The Search for Optimum Business Simulation Decisions: Can They Be Found?


  • Kenneth R. Goosen University of Arkansas, Profess Emeritus


The approach to evaluating business simulation decisionmaking and profit performance is almost always done through review and analysis of financial statements. Common measures of performance are net income, sales, ROI, market value, and earnings per share. The bottom line, of the income statement, net income, is often the primary measure of performance. It is generally believed and advocated that preparing a profit plan (budgeted financial statements) will greatly enhance performance. Comparison of actual profit against planned profit seems logical. However, this paper is primarily concerned with a suggested alternative method of evaluating performance that minimizes the need to use financial statements for performance evaluation. The use of optimum decisions and optimum profit as a potential means for evaluating performance is the primary concern.