You are involved in the production and sale of prefabricated window frames. Overall your company is doing quite well, but you often go through periods of low capacity utilization followed by production ramp up and added shifts. While all of this is normally blamed on market demand and the condition of the economy, you have your doubts. Looking back at sales and production over the last 8 years it seems that sales is more stable than production. Your goal is to determine why this might be, and what you can do about it.
In attacking this problem you want to simplify as much as possible your current situation. There are a number of reasons for this simplification:
| • | It is easier to understand a simple model. |
| • | You can get results quickly and decide if you are on the right track. |
| • | It is more effective to start with a simple model and add detail, than to build a complex model and attempt to extract insights from it after it is complete. |
| • | Using a simple model forces you to take an overview which is usually useful in the initial modeling phases. |
It is not always true that you want to start building simple models. In many cases the behavior you see is the result of complexity, and Vensim provides a very rich set of tools for dealing with complexity. Until you have had substantial experience, however, simplicity is highly recommended. While it is not uncommon to discover that what you have developed is not rich enough for the problem you wish to address, it is rare not to gain understanding in the process. Conversely, large complex models can become significant resource drains, providing no payoff for a very long time.
