What method represents a system's design by referencing physical elements of the software?

The correct response is Program Specifications. This method provides a comprehensive outline that focuses on the physical elements and structure of the software system. It serves as a detailed description of the components, interfaces, modules, and data structures that make up the software. By referencing physical elements, program specifications allow developers to understand how different parts of the software interact and function together, facilitating a clearer path for implementation and future maintenance.

Data Flow Diagrams, on the other hand, focus primarily on the flow of data through a system and how data is processed rather than detailing the physical structure or elements. They illustrate the movement of data between processes, data stores, and external entities, but do not adequately define how these processes are implemented in terms of the actual software architecture or physical components. Thus, while both methods are valuable in system design, program specifications are specifically tailored to reference the physical elements directly involved in the software structure.