International Operations Simulation

Hans B. Thorelli is the author of International Operations Simulation, a Free Press book.

Contents

FOREWORD by Dean George P. Shultz

PREFACE

1 Of Games and Game Design

1. Simulation by Gaming: Purposes of Games

A. Education

B. Research

C. Business Planning

2. Types of Games

A. Specific Purpose

B. Level of Management

C. Individual vs. Group Decision-making

D. Interactive vs. Non-interactive Simulations

E. Manual vs. Computerized Simulations

3. Pointers on Design and Selection of Simulations

A. Bias of Designers

B. Realism

C. Simplicity Not Necessarily a Virtue

D. Complexity vs. Playability

E. Degree of Determinism

F. Qualitative vs. Quantitative Factors

G. Dynamics

H. Forestalling Dysfunctional Behavior

4. Pointers on Play

A. Number of Teams and Members Per Team

B. Emphasis on the Long Range

C. Time Available for Decision-making. Continuous vs. Intermittent Play

D. Evaluation Sessions and Continuous Feedback

E. Enriching the Game Experience

5. Effectiveness of Games in Education

A. Problems of Measurement

B. Games Compared to Cases, Etc.

C. Functional Insights

D. A Holistic View

E. Insight into Decision-making Processes

6. Role of Games in Education

2 INTOP: An Overall Presentation

1. Purpose

2. Fitting INTOP into Educational Programs

3. General Model and Designer Biases

A. General Models

B. International Variables

C. Common Economies and Specialization

D. Dynamics of the Exercise

E. Designer Biases

F. Summary: Highlights of INTOP

4. The Game Structure Detailed. Decisions to Be Made by Participants

A. Company Organization and Home Office

B. Products and Improvements, R & D

C. The Management of Innovation

D. Area Operations

E. Production Management

Scheduling of plants and production; Plant characteristics; Manufacturing cost characteristics

F. Limit on Number of Grades

G. Marketing Management

Competitive variables: price, advertising, grade and standard-deluxe models; Channels; Marketing research

H. Shipping and Other Transfer Costs

I. Inventory

J. Financial Management

Area finances; Home office finances

K. Marketing Research, Trade Association Gazette and Consultation

L. Inter-company and Intra-company Transactions

Patent licenses; Inter-company (industrial) sales; Intra-company transfer of goods

M. Background Data on Brazil, the EEC and the U.S.

Size of market, nature of demand; Product market differences by area; Sensitivity to advertising; Commercial and administrative expense; Cost of production and capital; Government and business relations. International trade policies; Business cycles and economic index

5. Additional Standard Information for Participants

A. Marketing Research Detailed

B. Schedule of Costs, Charges, Time Lags and Marketing Research Services

3 Economic Models and Programming

Approaches

Introduction

1. An Overview of the Economic Aspects of INTOP

2. The Economic and Mathematical Aspects of the INTOP Simulation

A. The Functional Areas

B. Time and Change

C. The Consumer Market

D. The Marketing Cost Functions

Shipping costs; Sales expediting costs; Commercial and administrative costs; The inventory cost function

E. The Manufacturing Functions

F. The Financial Functions

C. The Research and Development Function

H. The Equilibrium Position of the Firm

3. The Simulation from the Computer Viewpoint

4 Game Administration

Introduction

1. Preparatory Considerations

A. Purpose

B. Resources

C. Team Number, Size and Structure. Mergers, Subsidiaries, Joint Ventures

D. Equal Start or Handicap Play? Predetermined or Discretionary Objectives?

2. Administering a Standard Run of INTOP

A. Orienting Participants

B. Organization and Objectives of Teams

C. Telescoping Initial Decision Periods

D. A Standard Decision Session

E. Administrative Aide-mémoire

F. Programmed Routines vs. Deliberate Decisions

G. Changing Game Parameters. Role of Monitor Company

H. Processing Cycle and Administrative Routines

I. Short Runs -- Some Observations

J. Accumulating Game History for Control and Evaluation

3. Regulating the Flow of Decision-making Data

A. Information Systems and Their Manipulation

B. Varying the Rate and Types of Information

C. Extending the Time Span of Plans and Decisions

D. Media of Regulation

E. Evaluating Comprehension and Processing of Data. Feedback from One Student Cohort to the Next

4. Enriching the INTOP Experience

A. Integration of the Simulation in a Broader Educational Context

B. Means of Integration

C. Introducing Qualitative Factors

D. Making Use of Outside Experts, Role-playing, In-baskets, etc.

E. Adjusting Quantitative Performance of Individual Companies to the Quality of Their Decisions

5. Performance Evaluation

A. Performance Criteria

B. Objectives and Degree of Goal Achievement

C. Quality of Plans and Play

D. Quality of Related Assignments

E. Indications Inherent in the INTOP Model

F. Mutual Evaluation of Executives Within Teams

G. Management Audit and Review of the Simulation

5 Computer Operations and Wonder Cards. Parameter Choice and Change

Introduction

1. General Overview of Computer Operations
A. The Flow of Information

B. Inputs

C. Outputs

D. Equipment Requirements, Processing Time

E. Changing Number of Companies. Consecutive Processing of Several Periods. Changing Period Numbers and Identification

2. Dictionary and Wonder Cards: Instruments of Change

A. Dictionary

B. Wonder Cards

3. Parameter Choice and Change

A. Introduction

B. The Framework of Parameter Selection Area and product variations; Constraints imposed by the model and the decision forms; Financial statements and related parameters

C. Additional Considerations in Parameter Selection Elasticities and remaining parameters in the functional management areas; Elimination of parameters; Safety valves

6 A Modular Multi-Purpose Simulation

1. Modular in Design, Multiple by Purpose

2. General Management INTOP Simulations

A. Emphasis on Organization

B. Emphasis on Diversification

C. Emphasis on Product Interdependence

D. Emphasis on Bargaining

E. Emphasis on Experimentation. Non-Interactive Settings

3. Functional Management INTOP Simulations

A. Production

B. Marketing

C. Finance and Accounting

4. Simplification

A. A Domestic Regional Management Simulation

B. A Single-product Simulation

C. A Multi-product Simulation

D. A Single-area Simulation

E. A Game for 72 Teams

5. A Distribution Systems Simulation

6. INTOP-INDUSTRIAL -- An Exercise in Flexibility

Appendices

I Dictionary of Program Parameters and State Variables

II Standard FORTRAN Output of Company Financial and Marketing Research Data, sample

III Selected Special Outputs for the Administrator

IV Standard Decision Forms and Standing Contract Forms

V Standard Operating Instructions

VI Ancillary Documentation for Discretionary Use

VII A Note on Organization Simulation by Gaming

Select Bibliography

Index