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Business Forecasting Simulation

ForecastSim is a business simulation used to enhance business and financial forecasting skills. Students are required to make forecasting decisions for six products with different demand characteristics. Two products show seasonality. Forecasts include forecasting market and firm sales for each product, forecasting short-term funding, net income, and total assets and liabilities. Decisions include setting prices and promotional expenditures for each of the six products.

The simulation starts with all of the companies setting the same price and students forecasting market sales and short-term funding needs. As the simulation progresses, they are allowed to set prices and promotional expenditures. With each product sold in different markets, the competition that ensues in the products that have a high price elasticity, makes sales and financial forecasting more challenging. This condition forces students to go beyond using forecasting techniques and to use judgment and conjecture, while keeping an eye on the financial condition of their company.

Performance reports are comprised of financial statements and corresponding footnotes. The report also details errors in forecasting sales at the market and firm levels as well as forecasting errors in projecting cash flows, income statements and balance sheets. Points to teams are assigned based on forecasting errors and firm profitability.

This simulation is recommended for Sales Forecasting and Business Forecasting courses.

Students can be grouped in teams of two to five members. Up to sixteen groups can participate. The simulation can last up to twelve weeks with each week simulating three months of operations. Before the beginning of each simulation, the economic environment and the degree of competition in which the companies will conduct their operations can be modeled. The potential profitability and risk of the company can also be modeled. 

A manual and weekly instructions for students are provided on this website before each round of decisions. After each round, reports and financial statements in Excel format are made available to students. The professor also receives a summary report.

Decisions are implemented in a progressive manner. The number and complexity of the decisions increases as the simulation progresses. A tentative decision schedule is available. After a simulation round is processed, firm reports, including financial statements and footnotes, are made available to participants and professors. Another report includes a summary of performance variables and a ranking of the teams.

Depending on the preference of the instructor and the nature of the course, an Excel template can be made available to aid the students in forecasting financial statements.  Students can also receive technical support from ASD Business Simulations.

All simulations are Internet based and are entirely administered through the Web. Decisions are entered on our website and student reports are also downloaded from it. There is no need for professors to get involved in the operation of the simulation.