Differentiating Between Material and Information Flow

The purpose of any dynamic model is to describe the movement, evolution and/or transformation of materials and/or information. Material can be thought of as “stuff”: things that are tangible, like widgets, water, dirt, buildings or cash. Information is intangible, and represents things like temperature, interest rates, prices, or a person’s perceptions.

Many models simulate the movement or transformation of materials. A water resources model simulates the movement of water through a system. A financial model simulates the movement and transformation of assets (e.g., cash, property) within a system. Other models simulate the evolution of information (e.g., the status of a project, a person’s perception of or degree of belief in something, the price of a commodity).

Many models simulate both material and information flows. For example, a supply chain model simulates the movement and transformation of parts and products (materials) as well as the perceptions of purchasing managers and other individuals (information).

Although the movement/evolution/transformation of materials and information within a system are similar in many respects, they have an important difference. In particular, material is conserved as it moves through a system, while information generally is not. Treating material and information flows in the same manner within a model can lead to conceptual and mathematical errors. It can also add to the complexity (and lack of transparency) in a model.

As a result, GoldSim explicitly distinguishes between the movement/evolution/transformation of material and information by providing separate elements that are intended only to operate on a particular type of input. This ability facilitates the construction of internally-consistent and transparent models.

Stocks: GoldSim provides three basic Stock elements. Reservoirs and Pools are intended to integrate/accumulate material flows, and represent things such as reservoirs of water, account balances, and inventories. Integrators are intended to simply integrate information. For example, integrating a time series of the velocity of a projectile using an Integrator would yield the distance that the projectile had traveled.

Delays: GoldSim provides two Delay elements for delaying continuous signals. Material Delays are intended to accept flows of material (e.g., gal/day or $/yr), and conserve the material in transit, outputting a flow. An Information Delay element accepts any kind of signal (which is generally not a flow), and does not enforce conservation of the signal.

While building your models, you should think carefully about whether you are operating on material or information, and use the appropriate element. As a general rule, if it is tangible (i.e., can be quantified in terms of mass, volume, or number of items), it is a material.

Note: Energy, although it is not tangible, should also be treated as a material, since it is always conserved. An example is a model that simulates heat transport through a system. In this case, the transport of heat is analogous to the transport of mass, and hence heat (energy) should be treated as a material within GoldSim. The dimensions of energy are ML² T^-2.

Note: Even though their value is not necessarily conserved (e.g., due to currency fluctuations or fluctuating market values), cash and other assets such as stocks should always be thought of as materials (since they represent quantities of bills or shares, which are conserved). That is, the quantity of shares that you own is a material; the value of those shares is information.