Partners or Competitors? A B2B Simulation

Abstract

This paper describes PC?, a new business simulation for four teams of at least five players each that emphasizes forecasting, supply chain management and business-to-business negotiations in a simplified competitive environment. Although the marketplace uses only two variables, price and promotional budget, to determine firm-level demand, forecasting this demand is complicated by the competitive nature of this simulation. Although supply chain management is simplified by the fact that only four components manufactured independently are needed to produce the final product, the production scheduling is not automated to allow the teams to make critical mistakes. Negotiation occurs because each firm has a competitive advantage in only one of the four components needed to manufacture the final product. Even though all firms have the ability to manufacture all four components, they can lower their costs by purchasing some of the components from their competitors. Hence the question for the title -- are your opponents in this simulation your partners or your competitors?