Simple manipulation to arrive at Complex formulation Exposé

3. Thursday, April 29, 2004 3 Modeling Spectrum: Spreadsheet System Dynamics ► Local in time and space ► Global in time and space ► One way linkages ► Mathematical Nonlinearity ► Circular Causality Simple Manipulation Complex Formulation ► Data-Point Nonlinearity ► Stock-and-Flow ► Hidden relationships ► Visualization of structure Exposé

4. Thursday, April 29, 2004 4 The Spreadsheet Approach: Hidden relationships:

5. Thursday, April 29, 2004 5 The Spreadsheet Approach: Hidden relationships Makes it difficult to understand, analyze and, communicate…

6. Thursday, April 29, 2004 6 Tree Diagrams of Precedence make the connections among the CELLS visible Exposé in MS Excel:

7. Thursday, April 29, 2004 7 The Spreadsheet Approach: Local in Time and Space Working with numbers (not equations)  One relationship, one time period  No clear model boundaries …. makes it easy to master! …. but inadequate for modeling complexity!

8. Thursday, April 29, 2004 8 The Spreadsheet Approach: 1000 – 95.26 = ? Savings (Jan) Purchases (Jan) Local in Time and Space

9. Thursday, April 29, 2004 9 ► Translate cell reference formulas to equations: Savings (t) = Savings (t - 1) - Purchases $1,000 $95.26 February January From cell reference formulas to equations ► Reconstruct the structure

10. Thursday, April 29, 2004 10 Tree Diagrams of Causal Drivers make the connections among the VARIABLES visible Exposé in MS Excel:

11. Thursday, April 29, 2004 11 Tree Diagrams of Causal Drivers Exposé in MS Excel Tree Diagrams of Precedence Two distinguished tree diagrams

12. Thursday, April 29, 2004 12 The Value Proposition: Simple Issues Complex Issues Short term Long term Local(isolated) Global(interconnected) Spreadsheet System Dynamics Can we build on what people know?

13. Thursday, April 29, 2004 13 The Value Proposition: Exposé allows the user to interact with Numbers and Equations any time in the process of modeling Sometimes it might be easier to start with Numbers and then move to Equations From Numbers to Equations and back again

14. Thursday, April 29, 2004 14 Example: From Numbers to Equations and back again 1000 – 95.26 = ? Savings (Jan) Purchases (Jan) Sometimes, wouldn’t be easier to start with…

15. Thursday, April 29, 2004 15 ….. in order to arrive at…..? Savings = Integ( purchases, 1000) Example: From Numbers to Equations and back again

16. Thursday, April 29, 2004 16 The Spreadsheet Approach: One way linkages: Lack of focus on integration point and feedback processes makes spreadsheets inadequate to model dynamic systems

17. Thursday, April 29, 2004 17 Exposé in MS Excel Make integration points visible Launch Exposé with Examples from the book

18. Thursday, April 29, 2004 18 Exposé in MS Excel Identify and work with feedback processes Circular Causality Launch Exposé with Examples from the book

19. Thursday, April 29, 2004 19 Exposé in MS Excel Allows data-point non-linearity Launch Exposé with the MARKET GROWTH MODEL

20. Thursday, April 29, 2004 20 Exposé in MS Excel Do “what if” analysis more often Launch Exposé perhaps with Market growth model

21. Thursday, April 29, 2004 21 Not The End…. Just The Beginning…