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Managerial Economics Simulation
In this simulation participants 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 cost structures which allows for the treatment of operating leverage. In addition to making decisions, participants must forecast sales at the market and firm levels. The firm develops its operations in a competitive environment. The demand of each product manufactured by the firm is subject to macroeconomics variables, besides the demand variables under firm control (price, promotion, and customer service). Periodic firm reports include as performance variables, in addition to contribution margin by product and overall firm profitability, forecast errors. The professor receives a summary report.
This simulation, besides giving the participants the opportunity to observe the interrelationship between marketing, production, and finance functions, allows them to experience competition in three different markets and with three different sets of elasticities (price, income, promotion, etc.). In one of the products, conditions are set so as to generate a price war. This simulation can be used in managerial economics, applied microeconomics and pricing courses.
Students are 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.
A manual and weekly instructions for the students are provided in this Web site. After each round of decisions reports and financial statements in Excel format are made available to students.
The simulation is entirely administered through the Web. Professors don't need to get involved in the operation of the simulation and student receive technical support from ASD Business Simulations.
To access a sample account and view reports, send an email to promotion@asdsim.com. Please include your name and school.
