Building the Fish Banks Model and Renewable Resource Depletion

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the company can build with the fraction of the Yearly Profits being reinvested into ship
building. The company will begin with 10 SHIPS and increase its fleet as long as Yearly
Profits are positive. If the Catch per Ship is low, the company's Operating Costs may
exceed the income from fishing, and the net profit for that year will be negative. Yearly
Profits are determined by subtracting the company’s Operating Costs from the Revenues.
The Operating Costs of the company depend on the number of ships in its fleet. It costs
$250 per ship to operate for one year. The company sells the Total Catch per Year at
$20 per fish to produce Revenues. For this model, assume that the Catch per Ship is 15
fish.
Two feedback loops affect the SHIPS stock. The relationship between SHIPS and
Revenues generates the first loop. That is, fishing with more ships leads to a larger Total
Catch per Year, which in turn leads to larger Revenues and increased Yearly Profits. The
increase in Yearly Profits results in an increase in the amount of money reinvested into
building more ships. This is a positive feedback loop.
The relationship between the number of SHIPS and Operating Costs generates the
second feedback loop. Increasing the number of SHIPS in operation increases Operating
Costs which then causes Yearly Profits to decrease. This decrease in profits results in a
decrease in the amount of money reinvested into building more ships. This is a negative
feedback loop.
***Note: Since later we will be connecting this model to the Fish Population model,
create Total Catch per Year as a flow. For now, leave it as an unconnected flow (with
Catch per Ship and SHIPS as inputs.)
3.2.2 Building the Model
? Create the stock SHIPS with the Ship Building Rate flowing into it.
? Set the initial value of SHIPS = 10 (ships).
The Ship Building Rate is the number of ships the company can build with the
fraction of the yearly profits being reinvested into ship building. This leads to the
following equation:
Ship Building Rate = Yearly Profits * Fraction Invested / Ship Cost