All models are limited, simplified representations of the real world, but we can build confidence that a model is appropriate for the purpose by model testing. Thus, the step 4: Testing the model until satisfied that it is suitable for the purpose will be done.
So far, many kinds of SD modeling testing methods have been advanced by different scholars. For example, Forrester & Senge (1979) in order to increase the confidence in the SD model to propose a wide of variety of tests that include tests of model structure, model behavior, and a model’s policy implication (Forrester & Senge, 1979). Hsieh (1980) recognized that model testing should be begin from the purpose of our model, so he proposed some sample methods such as model stability, pattern of oscillation, time phase and cycle length (Hsieh, 1980; Lin, 2000).
In this section, we will discuss the validity of our research model by three methods, including dimensional-consistency test, extreme-condition test and pattern of oscillation. The first two are advanced by Forrester & Senge and the last one is purposed by Hsieh.
4.3.1 Dimensional-consistency Test
The first and basic task among testing the model structure is checking that an equation is dimensionally consistent. By using the “Unit Check” function of Vensim DSS to test, the units of equations including stocks, flows, auxiliaries and constants are consistent during the process of modeling and simulation.
This result also represents that the model structure of this research is considered robust and no problem in dimensional consistency test.
4.3.2 Extreme-condition Test
The extreme condition test asks whether the model behave appropriately when the inputs take on extreme values such as zero or infinity (Lee, 2002). On the other word, by this test, we can check that the model is robust or not in extreme conditions. In this research, we will assume two situations to test: (1) the ratio of corporate R&D funding is equal to 25% which is the max in global pharmaceutical industry based on Berardi (2003) (see Table 2-3); (2) the ratio of corporate R&D funding is equal to zero.
In the proposed model, the learning and growth dimension absolutely depend on the corporate R&D funding. Once the ratio of corporate R&D funding is equal to 25%, there are more funding to hire more R&D staffs and the R&D capability also will quickly increase. However, in the condition about minimum ratio of corporate R&D funding, there are no funding to pay the salary that no R&D staffs can be hire. If there are no R&D staffs in this industry, the R&D area cannot be developed to accumulate R&D capability.
Figure 4-16 correctly reports the results.
One of the resources about new drug development funding is corporate R&D funding. In max condition about corporate R&D funding, there will be a substantial increase in new drug development funding. And there will be more new drugs appeared on the market (Figure 4-17). More new drugs will bring more domestic demand and more salves value (Figure 4-18). When corporate R&D funding is reduced to zero, the new drug development funding will be decreased, and then the amount of new drugs, domestic market demand and salves value are able to respect to decrease. As the above result of test, the
Figure 4-16: Extreme-condition Test in Learning and Growth Sub-system
Figure 4-17: Extreme-condition Test in Innovation Stage
Figure 4-18: Extreme-condition Test in Customer and Financial Sub-system
Total R&D Staff
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Time (Year)
person/Year
"Total R&D Staff" : Corporate R&D funding=25%1 1 1 1 1 1 1 1
"Total R&D Staff" : Corporate R&D funding=0 2 2 2 2 2 2 2 2
"Total R&D Staff" : Current 3 3 3 3 3 3 3 3 3 3 3
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Time (Year)
Dmnl
RD Capability : Corporate R&D funding=25%1 1 1 1 1 1 1 RD Capability : Corporate R&D funding=02 2 2 2 2 2 2 RD Capability : Current 3 3 3 3 3 3 3 3 3 3 3
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Time (Year)
$/Year
New Drug Development Funding : Corporate RD Funding=25% 1 1 1 1 1 1 1 1
New Drug Development Funding : Corporate RD Funding=0 2 2 2 2 2 2 2 2 2
New Drug Development Funding : Current 3 3 3 3 3 3 3 3 3 3 3
New Drug Appear on the Market
8
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Time (Year)
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Time (Year)
$/Year
Actual Domestic Market Demand : Corporate R&D funding=25% 1 1 1 1 1 1 1 1
Actual Domestic Market Demand : Corporate R&D funding=0 2 2 2 2 2 2 2 2 2
Actual Domestic Market Demand : Current 3 3 3 3 3 3 3 3 3 3 3
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Time (Year)
$/Year
Sales Value : Corporate R&D funding=25% 1 1 1 1 1 1 1 Sales Value : Corporate R&D funding=0 2 2 2 2 2 2 2 Sales Value : Current 3 3 3 3 3 3 3 3 3 3 3
4.3.3 Pattern of Oscillation
According to Hsieh (1980), system dynamics are often under attack and happened fluctuations and oscillations by external forces. To make sure that the proposed model is adequate, we can examine whether the oscillation pattern of our model fits the real system’s pattern. Therefore, we will compare the simulation results with the actual data in the following.
From Figure 4-19 and Figure 4-21, we can find that in terms of sales value and actual domestic market demand, the oscillation pattern of the real system and the model are very close. In the other word, it indicates that this model is close to the real situation.
In Figure 4-20, there is a gap because of the dimensions are different between the actual data and the simulation data. The dimension of actual data is FTE1 (Full-Time Equivalents) and the dimension of simulation data is people.
Although there is a gap between the real system and the model, the oscillation pattern is still the same. As the results, the proposed model has been validated by this comparison.
1 Full-Time Equivalents (FTE): The FTE method counts the total number of R&D participants only after calculating the percentage of time that each person devotes to R&D. International comparisons of manpower engaging in R&D are ordinarily made
Figure 4-19: The Comparison Chart of Sales Value
Figure 4-20: The Comparison Chart of Total R&D Staff
Figure 4-21: The Comparison Chart of Actual Domestic Market Demand
Sales Value
2001 2002 2003 2004 2005 2006 2007 2008 2009
Time (Year)
2001 2002 2003 2004 2005 2006 2007 2008 2009
Time (Year)
person/Year
"Total R&D Staff" : Current 1 1 1 1 1 1 1 1 1 1
"Total R&D Staff" : ReferenceMode 2 2 2 2 2 2 2 2
Actual Domestic Market Demand
2001 2002 2003 2004 2005 2006 2007 2008 2009
Time (Year)
$/Year
Actual Domestic Market Demand : Current 1 1 1 1 1 1 1 1 1 Actual Domestic Market Demand : ReferenceMode 2 2 2 2 2 2 2 2