Detailed description of LABAM’s simulators and the Courses which fit with them
Labams’ simulations develop the managerial skills that only experience can provide.
LABAMS is a decision-making lab, that is, an Internet-based virtual environment where participants can take decisions in nine different scenarios and respond to the consequences of those decisions. The sequence of results and new decisions provides a rich planned learning experience. The automatic processing features of Labams allow professors to directly intervene in the prior organization of each simulation and the processing of results without having to depend on systems engineering specialists.
Seven of the scenarios have been specifically designed to develop decision-making skills for a wide range of staff jobs, while two simulated scenarios SimCEO and Simserv, were designed to integrate staff skills into a coherent general management whole.
In the following sections each of the simulated scenarios is described together with the learning objectives which have guided their design. There are also recommended courses for use.
SIMPRO: OPERATIONS
Simulated scenario
Participants take over the management of an industrial company whose financial and marketing problems are drastically minimized after winning a long term contract leaving them free to focus decision-making in operations and production.
The new managers receive operating data from the old management team and must at once decide how to program the production of three products in the two lines of machine tools for the next operating day, how to allocate human resources selecting operators from a pool of 28 available, deciding hours of work and how much of this is to be dedicated to the training of workers, as well as determining the level of investments in maintenance, inventory and quality control.
As in many real industrial concerns, decisions fed by the new management team to the simulator represent one day of operations. Every three days a truck calls to load up the production but if the company is unable to deliver the required amount it will be severely penalized under the terms of the contract. At the end of every simulated day production output is known, number of rejects, costs, efficiencies, downtime and overtime for all the simulated companies participating in Simpro thus managers will be able to compare their performance with other competing companies. .
As the simulation continues, participants study the operations management techniques included in the manual and apply them to their operations.
Not being allowed to change technology because of the strict specifications of the contract, managers must device intelligent ways of managing their industrial company, trying to obtain lower costs than managers of other simulated factories because the “winning” team in Simpro is the one who keeps the lowest average costs throughout the simulation.
Objectives
1. The central objective is to accumulate experience in production management. decisions about controlling inventories and assigning workers to machines.
2. Basic to making such decisions effectively is an understanding of fundamental concepts, ideas and analytical tools of production management, such as incremental analysis, production scheduling, and economic lot size inventory models.
3. An understanding of these concepts, ideas, and tools can be gained more effectively by the student if he or she is first exposed to them in the classroom and/or by studying Chapters 3 to 5 of Simpro’s Manual, and then using the opportunity to apply those techniques to a specific production problem.
4. Participants also gain experience in independent decision-making over a very short time period but which may have large cumulated long range effects.
5. Simpro will demonstrate that a cost advantage can be attained through management alone, instead of solely through technology.
Some recommended courses: Production Management, Operations Management, Production Programming and Control-Inventory, Production Scheduling, Mantainance Engineering and Quality Control
122-page Manual
SIMSERV – Management of Services
Simulated scenario:
•Simserv simulates non industrial companies such as hotels or hospitals.
•Participants receive the management of one of three hotels of different sizes and backgrounds, in a resort or one of three hospitals in a community. In both cases participants receive financial information and a ten year history of the community where they are to operate.
• Hospitals or hotels have just been bought by new shareholders. The new managers are faced with the task of managing organizations which could compete or collaborate.
•The analysis of the environment as well as the determination of potential margins, will open the opportunity to set growth or contraction strategies through the capacity of beds and ancillary services.
•The main decisions, which represent a yearly plan, are expressed in guest days or patient days which in turn will require the estimation of the work force necessary to service them using various forecasting methods and the financial consequences of different bed rates.
•The winning management team in Simserv will be that which achieves the largest increment in capital over the first year, showing profits but without hurting the community.
Objectives:
1. To illustrate the management process in service organizations conveying the dynamic interdependence of policies and decisions.
2. To demonstrate that many concepts and tools applicable to industrial organizations cannot be applied to services, and that in particular, Marketing is a line instead of a staff function. .
3. To teach in an applied setting modern quantitative tools such as forecasting, break even analysis, trade-off analysis, general sensitivity analysis and the use of financial ratios to services.
4. To produce decision making experiences under real life conditions of time limitations and competitive pressures.
Suggested courses: Management of Services, Hotel Management, Hospital Management, Tourism Management, Services Operations, Marketing of Services
33-page Manual.
SIMDEF – Financial Management [See Presentation]
Simdef strengthens abilities in managerial accounting, production and financial techniques because simulated decision making will require repeated application of those techniques. In the case of Finance, decision-making will focus on the financial structure of the simulated company and on resource allocation. In order to operate the company the new management team will have to forecast, plan and control. Through Simdef the new managers will acquire information about the interdependence between different decision variables learning how to build a solid decision making structure. A number of financial models have been inserted in Simdef so that the simulated managers can build a complete set of financial decisions in an economic environment full of cycles and uncertainties in which risk and return are positively associated.
Simulated scenario
•Simdef simulates a generic market, where an unbranded commodity such as sugar, rice, fishmeal, minerals etc, is traded showing significant quarterly fluctuations in price. None of the competing companies is able to influence the price level, reducing the marketing function and increasing the importance of both finance and production.
•As with many real-life commodity companies, the simulated company has a very large production facility which requires great quantities of capital to operate within a context of rapid depreciation
•The new management team receives the company with a moderate share price and must purchase money in a relatively modern capital market using bank loans, bonds, factoring invoices, selling or purchasing negotiable securities and issuing or redeeming ordinary or preferential stock in the stock market. If none of these sources of funds is used, a loan shark will provide money at a very expensive interest rate..
•Short and long range plans must be drawn on the basis of one or more forecasting studies and manager must chose quarterly amongst capital investment projetcs.
•The central problem is how to purchase cheaply capital and allocating it efficiently while maintaining a healthy financial structure.
•The best company will be that which obtains the highest share price in the market, or the highest ROI, although the professor may select a combination of indicators.
Objectives
1. Develop abilites in the application of the concepts and techniques of Managerial Accounting, Production Administration and specially Financial Management.
2. Demonstrate that the modern financial executive must not only purchase capital at low cost but also has to allocate capital efficiently.
3. Discover the fundamental interdependence between the purchaser of capital and the great user of capital: production.
4. Design of a healthy and stable financial structure.
5. Acquisition of practice in smooth operations, planning forecasting and controlling. .
6. Analyzing in depth the interdependence between several financial variables in a risky and uncertain environment.
Recommended Courses: Financial Management, Business Economics, Managerial Accounting, Capital Budgeting, Managerial Economics, Capital Markets.
MARKLOG [See Presentation]
Simulated scenario:
•Simulates the market for basic intermediate goods, the kind of market typical of business-to-business industrial transactions, where an organic textile dye competes with a chemical dye in a large textile market located several thousand miles away, both with very stable and equal prices and technically perfect substitutes for each other.
•Decision-making at Marklog has a four-week horizon choosing between ten different transportation modes, each with different costs, durations and risks to dispatch and send dye shipments to wholesalers and manufacturing customers.
•Inventories must be managed at the company’s local operation and also at the final destination so as to provide a good level of service but, at the same time, avoiding high costs of working capital.
•As all B2B markets, Marklog’s market, made up of manufacturers and wholesalers, is very sensitive to service quality. Failed deliveries will affect the service perceived from customers who will opt for the chemical substitute given that price levels are exactly equivalent.
•Marklog demonstrates the contribution to profits of industrial marketing management and specially, the logistics function as an extension of the marketing function. The winning team is that which delivers shipments with great punctuality while maintaining low inventories, which will be that company with greater accumulated profits.
Objectives
1. Moving products correctly or incorrectly has an impact in profits.
2. There are benefits in focusing in the cost components of shipping a product from A to B.
3. Profits can be gained from analysing the fit between current and future demand.
4. There is a “logistics mix” that must be found.
5. A company that gets first to a market with a lower cost, has a greater chance of surviving.
6. The distribution function is a part of the marketing mix which holds veto power over the rest of the mix. .
Recommended courses: B2B Marketing, Business Logistics, Distribution, Marketing of Services, International Marketing.
[Download Manual]
MARKESTRATED [See Presentation]
Simulated scenario:
•This a positioning and marketing strategy simulation based on the minor appliance market. The economic environment features a marked life cycle and the emergence of a completely new techonology, making it ideal for strategic decision making.
•Five clearly defined segments, three distribution channels and a specialised sales force allow decisión makers to use the “push” side of the marketing mix. The “pull” components, advertising, positioning and product development are also available.
•Five simulated companies, which are in effect marketing enterprises (or marketing departments organised as profit centers) participate with different backgrounds and past performances, each marketing two branded products though they may market upto five products overall.
•Fifteen market research studies can be ordered including perceptual maps, market experiments, panels and ditribution studies, to assis in decisión making.
•Each decision simulates an annual marketing plan.
•The winning enterprise is that which accumulates during ten simulated years the highest net profit contribution.
Objectives
1. Médium and short term marketing orientation.
2. Focus on the practical application of strategic markleting concepts and tools.
3. Management of a basi or complete line of products.
4. Shows the difference between phyisical and perceptual product attributs.
5. Learning how to interpret fifteen market research studies and how to use them to develop new products.
6. Demonstrates the importance of the product life cycle.
7. Breaks down advertising decisions into its basi elements.
8. Use of the marketing mix as a strategic variable to obtain a spcific position instead of and end in itself.
Recommended Coursos: Strategic Marketing, Marketing Management, Product Management, Sales management, Introduction to Market Research.
CYCLON4 [See Presentation]
Simulated scenario:
•Simulates an industrial company aseembling a consumer product for three different markets.
• Production is initially located in Area 1 from which sales are made in all remaining areas, although management can open factories in them.
•Managers receive eight quarters of operationals and accounting information from a rather complete management information system.
•All functional decisions are simulated – production, finance, sales and marketing and therefore the main decisión making problem is of coordination and strategic planning.
•The winning management team is that which obtaines the highest profits and the best stock price.
Objectives
1. Long range planning manageerial perspective..
2. Focus on the practical application of business plans.
3. Shows how to integrate operating plans and results.
4. Develops habilities to manage and reduce time inested in decisión making through the sue of a web developed information system.
5. Teaches how to coordinate the diverse funcional components of management and specifically how overempasizing one function over the others will not produce adequate results.
6. Shows the importance of balancing inventories, production and sales.
7. Teaches the consequences of good and bad decisions.
Recomenddd Courses: “Capstone” undergraduate coursses in Management, Entrepeneurial Development, General Management.
BRANDSTRAT [See Presentation]
Simulated scenario:
• Brands of upto nine simulated companies, protected by the current strict patent regultions, compete in a global market geographically segmented in five areas: Europe, Latin America, United States, United Kingdom and Asia. Production can be optionally located in one of the five areas.
•All managerial funciotns are simulated: production, finance, sales, marketing, personnel and a complex distrobution channel.
•Marketing decisiones are very detailed: price fixing, advertising, promotion, trade discounts, sales management and new product development..
•Paricipantes must use upto fifty market research studies to make decisiones. These include concept testing, perceptual mapping, experiments and several forms of conjoint analysis.
Objectives
1. Long range perspective in an envinroment of globalised short and quick product life cycles.
2. Advanced application of concepts and tecnique of corporate strategy.
3. Complete set of brand management decisions for up to three products.
4. Brands can be positioned in different geographical segments with different attributes.
5. Develops habilities in the use and interpretation of fifty of the most used market research studies.
6. Demonstrates the importance of managing short product life cycles.
7. Experience is accumulated in the development of complete Marketing Plans coordinated with other mangement departments.
Recommended courses: Advanced Marketing, “Capstone” Strategu and Business Policy post gradua degrees., Brand Management, Market Research.
Manual: 276 pages
MACROSIM
Dr. John A. Carlson, Profesor of Economics at Purdue University, autor of the manual of this simulator, wrote the simulator because he considered necessary for stundents to experience economic environments in order to understand how economies function. Dr. Carlson said….
“....Students are great skeptics. They want to know why bthey should learn what theee teacher thinks they shoould learn. In a cour on economic theory, this reactiuon can come not only from students who hav dicculty grasping the material and need a rational for their lack of understanding but also from students who find the theoretical arguments all very obvious. Granted the assumptions, the conclusions follow logiccally. So what else is new?.
People not mathemiacl functions or geometrical relationships, run an economy. We all know this. The economics theorist knows it too, and his theories are developed from assumptions about human behavior within the confines of environmental constraints. And yet there is a gulf between the abstract woprlf of economic theory and the real world of our own experiences, a gulf that can puzzle and frustrate the beginning student.”
This manual and simulation is designed to help the student realice that the gulf is bridgeable.”
Macrosim was reprogrammed to Fortran 77. It is the only “demonstration” simulation of the laboratory.
Recommended courses: Introduction to Economics, Macroeconomics.
Manual: 42 páginas
ADSTRAT
Designed by Prof. Marshall D. Rice of York University, Canada, Adstrat is an interactive menu-driven simulation capable of acumulating experience in advtersing decision-making. The simulation is the current update version of the original AMCAAM, as published by Dr. Rice with his thesis superviser from U. of Texas Austin Dr. Joh n Leckenby in the Journal of Markeing Education (Fall 1988).
The simulator’s scenario has very realistic fetures enabling participants to experience decision-making in the field of communcation strategy.
Objectives
1. To illustrate the way in which competitors’ decisions affect the outcome f decisions made by mada by managers as well as the ways in which knowledge of competitors’ past decisiones may help in making future decisions.
2. To show on particular method of utilizing multiple intermediate criteria of effectiveness in the selection of creative strategy and media, the concept of creative media responsae values.
3. To apply Bayesina analysis to the advertising budgeting decision.
4. To emphasize the interaction of advterising with price in the determintio of sales results.
5. To illustrate a procediure for the estimation of exposure distributions of media schedules.
6. To develop understanding of the relationship between market share and net profit relative to different advertising spending strategies.
7. To demonstrate the manner in which carry-over effects can be utilized in the planning of expenditures on advertising from one time period to the next.
8. To reveal the effect of media and copy decisions relative to appropriation decisions on share, profit and sales results.
9. To asses the aprticipants decision-making style and to meke this definition of style explicit through resultas relative to those of competiros’ decisions and results.
Context
Three companies compete in the mass consumer products market. The goal of each company is to develop an advertising plan for “Drier” an anti-perspiran aerosol spray. Participant use the analysis software provided by Adstrat to help them decide how much should be spent, what media schedule should be used, what creative strategy is best and what price to charge. Decisions are then registered through Internet and the output analyzes decisions and determines the best advertising strategy of the three companies. This results allow decision-makers determine their decisions in the next round. They quickly learn that the results for a given company depend heaviliy on the decisions made by the other two companies in a given indsutry. At the end of three time periods, a winner is declared as the one that has the highest cumulative profit.
The three companies begin in identical advertising, market and financial positions. Each company is staffed by up to four participants. Accordingly there are as many “industries” of twelve pariticipants as there are students to form an industry.
Manual: 12 pages.
Recommended courses: Marketing Strategy, Consumer Marketing, Advertising Strategy.
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