Introducing Stock and Flow

The purpose of this script explain the basic concepts of "stock" and "flow".

Status

Under Development

Primary nature of group task

Presentation

Time

Preparation time: 5 minutes

Time required during session: 20 minutes

Follow-up time: 0 minutes

Materials

1. Chalk/whiteboard markers
2. Black/whiteboard

Inputs

None

Outputs

• Familiarity with concepts and symbols of stocks, (direction of) flows, faucet and cloud.
• Familiarity with how stocks relate to flow.
• Familiarity with the "counter-intuitive" nature of stock-flow relationships where net flow is declining and accumulation continues to increase.
• Understanding that stocks and flows can represent intangible quantities like frustration.

Roles

• Modeler/facilitator with training in system dynamics modeling and simulation

Steps

1. The facilitator can begin with asking for examples of quantifiable, physical stocks that can be seen in the space and begin with one that is suitable (E.g. chairs in the room)
2. Facilitator draws the symbol of a stock to represent the chosen stock (E.g. chairs).
3. Facilitator asks about the inflow and suggests a reasonable label for it (E.g. "Increasing number of chairs")
4. Facilitator prompts about the existence of outflow (E.g. We could also lose chairs in the room as well) and could request for a reasonable label with a prompt (E.g. "How can we name this outflow?").
5. Ask, "what happens when the flow is slowed down?" (i.e. net inflow is decreasing). Does the stock continue to grow? Now point out that this is "counter-intuitive" because the net inflow is decreasing but the stock continues to rise.
   • "This is the first point that is counterintuitive about stocks and flows and why we need this distinction."
   • "We had less chairs coming in, but the stock of chairs continue to rise, which brings us to the second important point about stocks and flows."
   • Give examples of how we often get this wrong and point out some relevant examples such as how politicians often mistake decreasing the deficit spending as being the same as reducing accumulated debt (debt is still rising if there is deficit spending), how capping emissions of CO2 at rates where the net flow is positive will still lead to increasing levels of CO2 concentrations in the atmosphere, or how slowing the rate that risk of chronic diseases increase will still lead to a greater prevalence of chronic disease.
   • Cite the work of John Sterman on the counterintuitive nature of even simple stock and flow dynamics.
6. Close the exercise by saying:
   • "So we’ve just introduced two important concepts about why we want a stock and flow distinction. First, stocks accumulate when the net flow is positive, so decreasing the net flow still adds to the stock. And second, in dymamic systems—in fact the formal mathematical definition of a dynamic system—the response or output is a function of the state of the system, not just the input to a system."

Authors

Social Systems Design Lab

History

This script is largely based on the scripts "Concept Model" and "Water Glass Demonstration"

Revisions

None

References

Sterman, J. D. (2000). Business dynamics: Systems thinking and modeling for a complex world: Irwin McGraw-Hill.

Notes

None