From the course: Supply Chain Beyond the Basics: Building System Dynamics Models
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Scenario planning
From the course: Supply Chain Beyond the Basics: Building System Dynamics Models
Scenario planning
- [Instructor] Let's discuss how system dynamics is incredibly useful for scenario planning and supply chain management. Scenario planning is a strategic method that helps organizations prepare for uncertainty by considering different possible futures. System dynamics allows us to create detailed models of our supply chains, and that allows us to simulate these various scenarios and understand how changes in variables could impact the outcomes. For instance, we can use a stock and flow model to analyze the effects of a sudden increase in demand or a supply disruption. By understanding these dynamics, we can develop strategies to manage these situations more effectively. One of the key benefits of system dynamics is its ability to help us visualize feedback loops; those cycles that can either reinforce changes or stabilize the system. In scenario planning, visualizing these loops helps us identify potential failure points or intervention opportunities because they show where small…
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