Operations Management Simulation: Inventory Basics

A simulation illustrates a fundamental concept in Operations Management and can be used to reinforce key learning objectives in case studies and readings. In this single-player simulation, students are responsible for managing stock at a small, franchised hardware store. The simulation includes 3 scenarios for 3 items stocked in the store: wrenches, environmentally friendly paint, and rock salt. Students play 1 scenario at a time over 12 simulated weeks. Each product has a different demand pattern, and students must decide how many units to order to meet the anticipated weekly demand. The simulation allows students to develop an intuitive strategy for balancing holding costs against ordering costs while avoiding a stockout. Faculty can use the simulation to launch a discussion of the Economic Order Quantity (EOQ) model in different situations with demand variability. This simulation can be used for courses in Operations Management for both MBA and undergraduate students. It is delivered entirely online and requires 1 class meeting or less for students to run the simulation and discuss the results.