LTL I: A Trucking Simulation Game Developments in Business Simulation & Experiential Exercises, Volume 14, 1987 102 LTL I: A Trucking Simulation Game George C. Jackson, Wayne State University Thomas McCleod, Stroh Brewing Company ABSTRACT LTL is a hand scored, computer assisted game for teaching students the basics of managing a less than truckload (LTL) trucking operation. Students must develop an overall strategy by selecting the number and locations of terminals, the rates to be charged and the size and composition of their fleet of trucks. Once the company is established the students must operate their company on a day to day basis. Daily operations involve dispatching trucks to pickup and deliver freight moving between ten different markets. They will attempt to serve as much demand as possible while minimizing the miles traveled and maximizing the use of vehicle capacity. INTRODUCTION “It is not very difficult to have a successful trucking operation. All you have to do are five things: First, get the freight from the point of pickup to the point of delivery as rapidly as possible. Then, do it with as little loss and damage as possible. If you can do both of these things, you will get a lot of business. To make sure you get as much as possible, you have to go out and tell everybody what a good job you are doing. Once you have acquired the maximum possible revenue, you must see to it that you load the maximum possible freight revenue per mile into each of those trucks and trailers. Then, you keep your costs as low as possible. If you can do all five of those possibilities, you make the most money possible, and that’s all there is to it” [5, p. 456]. These concepts remain the foundation principles on which the trucking industry is based today 30 years since this statement was made. Though the environment of the trucking industry has evolved from strictly controlled and regulated to something approaching a highly competitive free market, the basic principles mentioned above are even truer today than they were in 1956. Good service and careful cost control spell success. However, putting these simple truths into practice is not as easy as it sounds. In the Less Than Truckload (LTL) business the carrier sells a service. Its demand is immediate and must be met in the same manner. A simple LTL setup consists of several trucks and a pickup/delivery terminal. The terminal is the heart of the operation. At the terminal, shipments are collected from nearby customers, unloaded and consolidated into delivery trucks with other packages headed in the same direction. Incoming shipments are unloaded, sorted and delivered. The pickup and delivery terminal also functions as a sales office, and as a place where billing, claim handling, and limited vehicle maintenance is performed. “LTL” I is a developing educational hand scored simulation game of the less than truckload (LTL) trucking industry. It is intended for use in business logistics and transportation management courses. The game places the player in the role of an executive decision maker. The players will not be competing against the game itself, but the other teams. The teams interact among themselves creating their own unique competitive environment. Through this process the players will learn about decision variables in the industry and their interdependencies. The player’s knowledge of the industry and how to adjust to the changing environment will expand as the competition grows and the game progresses. There are currently no games available for teaching transportation management. There are several logistics games such as LOGSIMX at Indiana University [1] and BOY GEORGE [3] which contain transportation as an important component but do not treat it in detail. The logistics games are also oriented toward shippers of products rather than to carriers of products. AIRWAYS [2] is a game in which the student manages the marketing of an airline, the student is involved in making marketing decisions for their airline. There are no games available which place the student in the position of the operator of a transportation company. NATURE OF THE GAME The task for each team/company is to design and operate a less than truckload (LTL) trucking service to a self- contained region with ten markets. Each market will generate a stochastically determined quantity of demand, for each of the other nine markets each day of play. Demand is expressed in cubic feet. The portion of the demand or market share for each company will be determined on the basis of previous service levels to that market pair and the company’s relative rate level. Each company must then pickup and deliver its share of the freight as efficiently as possible. Demand must be serviced as quickly as possible but in such a way that the number of miles traveled is minimized and vehicle capacity is used to the maximum. If a company decides not to pickup freight from one market because it would be too costly, the freight will still be there tomorrow but its share of the market will decline in future periods. Teams are evaluated on their profit performance. PLAYING THE GAME At the beginning of each game the teams must design their company. They are given a history of freight demand for each market pair and the mileages from and to each market as well as several major highway intersections. Each team must then decide the following: (1) locations of its terminal or terminals, (2) size and composition of its fleet of trucks, and (3) rates to charge between each market. Terminals can be located at any market or major highway intersection. Each company must have at least one terminal. The number and location of terminals cannot be changed once the game begins. There is a fixed charge per day per terminal of five hundred dollars. Each team can choose two types of vehicles for its fleet: (1) a tractor and semi-trailer with 3,000 cubic feet of capacity costing $1.00 per mile to operate and $60.00 per day in fixed costs and (2) a straight truck with 1,500 cubic feet of capacity costing $0.75 per Developments in Business Simulation & Experiential Exercises, Volume 14, 1987 103 mile to operate and $25.00 per day in fixed costs. In addition, extra semi-trailers can be purchased for $15.00 per day in fixed costs. The size and composition of the fleet can be changed during the game but with a five day waiting period from the time of the decision. Rates from and to each market must be set before play can begin but they can be changed daily during the game. Once the basic system is established, the game can begin. Demand is generated from a normal distribution using a random number for each market pair in both directions. Initially, each team is given equal shares of each market. The daily task of each team is to pickup and deliver freight for its customers. All freight must go through a terminal during its trip from its origin to its destination. There is a $0.10 charge per cubic foot for handling at each terminal. The first task of each day is to pickup freight by dispatching each vehicle to a specific market or markets. Demand is known for the day and it must be decided which vehicles will be sent to which market(s). Trucks can go to more than one market but there is a $20.00 stop-off cost. The next task is to deliver the freight that was picked up. Again, it must be decided which vehicles will make which deliveries. For both pickups and deliveries, the company will attempt to service all of its demand while minimizing miles traveled and maximizing vehicle capacity. The team may choose not to satisfy all of its demand on a particular day because of costs or capacity constraints. Demand not satisfied today is added to the next day’s demand. After pickups and deliveries have been made, the team must decide whether to change its rates and fleet of trucks. Rates go into effect immediately while fleet changes take five days. In summary, the following decisions must be made each day: (1) dispatch trucks to pickup customer freight, (2) dispatch trucks to deliver customer freight, (3) change rates, and (4) change fleet. ADMINISTRATION OF THE GAME At this stage, LTL I is still a hand-scored game which forces students to understand are at least conduct all of the necessary calculations. The primary disadvantage is that the administrator must check everyone’s computations and keep records of performance. The daily costs and revenues are as follows: The fixed costs per day are the easiest to calculate. The variable costs are more complex because there are 50 mileages which must be calculated per team. The total cubic feet handled per team is not difficult to calculate. The most complex task for the administrator is to calculate revenues and demands for each team because there are 10 x 10 demands. The demand and revenue from each point to each point must be calculated. In addition, market shares for each team for each market pair must be determined. Further, each team will have their individual rates from and to each market which they can change each day. Fortunately, these can be determined and maintained in a structured manner. The game should be played for at least 10 periods so that the full effect of various decisions and strategies can be played out. In the latter stages of the game the administrator may wish to allow teams to bid for business on a contract basis. In other words, the carrier could lock up all of the freight between certain pairs of markets for a long period of time. The number of teams should be between three and five- - three so that a sufficiently competitive environment will be created and five so that the mental health of the administrator will not be too severely tested. CONCLUSION LTL I is a transportation management game and as such fills a void or niche. It is relatively simple but like many games presents the student with a surprisingly complex task. It is designed to give the student a feel for the day to day operations of a freight company but more importantly the student must confront the challenges of developing an overall strategy. The game has been designed to be as simple as possible while still retaining the essential decisions faced by a transportation company. REFERENCES [1] DeHayes, Daniel, “LOGSIMX,” Proceedings of the Third Annual ABSEL Conference, 1975. [2] Fisk, James T. and Raymond P. Fisk, Airways: A Marketing Simulation, (New York: John Wiley & Sons, 1986). [3] Jackson, George C., James W. Gentry, and Fred W. Morgan, “A Computerized Logistics Came for Micros,” Proceedings of the Thirteenth Annual ABSEL Conference, 1985, pp. 46-49. [4] Mason, Lindon W., Local Trucking, (New York: McGraw-Hill Book Company, 1951). [5] Taff, Charles A., Commercial Motor Transportation, (Homewood, IL: Richard D. Irwin, Inc., 1955). Table of Contents Volume 14, 1987 Simulation Gaming as An Experimental Context for the Study of Multicriteria Decision Making How to Multiply Your Management Game Grading the Personnel In-Basket Exercise Simulation: The Players™ Perspective The Acute Susceptibility of Nominal Grouping to Negativity The Relative Value of the National ABSEL Meetings: An Analysis of Perceptions by Faculty and Deans A Survey of Behavioral Labs Used by American Business Schools A Structured Framework for Applying Conceptual Models to Problem Analysis: Hardening Up An Expert System Approach for Teaching Marketing Case Analysis From Theory to Practice: A Model for Teaching Beginning Advertising The Use of a Simple Forecasting Technique During an Interactive Computerized Business Game An Investigation of the Relationship Between Formal Planning and Simulation Team Performance and Satisfaction The Exponential Logarithm as an Algorithm for Business Simulations Learning macroeconomic Theory and Policy Analysis Via Microcomputer Simulation Laptop: A Principles of Marketing Simulation Teaching About Sampling in a Marketing Research Class Integrating Decision Support Systems and Business Games Demand Generation in a Service Industry Simulation: An Algorithmic Paradox ABSEL - At a Crossroads? Research on Predicting Performance in the Simulation An Expert System for Financial Planners "Developing Various Student Learning Abilities Via Writing, the Stock market Game, and Modified Marketplace Game in Beginning Macroeconomics" Professional Activity Reports: Getting back to Basics Œ A Preliminary Investigation "A Comparison of Performance, Attitudes, and behaviors of MBA and BBA Students in a Simulation Environment: A Preliminary Investigation" Decision Styles and Student Simulation Performance: A Replication Personal Power Strategies: An Experiential Exercise LTL I: A Trucking Simulation Game Total Enterprise Business Games: An Evaluation Can the Skill of Management be Taught? Developing Critical Thinking and Effective Communication Meaningful Notebooks and Enhanced Learning Using a Totally Menu-Driven Data base and Decision Support (DSS) Program Using a Computerized Menu-Driven Data Entry and fiWhat-Iffl Program as a Pedagogical Enhancement for Management Simulation Using a Joint Project Involving MBA Marketing Management and Undergraduate Marketing Research Students to Teach Marketing Research Testing the PAGE Technique: Results and Further Developments A Comparison of Student Perceptions with Accepted Expectations for Business Simulations "Conflict Management in Action: Verbal Strategies, Nonverbal behaviors and Conflict Styles" Dramatic Monologues as Surrogates for Experiential Learning Influencing One™s Superior: An Assessment and Exercise Personality Traits and Organizational Cultures: Two One-Hour Experiential Learning Exercises Computype: A Strategic Marketing Game Open System Simulations and Simulation Based Research "Teaching Forecasting to the Masses: Little Decision Support Training, But a lot of Answers" Goal Setting and Performance Evaluation with Different Starting Positions Œ The Modeling Dilemma The Gamesmanship of Pricing: Building Pricing Strategy Skills Through Spreadsheet Modeling Teaching MPR Experientially Through the Use of Lotus 1-2-3 Business Simulation Through Activities of a Manufacturing Company Simulated Stock Broker Teaching Employee Counseling Skills to Management Students: A Simulation Airline: A Strategic Management Simulation Developing Simulations and Experiential Exercises on the Personal Computer: Some Critical Issues A Powerful Tool Œ For What? An Integrative Systems Approach to Simulating Free Enterprise in a Small Business Course in a Business School Profits: The False Prophet The Use of Expert Systems to Develop Strategic Scenarios: An Experiment Using a Simulated Market Environment An Interdisciplinary Workshop: Spreadsheet Modeling and Case Analysis Techniques for Beginning Executive MBA Students An Innovative Approach to an O. D. Class Œ The Creative Interaction The Application of Spreadsheet Software Technology to Complete Taxpayer Elections Experiential Learning as the Cornerstone of an Industry Management Course "Identifying, Exercising and Enhancing Right Brain Skills in the Business Classroom" Utilizing Envisionary Technology in the Business Policy Course: An Experiential Pedagogy Business Simulation in the Policy Course: A Survey of American Assembly of Collegiate Schools of Business The Moving Van: Vehicle to Success of Disaster for the Two-Gender Work Force Oil and Gas Well Investment Analysis Using the Lotus 1-2-3 Decision Support System Team Cohesion Effects on Business Game Performance