Business Simulation Game
Business Simulation Game
Business Simulation Game
Educational Technology
2004, 20(3), 275-294
This paper presents a spreadsheet based simulation game for teaching and
learning production management concepts of forecasting, material
requirements planning, order review and release. In this game the student
plays the role of a production planner managing two products, for which
customer orders are placed in variable quantities throughout the week.
The student builds forecasting and material requirement planning systems
to help in the tasks of production and vendor order release. In parallel
with this, we have run a small learning awareness program, to test and
stimulate the skill of reflection. Initial student responses to the game have
been favourable, but the proportion of time spent on reflection is low.
Contemplated refinements are presented.
Introduction
Simulation games are activities designed to mimic the reality of the
external world, within the classroom, with the goal of instruction. The
learning is intended to be experiential - the student experiences the
studied phenomenon and learning proceeds inductively. Besides
simulation games, there are other means of providing the experience of
reality to students - case study, role playing, in basket method, and
incident process. The main advantage of simulation games over these
alternates is the dynamic nature of the games - the incorporation of the
time element, imitating the passage of time. Students have to live with
the results of their past decisions - the effects of these decisions persist
into the future in the game. Another advantage is the verisimilitude
offered - some games are able to provide a high level of make believe and
fantasising. The strong interest that is aroused in the subject matter is
itself of pedagogical value. A simulation game can be restarted with a
new strategy for playing the game, but a case study can only be used
once (Gilgeous and D'Cruz, 1996).
276 Australasian Journal of Educational Technology, 2004, 20(3)
While there are many top management games available for students and
teachers of management, the number of games aiming to teach/learn
specific management skills is small. There is also a dearth of games that
enhance detailed modelling and decision making capability. The primary
goal of the research presented in this paper is to develop a simulation
game that meets this void, in the specific area of management of
production planning and control, and to explore the learning
implications of the game. The paper describes the game that we
developed. This game is able to impart an understanding of the issues in
order-release; and as a secondary benefit, the spreadsheeting skills of the
students are enhanced. The paper also describes the learning experiences
of the students, with an emphasis on reflection, and their evaluation of
the simulation game.
Literature review
The first simulation game for teaching business management appears to
have been introduced in 1955. This game, called Monopologs, was
developed by the Rand Corporation for teaching logistics to U.S Air
Force personnel (Faria, 1990). In 1956, the American Management
Association introduced its Top Management Business Game, which was
meant for training top management, and included decisions on
production, marketing, assets, inventory, etc. The computations were
performed on an IBM 650 computer (Kibbee, Craft & Nanus, 1961). In
this game, the players filled a form indicating their decisions, this
information was punched into cards, and the computer program was
run. The computer provided performance reports, and the cycle was
repeated. By 1961, Kibbee et al. (1961) listed 31 computerised business
games, five of which were production simulators. Since then there has
been a steady increase in the number, sophistication, and adoption of
simulation games (Faria, 1987; McKenna, 1991; Burgess, 1991, Wolfe,
1993).
Test of
Hypotheses
evidenced by a subsequent study (Wolfe, 1975), which did not have this
guidance, and had a negative result.
The game
Objectives
The game is designed to enhance the understanding of PPC concepts
such as bill of materials, routing, order review and release, priority
setting, queuing, forecasting, master production scheduling (MPS),
material requirements planning (MRP), and capacity requirements
planning (CRP). These concepts are usually treated in isolation as
discrete concepts. The simulation brings out their interactions in a simple,
yet realistic setting.
Alpha Beta
Fi Fi Fi Fi
(1) (2) (1) (2)
The scenario
In this game the students play the role of the production planner of a
manufacturing company. They manage two products, Alpha and Beta,
for which customer orders are placed on the company in variable
quantities throughout the week. These products are made up of
components (Comma, Delta, Epsilon, Fi, and Gamma), some of which are
produced within the company, and others are sourced from vendors. In
carrying out the production, the parts are routed through processing
machines (Kappa, Mu, Pi, Rho, and Sigma) within the company, where
processing time is spent, and queues are built up. The bill of materials is
shown in Figure 2, and the routing and processing time information is
provided in Figure 3.
282 Australasian Journal of Educational Technology, 2004, 20(3)
Mu Pi Sigma Delta
0.6 min 0.3 min 0.5 min
Sigma Mu Pi Epsilon
0.8 min 0.5 min 0.6 min
Purchased Material Fi
Vendor lead time = 1440 min
The planner participates in this process beginning from week 20 and the
game ends after week 32. A simulator written in Visual Basic and
incorporated in an Excel spreadsheet simulates this scenario. The
students interact with the simulator in the spreadsheet environment.
Profits are accumulated for every item in the customer order that is filled.
For every item in the customer order that is late (filled after the day the
order arrives), a penalty is charged per day. There are also costs
associated with holding inventory (both finished and work in process)
and with overtime work.
Student task
To play the game, the students only need to make decisions on order
release and overtime on a weekly basis. The objective of the students is to
maximise their total profits at the end of week 32. After playing the game
for a while, students find out that ordering on an ad-hoc basis leads them
to financial ruin! They are asked to use past data for developing a
forecast, which, through the material requirements planning process,
should help them in deciding how many parts / products to order and
when. A capacity requirements planning module can help them decide
how much overtime to order. Their specific assignment is to create a
decision support system (DSS) for order release using these concepts.
They then use this DSS to play the game and see for themselves how
MRP works to facilitate accurate order release, in synchronisation with
the forecast demand (and to increase their financial performance!). They
create the DSS within the spreadsheet environment of MRP-SIM.
Students don't need to do programming in Visual Basic, but they need to
be proficient in using spreadsheet software. Learning to use spreadsheet
software is an additional goal of this assignment.
User interface
The main screen of MRP-SIM is shown in Figure 4. The upper left corner
shows the products currently being processed by the machines and their
queues (for example, the process Mu is currently processing 3000 units of
Epsilon). It also shows orders placed with the vendor. The lower part of
the screen shows the current inventory position. Current pending
customer orders are also shown. To play the game, the button Initialise
Game is used to initialise. This causes a history of demand to be created
up until week 20. The students can view the current inventory, work in
progress, and vendor orders at this time. Next they need to decide on the
orders to place for next week, their priorities, and overtime to authorise
for the next week. Once they have made the decisions, they communicate
it to the simulator by clicking on the Make / Alter Decisions button.
284 Australasian Journal of Educational Technology, 2004, 20(3)
Once the decisions are entered, they press the Simulate! button to let the
production for the week begin, and to let the time advance to the next
week. The queues of the machines, the finishing of the work, the
inventory position, the arrival of customer orders, and the filling of the
customer orders are animated on the screen. Profits are accumulated for
every item in customer orders that is filled. For every late item a penalty
is charged per day. There are also costs associated with holding
inventory and with overtime work. The details of the model may be
viewed by pressing the View Model Details button. At the end of the week
the current and cumulative financial performance is shown at the top
right of the screen (Figure 4 shows that a net profit of $2062.25 was made
at the end of week 21. The students then make decisions for the next
week and repeat the cycle.
The assignment
Students are asked to play the game in an ad-hoc manner, without any
decision support, to familiarise them with the simulator and to see how
well they can perform without the forecasting, MRP, and CRP models.
They are then asked to build a DSS consisting of these models to help
Basnet and Scott 285
them play the game. In building the DSS they can create initial forecasts
from the 20 weeks of historical data. The forecasts and the MRP need to
be updated as new data becomes available. All this is done within the
spreadsheet environment. The students are asked to hand in their DSS (in
a diskette) and a semi-structured reflective essay on the game, their
experiences, and their understanding of the concepts.
Step 1. Familiarisation with the simulator. The students play the game
in an ad hoc manner, guessing the decisions.
Step 2. Playing the game on a re-order point basis. The students try on
different levels of re-order points and fixed order quantities.
Step 3. Playing the game with a DSS, built by the students. To do this,
they use a forecasting model to forecast demand of the finished
products. This is fed into the master production schedule
(MPS), which it explodes into the MRP for the components. The
students then create the CRP model from the MRP model. This
completes the DSS, which suggests the order quantities for all
the items, and the overtime to order for all the processes.
Desire/ Action
Single Loop: Result/Consequence
Expectation
Compare
Desire/
Double Loop: Action
Expectation Result/Consequence
Compare
Expectation appropriate?
Action best available ?
Assumptions reasonable?
We decided to:
• track the main activities students used before and during each major
step within the MRP-SIM assignment, using activity logs
• create time maps from the activity logs
• record the levels of reflection witnessed
• stimulate learning awareness by discussing, in class, the results with
the students, before they finalised their reflective essays, which were
part of the assessment scheme.
Tracking the main activities was done using a semi-structured, one page
questionnaire we called an activity log (example in Appendix 1) – one for
each major step in the assignment (see above). Each log asked students to
record the time spent, and thinking behind, each significant task their
group had undertaken.
Creating time maps of the steps was simply done by graphing tasks
versus (proportion of) time spent, over the engagement. One class graph
for each significant MRP-SIM engagement was created, using different
colours for each student group.
The assignment was distributed in class and the first lab session held, 14
days later. As “entry tickets”, the activity logs for ad-hoc and re-order
point running of the simulation were collected. The second lab session
was held, 2 days later. The two lab sessions were essentially help
sessions, offering individual help to the class members in creating their
DSS. Students can often be unsure of the concepts emphasised in this
assignment, or even the purpose of the DSS. Many students struggle to
acquire the level of spreadsheeting skills needed for the assignment. The
two lab sessions offered instructions in these matters.
The spreadsheet files and the DSS activity logs were then submitted for
assessment. Discussion of the results and feedback was given in class, 21
days before their reflective essay on the assignment was submitted. The
reflective essay was for three pages of thoughtful responses to reflective
questions we had provided.
There were six students taking this paper in 2002; they were given three
activity logs to fill in, corresponding to three ways, or steps, of playing
the game: in an ad hoc way, with reorder points for each items, and with
288 Australasian Journal of Educational Technology, 2004, 20(3)
the help of the DSS created by them. Students filled in the time they spent
on various activities. All possible activities were identified in the logs,
including the four dealing with reflection, but the students were not told
the learning levels of the logged items until the discussion of results and
feedback session. This session was deliberately held before the final
reflective essays were submitted.
Figure 6 shows the self-reported total time spent by students on the four
levels of learning in carrying out the assignment. Similar graphs were
also available for individual steps.
300
250
0
0 1 2 3
Learning level
When presented with the learning levels of their activities and the time
they spent on activities, most of the students were surprised at the very
high time they spent on level 0 activities (trial and error or without a
plan), as against single loop or double loop learning.
Student evaluations
The students were asked to assess the simulation game in the context of
their normal end of course anonymous course and teacher assessment.
Their average ratings on a scale of (1 = strongly agree, 5 = strongly
disagree) is presented below in Table 1.
Basnet and Scott 289
Generally, the students found the assignment quite challenging. But they
felt that they learnt the MRP concepts pretty well. Since the students had
some familiarity with spreadsheets, the spreadsheet format of the game
helped in gaining student acceptance. Their evaluations bore testimony
to this. Some student comments, collected in 2002 from their reflective
essays, are given below.
Student A:
The next consideration was that the game opened my perspective to the
complexity of working within a production environment. It was insightful
to see all of the considerations that need to been (sic) thought of such as
overtime, holding costs and late delivery costs. Also the fact that at the
end of the game it was not full proof (sic, the student meant ‘fool-proof’)
in its recommendations supported the difficult nature of production
management.
Student B:
Therefore, using the DSS helped me play the game better and also my
profits had increased as well (i.e. started making profits rather than loss). I
believe the reason for improved results was due to taking more accurate
and precise figures into account when planning the future productions.
However, with DSS, decisions were still based on using my own judgment
and the game was still played with a great deal of uncertainty due to
reliance on forecasting figures. But to make it more realistic in the essence
to make the user of the MRP Simulation believe it is the real world and to
be able to imagine themselves in that environment, I think adding more
financial data such as how much overtime and late delivery is really
costing for each component (not just the total), and more costing
information would enrich a persons mind.
290 Australasian Journal of Educational Technology, 2004, 20(3)
Student C:
At the beginning I did not know where to start. However, with general
knowledge of production planning that I had learned from the lectures, I
continuously read and followed the instructions provided. At the same
time, I familiarised myself with the simulation software by using MS Excel
application to get a sense out of it, which was quite difficult for me. Then,
I found there were some parts of MRP that were separated by sheets or
tabs like; Bill of Materials, MRP / CRP, Routing, Order Release, and
Forecasting, which in the beginning I did not see how I can relate these
tasks together.
Conclusion
In this paper we presented a spreadsheet-based simulator for teaching
and learning production planning and control concepts such as
forecasting, material requirements planning, order review and release.
The game received a favourable response from the students. The
spreadsheet format helped gain acceptance. Although the students were
not judged on their financial performance, they did develop a rivalry to
gain the highest profit. This substantially increased the motivation in
playing the game. A focus on levels of reflection attained added a parallel
learning focus.
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Basnet and Scott 293
Individual ACTIVITY LOG for step 1: Playing the game in an ad-hoc manner
Mins Thinking associated (and
ACTIVITY:
spent outcomes)*
Read the assignment
Wrote down questions and thoughts
Played around inside the spreadsheet file
Put in some rough numbers into the
spreadsheet, just to see what would happen
Developed expectations about the results of
running this simulation
Compared simulation results with your
predictions/expectations
Openly questioned processes you were
using in forming your expectations
Sought further information about specific
things
Discussed the assignment with my group
Worked out numbers before running the
simulation
294 Australasian Journal of Educational Technology, 2004, 20(3)
* Think of the page as a map of what you did, with enough detail for the reader to
be able to understand all the activities you followed and your thinking behind it.
Tell it truthfully, as there is no “right answer” here, just a conscientious
completion of the picture of your activities.
Profit achieved in your best simulation run in an ad-hoc manner = $ ____
Read through the page now, speaking it out in your head as if you were telling
someone what you did, and the thinking behind it.