A Structural Reliability Business Process Modelling with System Dynamics Simulation

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Lam, C. Y. ; Chan, S. L. ; Ip, W. H. (2010)
  • Publisher: InTech

Business activity flow analysis enables organizations to manage structured business processes, and can thus help them to improve performance. The six types of business activities identified here (i.e., SOA, SEA, MEA, SPA, MSA and FIA) are correlated and interact with one another, and the decisions from any business activity form feedback loops with previous and succeeding activities, thus allowing the business process to be modelled and simulated. For instance, for any company that is eager to achieve profitability, a customer-centred orientation, as well as the creation and maintenance of customer relationships and customer loyalty, will be a high priority. The customer management process illustrated herein elucidates the mapping and modelling of the six kinds of business activity based on computer simulation. The proposed system dynamics model helps to evaluate the effectiveness of the customer management process and to examine the factors that affect customer satisfaction, customer loyalty, the number of customers and the number of sales orders received, factors that are essential to company profitability. The proposed structural reliability modelling approach, with the system dynamics simulation of the business process, thus enables decision makers to select the most favourable business strategies and to make the right decisions about policy by simulating the dynamic behaviour of information feedback systems. Sensitivity analysis can also be carried out based on the system dynamics model to determine the optimal value of each variable.
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