Modeling helps in understanding policy alternatives: a case

Understanding an industry and its internal dynamics, primarily through modeling, is essential prior to evaluating long-term consequences of industrywide policy options. This paper attempts to provide an understanding of the fabricated metal manufacturing industry in Australia and its internal operational mechanisms through system dynamics modeling. The model helps to explore various policy options relating to production decisions, capacity acquisition, demand fluctuation, and investment decisions. The major subsectors considered in the model are production, customer orders, sales, and capacity acquisition.