This simulation can be used in Managerial Economics, Applied Microeconomics, Principles of Microeconomics, and Pricing courses. The scenarios and decision schedule can be adapted according to the objectives of the course.

Students grouped in teams manage a simulated firm in which the main decisions are related to pricing and setting of promotional and customer service expenditures for three products. Each product has different price and other demand elasticities as well as different cost structures. In addition to making decisions, participants may be required to forecast sales at the market and firm levels.

The firm conducts its operations in a competitive environment. The demand of each product manufactured by the firm is subject to macroeconomic and demand variables under firm control (price, promotion, and customer service). Once decisions are submitted and the simulation is processed, team and class wide reports. They include performance variables such as contribution margin by product and overall firm profitability. Forecast errors, if sales forecasts are required, are also reported. 

This simulation gives participants the opportunity to observe the relationship between marketing, production, and finance functions. It also allows them to experience competition in up to three different market structures and with three different sets of elasticities (price, income, promotion, and customer service elasticities). In one of the products, conditions are set so as to potentially generate a price war. In addition, different cost structures allow for the analysis of operating leverage.

Students are grouped in teams of two to five members. Up to sixteen groups can participate. The simulation can last up to twelve rounds (weeks), with each round simulating three months of operations.

SIMULATION ADMINISTRATION

The simulation is entirely administered online. On this website, students view weekly instructions, submit decisions and access class and team reports. The ASDSIM team processes each round and uploads reports with the results within 48 hours of each round deadline. All reports can be downloaded in Excel format.

Team reports include a sales report, forecasts errors (if sales forecasts are required), financial statements including income statement, balance sheet, cash flow statement, and footnotes to each financial statement. Class wide reports allow each team to see their performance relative to the other teams in the class. This characteristic motivates students and is an important factor in generating engagement. At the end of the simulation, after all rounds, the instructor has access to a summary report with points assigned to each team.

The instructor has access to all decisions and reports. They do not need to be involved in the administration of the simulation and may forward any student questions to the ASDSIM team; students may also contact us directly for technical assistance.

To access a sample account and view reports, send an email to farellan13@yahoo.com. Please include your name and school.

PRICING

The cost per student is $25, paid by either the student or the institution.