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
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.
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.