The technology has come a long way since the days of its early inception. A comprehensive article on modeling written by Professor Sterman at the Sloan School at MIT is called A Skeptic's Guide to Computer Models. Following are short descriptions of systems dynamics and simulation modeling quoted from various authors. System dynamics was developed at MIT in the mid 1950's. The method applies the principles of engineering control theory to managerial and economic problems.
Computer models serve as laboratories for experimentation.
Modeling is faster and less expensive than experimenting through real-life trials. Modeling allows people to test theories, develop internal consistency, build consensus, discover missing information, estimate the quantitative impact of changes, discover new opportunities, and avoid mistakes. System dynamics is a method for studying the world around us. Unlike other scientists, who study the world by breaking it up into smaller and smaller pieces, system dynamicists look at things as a whole. The central concept to system dynamics is understanding how all the objects in a system interact with one another.