Simulation of Business Processes

  • Published 2001

Abstract

The stock and ¯ ow diagram which have been reviewed in the preceding two chapters show more about the process structure than the causal loop diagrams studied in Chapter 1. However, stock and ¯ ow diagrams still don't answer some important questions for the performance of the processes. For example, the stock and ¯ ow diagram in Figure 2.1b shows more about the process structure than the causal loop diagram in Figure 2.1a, but it still doesn't answer some important questions. For example, how will the number of Potential Customers vary with time? To answer questions of this type, we must move beyond a graphical representation to consider the quantitative features of the process. In this example, these features include such things as the initial number of Potential and Actual Customers, and the speci® c way in which the sales ¯ ow depends on Potential Customers. When deciding how to quantitatively model a business process, it is necessary to consider a variety of issues. Two key issues are how much detail to include, and how to handle uncertainties. Our orientation in these notes is to provide tools that you can use to develop better insight about key business processes. We are particularly focusing on the intermediate level of management decision making in an organization: Not so low that we must worry about things like speci® c placement of equipment in an manufacturing facility, and not so high that we need to consider decisions that individually put the company at risk. This intermediate level of decision is where much of management's e±orts are focused, and improvements at this level can signi® cantly impact a company's relative competitive position. Increasingly, these decisions require a cross-functional perspective. Examples include such things as the impact on sales for a new product of capacity expansion decisions, relationships between ® nancing and production capacity decisions, and the relationship between personnel policies and quality of service. Quantitatively considering this type of management decision may not require an extremely detailed model for business processes. For example, if you are considering the relationship between personnel policies and quality of service, it is probably not necessary to consider individual workers with their pay rates and vacation schedules. A more aggregated approach will usually be sucient.

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Cite this paper

@inproceedings{2001SimulationOB, title={Simulation of Business Processes}, author={}, year={2001} }