Design of a System Dynamics Model to Analyze the Styrene Demand in the Brazilian Market

• Published in: Systemic practice and action research Vol. 31; no. 1; pp. 87 - 104
• Main Authors: Souza, Marcos Leandro Hoffmann, Rodrigues, Luis Henrique, Morandi, Maria Isabel Wolf Motta
• Format: Journal Article
• Language: English
• Published: New York Springer US 01-02-2018; Springer Nature B.V
• Subjects: Business and Management; Design; Methodology of the Social Sciences; Organization; Petrochemicals industry; Review; Sociology; Systems design; Brazil; Decision-making; System dynamics; Styrene demand; Scenario planning
• ISSN: 1094-429X; 1573-9295
• DOI: 10.1007/s11213-017-9417-8

The growth of the petrochemical industry is based on end-user applications such as the automotive and construction sectors, which are the main drivers of the styrene market. However, the use of substitutes for petrochemicals is a reality and creates a competition in the applications of petroleum products. In this sense, this research aimed to design a system dynamics model to evaluate different scenarios, observing the behavior of the styrene demand over time. In the first phase of the project, a greater understanding of the issue was created and a closed loops diagram was elaborated. It was used during the second phase to design an explanatory regression validation model for the styrene demand. In phase three, a visualizing model and scenarios were designed. The scenarios themselves and the results of each scenario were evaluated. The designed and simulated scenarios aimed to evaluate the impact that the use of substitute materials and the variations in gross domestic product cause to the styrene market. The use of system dynamics together with scenario planning was efficient as different strategies for the market could be evaluated based on the simulated scenarios. A critical analysis of the model’s contribution to the decision-making within organizations concludes the study.