Business Models

These models and simulations have been tagged “Business”.

Related tagsTechnology

 ​This model attempts to understand the behavior of average lifetime of companies in the S&P500 index. The reference mode for the model is a graph available at this link:  https://static-cdn.blinkist.com/ebooks/Blinkracy-Blinkist.pdf  (page 5) which was discussed in the System Thinking World Dis

​This model attempts to understand the behavior of average lifetime of companies in the S&P500 index. The reference mode for the model is a graph available at this link: https://static-cdn.blinkist.com/ebooks/Blinkracy-Blinkist.pdf (page 5) which was discussed in the System Thinking World Discussion forum.

Mergers & Acquisitions can be one of the reasons for older companies to be replaced with newer companies in the Index. With M&A of older companies, the empty slots are taken over by newer companies. However, overtime, these new companies themselves become old. With steady M&A, the stock of older companies decreases and stock of newer companies increases. The result is that average age of the companies in the S&P Index decreases.

The oscillations in the diagram, according to me, is due to oscillations in the M&A activity.

There are two negative feedback loops in the model. (1) As stock of new companies increases, the number of companies getting older increases which in turn decreases the stock. (2) As M&A increases, stock of older companies decreases which in turn decreases M&A activities.

Limits of the model

The model does not consider factors other than M&A in the increase in number of new companies in the Index. New companies themselves may have exceptional performance which will result in their inclusion in the Index. Changes in technology for example Information Technology can usher in new companies.

Assumptions

1. It is assumed that M&A results in addition of new companies to the Index. There could be other older companies too, which given the opportunity, can move into the Index. Emergence of new technologies brings in new companies.

 Bottom-Up Sales Forecasting for Startups     The purpose of this simulation is to demonstrate the implications of forecasting sales without consideration for how much it cost you to acquire a lead and how much you have available to spend. A common mistake in sales forecasting is to define your # of
Bottom-Up Sales Forecasting for Startups

The purpose of this simulation is to demonstrate the implications of forecasting sales without consideration for how much it cost you to acquire a lead and how much you have available to spend. A common mistake in sales forecasting is to define your # of expected sales leads based on your total market size and your assumption regarding the % of that market you can reach. 

This model demonstrates the forecasting impact to defining the # of expect leads based on how much it cost you to acquire a lead and how much you have available to spend. 

Important Variables:
1. [UseLAC?] (set to 1 to use the lead acquisition cost to define your reachable market; use 0 to set the reachable market to equal the total available market size)
2. LAC (should equal what it cost you to acquire a lead)
3. SalesMarketingBudget : how much you have available to spend on customer acquisition

Other Variables:
4. Price : Avg spending amount per new customer
5. Total Available Market : Total available market size
6. Conversion Rate : the % of your target market that will become a lead


 Rich picture version of Causal loop diagram based on Jack  Homer's paper Worker burnout: a dynamic model with implications  for prevention and control System Dynamics Review 1985 1(1)42-62 See  IM-333  for the Simulation model and  IM-2178  for a related Causal Loop Diagram of Project Turnover 
  

Rich picture version of Causal loop diagram based on Jack  Homer's paper Worker burnout: a dynamic model with implications  for prevention and control System Dynamics Review 1985 1(1)42-62 See IM-333 for the Simulation model and IM-2178 for a related Causal Loop Diagram of Project Turnover

 

How the Lean Startup method, developed by Eric Reis, works as a business system.
How the Lean Startup method, developed by Eric Reis, works as a business system.
Two loop structure which reflects the reinforcing effects of profits/investment, as well as profits/employee retention.
Two loop structure which reflects the reinforcing effects of profits/investment, as well as profits/employee retention.
 ​Purpose  Enables the different components in the 5 capability model in a visual manner for Enterprise and Business Architecture stakeholders.      Enter volumes based on transactions from all your applications based on the business process layer.  Actual transaction volumes recorded for your expen
​Purpose
Enables the different components in the 5 capability model in a visual manner for Enterprise and Business Architecture stakeholders.  

Enter volumes based on transactions from all your applications based on the business process layer.  Actual transaction volumes recorded for your expense or revenue stream.  Example; how many applications are sponsored by engineering that allow CREATE and UPDATE of a supplier or customer.  Enter the number of transactions in the engineering variable.  The engineering group has no authority to create either a supplier or customer.  All organizations are allowed to submit a certain set of inputs for a super user group to review and then those super users create and update the master record.  

Food for thought, the difference between the records created by the super user group and the volume of created party management records is the opportunity to scale and protect the reputation of your client.  

Now lets do the same for every update to a party management record.  All changes to a supplier or customer could effect pricing and tax or duty fees and each must use the formal change management process with many changes needing to have an authorized representative from the supplier or customer.  Digital records are in need of key control designs.  These are monitored and reported to the SEC.  

BUSINESS ARCHITECTURE 

5 Capability Model
The 5 capability model has many stock and flow children which each organization will need to model based on their current state.  

  • Aligns to APQC Process Framework
  • Aligns to Principles in ISO 9001, 26000 and 27001 

ENTERPRISE ARCHITECTURE 
Aligns Zachman Framework Enterprise and Business Architecture with Executive and Leaders from a business management level across any organization.  

A method in which to align and benchmark any organization or agency, with the system(s) logic required from Architects in Row 3, to enable Row 4 engineers who need to supply physics. 


Semantic
Getting terms to align to the generic objects can be a trying task, unless you simply list the stakeholders "semantic" term below the stakeholder in the presentation layer by order shown in the business process management section above the capability management group.  



How does a self employed business person make more money without blindly putting in more hours?
How does a self employed business person make more money without blindly putting in more hours?
 Dynamic system underlying project life cycles From Roberts Edward B The Dynamics of Research and Development p5 Harper & Row NY 1964

Dynamic system underlying project life cycles From Roberts Edward B The Dynamics of Research and Development p5 Harper & Row NY 1964

​The Problem:  What is the true cost of escalating too many Tier 1/Level 1 tickets to Level 2/3 engineers?    Things to measure: How does this impact:1. (MONEY) Cost per incident - what does this cost the business? 2. (TIME) Service Level - how does this impact desired service levels/SLAs? 3. (PEOPL
​The Problem: 
What is the true cost of escalating too many Tier 1/Level 1 tickets to Level 2/3 engineers?

Things to measure: How does this impact:1. (MONEY) Cost per incident - what does this cost the business? 2. (TIME) Service Level - how does this impact desired service levels/SLAs? 3. (PEOPLE) Agent utilization - how does this impact backlog? are we overworking engineers? Does this contribute to staff burnout?

According to:  ​System Dynamics Modeling of Gartner’s Hype Cycle  KAIST  Industrial & Systems Engineering  Ahn Hyunsoup
According to:

​System Dynamics Modeling
of Gartner’s Hype Cycle
KAIST
Industrial & Systems Engineering
Ahn Hyunsoup

This simulation mimics the flow of projects through an organization. The organization consists of teams that idependently or collaboratively work on projects. Many of the projects have a mulit-team dependency.    If you want to understand more in depth what this simulation is all about, read this bl
This simulation mimics the flow of projects through an organization. The organization consists of teams that idependently or collaboratively work on projects. Many of the projects have a mulit-team dependency.

If you want to understand more in depth what this simulation is all about, read this blog post: https://stefan-willuda.medium.com/super-powerful-how-full-kitting-will-speed-up-your-cross-team-projects-1598d55fa9d7
 Multi-echelon inventory optimization (sounds like a complicated phrase!) looks at the way we are placing the inventory buffers in the supply chain. The traditional practice has been to compute the safety stock looking at the lead times and the standard deviation of the demand at each node of the su
Multi-echelon inventory optimization (sounds like a complicated phrase!) looks at the way we are placing the inventory buffers in the supply chain. The traditional practice has been to compute the safety stock looking at the lead times and the standard deviation of the demand at each node of the supply chain. The so called classical formula computes safety stock at each node as Safety Stock = Z value of the service level* standard deviation * square root (Lead time). Does it sound complicated? It is not. It is only saying, if you know how much of the variability is there from your average, keep some 'x' times of that variability so that you are well covered. It is just the maths in arriving at it that looks a bit daunting. 

While we all computed safety stock with the above formula and maintained it at each node of the supply chain, the recent theory says, you can do better than that when you see the whole chain holistically. 

Let us say your network is plant->stocking point-> Distributor-> Retailer. You can do the above safety stock computation for 95% service level at each of the nodes (classical way of doing it) or compute it holistically. This simulation is to demonstrate how multi-echelon provides better service level & lower inventory.  The network has only one stocking point/one distributor/one retailer and the same demand & variability propagates up the supply chain. For a mean demand of 100 and standard deviation of 30 and a lead time of 1, the stock at each node works out to be 149 units (cycle stock + safety stock) for a 95% service level. You can start with 149 units at each level as per the classical formula and see the product shortage. Then, reduce the safety stock at the stocking point and the distributor levels to see the impact on the service level. If it does not get impacted, it means, you can actually manage with lesser inventory than your classical calculations. 

That's what your multi-echelon inventory optimization calculations do. They reduce the inventory (compared to classical computations) without impacting your service levels. 

Hint: Try with the safety stocks at distributor (SS_Distributor) and stocking point (SS_Stocking Point) as 149 each. Check the number of stock outs in the simulation. Now, increase the safety stock at the upper node (SS_stocking point) slowly upto 160. Correspondingly keep decreasing the safety stock at the distributor (SS_Distributor). You will see that for the same #stock outs, by increasing a little inventory at the upper node, you can reduce more inventory at the lower node.
9 3 months ago
 
 This insights explores the organizational factors influencing strategy implementation and the interrelationship among some of the factors.
  • This insights explores the organizational factors influencing strategy implementation and the interrelationship among some of the factors.
 Causal loop diagram based on Jack  Homer's  Worker burnout: a dynamic model with implications  for prevention and control See  IM-333  for simulation model and IM-641 for  Rich Picture CLD  
 System Dynamics Review 1985 1(1)42-62 
  

Causal loop diagram based on Jack  Homer's  Worker burnout: a dynamic model with implications  for prevention and control See IM-333 for simulation model and IM-641 for Rich Picture CLD

System Dynamics Review 1985 1(1)42-62

 

​The Problem:  What is the true cost of escalation?    Things to measure: How does this impact:1. (MONEY) Cost per incident - what does this cost the business? 2. (TIME) Service Level - how does this impact desired service levels/SLAs? 3. (PEOPLE) Agent utilization - how does this impact backlog? ar
​The Problem: 
What is the true cost of escalation?

Things to measure: How does this impact:1. (MONEY) Cost per incident - what does this cost the business? 2. (TIME) Service Level - how does this impact desired service levels/SLAs? 3. (PEOPLE) Agent utilization - how does this impact backlog? are we overworking engineers? Does this contribute to staff burnout?

Causal loop diagram illustrating one of the contributing factors to employee hiring.
Causal loop diagram illustrating one of the contributing factors to employee hiring.
  ​Purpose  Enables the different components in the 5 capability model in a visual manner for Enterprise and Business Architecture stakeholders.     5 Capability Model  The 5 capability model has many stock and flow children which each organization will need to model based on their current state.  

​Purpose
Enables the different components in the 5 capability model in a visual manner for Enterprise and Business Architecture stakeholders.  

5 Capability Model
The 5 capability model has many stock and flow children which each organization will need to model based on their current state.  

Semantic

Getting terms to align to the generic objects can be a trying task, unless you simply list the stakeholders "semantic" term below the stakeholder in the presentation layer by order shown in the business process management section above the capability management group.  



 Original (more DYNAMO-like) version is here:  http://insightmaker.com/insight/14464        The Simple Retail Sector model from Section 1.7 of  DYNAMO User's Manual  by Alexander L Pugh III, which is adapted from one from  Industrial Dynamics  by Jay Forrester.     http://www.amazon.com/DYNAMO-Manua
Original (more DYNAMO-like) version is here: http://insightmaker.com/insight/14464


The Simple Retail Sector model from Section 1.7 of DYNAMO User's Manual by Alexander L Pugh III, which is adapted from one from Industrial Dynamics by Jay Forrester.

http://www.amazon.com/DYNAMO-Manual-Edition-System-Dynamics/dp/0262660296 (I bought the 5th edition without realising there was a later one, hopefully it's still the same model in there.)
 Model of growth from diffusion from John Morecroft's Strategic Modelling and Business Dynamics Book Ch6 p174-191. A discussion of a bigger model of People's Express is in  http://bit.ly/HdaGy4  for a related You Tube video by John Morecroft on Reflections on System Dynamics and Strategy

Model of growth from diffusion from John Morecroft's Strategic Modelling and Business Dynamics Book Ch6 p174-191. A discussion of a bigger model of People's Express is in http://bit.ly/HdaGy4 for a related You Tube video by John Morecroft on Reflections on System Dynamics and Strategy