UNDERSTANDING YOUR BUSINESS THROUGH HOME-MADE SIMULATOR DEVELOPMENT Developments in Business Simulation and Experiential Learning, Volume 26, 1999 65 UNDERSTANDING YOUR BUSINESS THROUGH HOME-MADE SIMULATOR DEVELOPMENT TakaoTerano *1, Hisatoshi Suzuki *1, Yasushi Kuno *1, Hiroshi Fujimori *2, Hiroaki Shirai *3; Chizuru Nishio *1, Noboru Ogura *1, Mitsuo Takahashi *2; *1 GSSM, University of Tsukuba, Tokyo; *2 Reitaku University; *3 Fujitsu Information Network Systems Ltd. ABSTRACT This paper discusses a novel approach to a business simulator course. The course we are developing consists of (i) Simple gaming experiment among multiple students using Alexander Islands, a tiny business simulator on the WWW; (ii) Lectures to let students to understand the core concepts of systems management through the simulation; and (iii) Home-made simulation model development by the students themselves using a business model description language (BMDL) and a business model development system (BMDS). Our course is unique in the sense that, through the business simulation, we aim to develop students' skills (1) to implement their own specific models of business firms, (2) to develop information systems for the firms, and (3) to understand business processes among companies. This paper describes the background and motivation, basic principles, the architecture and implementation of BMDL/BMDS, and experimental results. INTRODUCTION This paper reports a novel approach to a business simulator course at Graduate School of Systems Management (GSSM) of Tsukuba University. The goals of the course are to develop students' skills (1) to implement their own specific models of business firms, (2) to develop information systems for the firms, and (3) to understand business processes among companies. In order to achieve the goals, the most unique point of the course is to let the students develop their own business simulators using a simple Business Model Description Language (BMDL) and its Business Model Development System (BMDS). The developed simulators are run and evaluated by the other members including lecturers on the WWW environment. Through the experience, the students will understand the concepts and skills of business management. This paper describes the background and motivation, basic principles, the architecture and implementation of BMDL/BMDS, some results of three year course experience, and future issues. BACKGROUND AND MOTIVATION Business simulator is a common vehicle to study business and management principles under controlled virtual situations. The conventional approach to business simulation courses is, at least in Japan, to educate naive students to understand the concepts of management, accounting, business processes, and/or the basic techniques for business analysis. There are many conventional gaming simulators in the literature in order to attain the goals (for example, refer to Elgood (1993), Richardson (1982), Morecroft (1984), and Rye (1994)). However, at GSSM, such approaches are not enough. The students we have are all business people from various industries. They have their own jobs in daytime, different expertise, and different backgrounds in their experience. Therefore, although the academic levels of the students are so diverged, they will not be satisfied by playing-only simulators. They want to know how to make good management decisions by developing business models, decision support tools, and business information systems Henshaw (1984). Developments in Business Simulation and Experiential Learning, Volume 26, 1999 66 To meet the requirements and based on our previous experience Fujimori (1993a), Fujimori (1993b), Shirai (1994), Shirai (1996), Takahashi(1986), we set the following goals to design the business simulator course: 1. The game we will use is so simple for business people with various background, especially for those who have few accounting knowledge, that they can understand the basic process of business simulations. 2. However, it is enough complex for those who have real and practical business experience to play the simulation to understand the advanced concepts of decision making and business processes. 3. Using the simulators, they will be highly motivated to further study advanced courses at GSSM including operations research, information systems, decision theory, accounting, marketing, computer programming, artificial intelligence, and/or computer networks. 4. A dozen of students can execute the simulators at the same time and different places, therefore, it is desirable that the simulator will run on a computer network or on the World Wide Web. 5. To let the students to easily develop their own business models, a new BMDL and BMDS should be designed and implemented. BMDL should be so simple that the students with few skills on computer programming can understand it and write their own models. 6. To guide the students, a typical business model and simulator should be developed. The simulator should be both executable as the introductory tool for the course and readable for students to understand how the model is built, and how the simulation is executed. The simulator should be used as an example in the introductory course. Based on the above, as a result, the course we are developing consists of (i) Simple gaming experiment among multiple students using Alexander Islands, a tiny business simulator on the WWW; (ii) Lectures to let students to understand the core concepts of systems management through the simulation Knotts (1998), Wolfe (1998); and (iii) Home-made simulation model development by the students themselves using BMDL and BMDS. FRAMEWORK OF ALEXANDER ISLANDS: A TINY BUSINESS SIMULATOR Alexander Islands is an introductory gaming simulator developed to meet items 1, 2, and 6 of the requirements in the previous section(please refer to Fujimori (1999)). The simulator models a business process of (1) purchasing consumer items (e.g., personal computers) from the head-quarter, (2) selling them to two different markets (Herbert Island and Simon Island)1 and (3) among ten competitors or ten players, making marketing decisions on ordering, advertising, pricing, and accounting. FIGURE 1: BUSINESS MODEL OF ALEXANDER ISLANDS The business model of Alexander Islands is summarized in Figure 1. At every turn (monthly) 1 The name of the simulator is taken from the name of Professor H. A. Simon. Head- quarters Banks Simon ls. Herbert ls. Players Markets Order Items Purchase Items Borrowing Repayment Supplies DemandsMarketing Decisions: -Order of Qty of Sales Items -Ads Preparation for Radios and/or Newspapers -Price Determination -Amount of Borrowing /Repayment Developments in Business Simulation and Experiential Learning, Volume 26, 1999 67 of the game, each user can order any amounts of a sales item from the head quarter, prepare advertises for radio and/or newspapers, determine sales prices for the two markets, make accounting decisions on borrowing and/or repaying money. The demands of the two markets are given from the environment. The model implicitly includes a stock management problem in operations research, demand forecasting in decision making, and advertise strategy in marketing. Although the simulator does not include explicit decision support functions (e.g., Gray (1986)), it is desirable for the students to aware the existence of such practical problems in the simple gaming environment. Therefore, to properly make the decisions during the game, the players should have some decision aids on a PC, for example, spread sheet programs. As the simulator is simple enough, to make decisions, it takes within 10 minutes even for naive users, thus, the time to complete one game round is about 70 minutes. It is enough short for the students with their own businesses. Alexander Islands consists of basic mechanisms of the business process and user interfaces for ten players and one manager. The user interfaces run on a web browser. The first version of the simulator was implemented in the C language, and re-implemented in BMDL in 1997. The source codes of Alexander Islands currently consists of about 450 steps of BMDL instructions including detailed comments. The length is enough short that the students can read the contents and understand how it works. FRAMEWORK OF BMDL/BMDS This section describes the architecture of Business Model Description Language and Business Model Development System. BMDL/ BMDS was designed to meet the items 3, 4, and 5 of the requirements in Section 2. Figure 2 shows the system configuration. A model developer describe his or her business model in BMDL. Sample codes of BMDL is shown in Figure 3. The example in Figure 3 is a simulator designed for three players and one manager with ten game rounds. The game is executed as follows: At beginning, each player inputs the sales price; then the cheaper the price is, the more he or she can sell the goods; all ordered goods are sold at every round; new goods and a decision is made in order to supply the goods to keep the same level of the stock. FIGURE 2: ARCHITECTURE OF BUSINESS MODEL DEVELOPMENT SYSTEM The interfaces for players to give a price and the ones for a manager to browse the conditions of all players are also included in the description. In the original codes, the variables of the model are described in Japanese characters, however, in Figure 3, they are translated capital ASCII characters. The mechanism enables the user to easily develop home-made simulators. A business simulator written in BMDL is first translated into corresponding CGI scripts and C programs by BMDL translator. The programs are then run on a host computer with a WWW server and the model variable data in the form of spreadsheets. Finally, players execute the simulation through browsers on the WWW environment. Model variables are managed in a model database with the configuration shown in Figure 4. browser player browser player browser player browser Game manager CGI scripts + C programs Model variables WWW server host BMDL translator BMDL description WWW server Developments in Business Simulation and Experiential Learning, Volume 26, 1999 68 Simulation is executed with the architecture as shown in Figure 5. A game manager have a task # # NOTE: Original codes includes KANJI characters to denote variables. # Size of the Game # def game-name Price Only def max-team 3 def max-round 10 password ctr t1 t2 t3 # Series constants definition scon DEMANDS 497 1195 2447 4037 5406 6626 8177 9451 9945 10713 # Global constants definition gcon ORDER_PRICE 90 gcon MINIMUM_PRICE 50 # Input Variables and Input Window definition ipage price INPUT_PRICES

Input Price

Input Sales Price

ivar SALES_PRICE range 0 1000 120 # Model variables and their initial values of each team. tvar NUMBER_OF_SALES tvar PRICE_OF_PROCEED tvar PRICE_OF_ORDER tvar AMOUNT_OF_PROFIT tvar AMOUNT_OF_DEPOSIT 150000 # Computation Model Description pinv NUMBER_OF_SALES = DEMANDS by SALES_PRICE - MINIMUM_PRICE; tlet NUMBER_OF_SALES = rint(NUMBER_OF_SALES); tlet PRICE_OF_PROCEED = NUMBER_OF_SALES * SALES_PRICE; tlet PRICE_OF_ORDER = NUMBER_OF_SALES * ORDER_PRICE; tlet AMOUNT_OF_PROFIT = PRICE_OF_PROCEED - PRICE_OF_ORDER; tlet AMOUNT_OF_DEPOSIT = AMOUNT_OF_DEPOSIT@1 + AMOUNT_OF_PROFIT; # Output description ooption fmt %1.0lf opage sales SALES STATUS public

SALES_STATUS_REPORT

$ ROUND-th: Demands: $ DEMANDS begintable out teams out teams-vars SALES_PRICE::%5.3lf NUMBER_OF_SALES PRICE_OF_PROCEED PRICE_OF_ORDER AMOUNT_OF_PROFIT endtable # opage balance PROFIT STATUS teamspec

PROFIT_STATUS REPORT

$ ROUND-th, TEAM: $ TEAM, TOTAL_DEMANDS: $ DEMANDS

begintable out values 'ITEM 'INCOME 'OUTGO out values 'LAST_TERM_DEPOSIT AMOUNT_OF_DEPOSIT@1 - out values 'AMOUNT_OF_INCOME PRICE_OF_PROCEED - out values 'AMOUNT_OF_OUTGO - PRICE_OF_ORDER out values 'AMOUNT_OF_PROFIT - AMOUNT_OF_PROFIT out values 'THIS_TERM_DEPOSIT - AMOUNT_OF_DEPOSIT endtable # opage allvteam ALL_VARIABLES_THROUGH_TEAMS control

$-ROUND ROUND: ALL_VARIABLES_THROUGH_TEAMS

begintable out teams out teams-allvars endtable # opage allvteam ALL_VARIABLES_THROUGH_TEAMS control

TEAM$-TEAM: ALL_VARIABLES_THROUGH_TEAMS

begintable out rounds out rounds-allvars endtable # # end # FIGURE 3: SAMPLE CODES OF BUSINESS MODEL DESCRIPTION LANGUAGE of controlling the input information availability, simulation calculations, simulation rounds, views of public, team, and analysis data. The other game players can input and modify the input variables based on public and team-specific information and their decisions. Figure 6 shows a sample of the manager's interface. Figure 7 shows a sample of players' input screen . FIGURE 4: MEMORY MANAGEMENT OF BUSINESS MODEL DEVELOPMENT SYSTEM FIGURE 5: FUNCTIONS OF MANAGER browser player browser player browser Game manager WWW server Controller function -view input availability -model calculations -advance game round# -view public data -view team data -view analysis data Player function -input decision (ivars) -view public data -view team-specific data M[i]= F(M[0..i-1] ,I[0..i]) Model variables Input variables Round 0 Round 1 Round i-1 Round i M[i] I M Developments in Business Simulation and Experiential Learning, Volume 26, 1999 69 AND PLAYERS OF BMDS/BMDL SIMULATION FIGURE 6: SAMPLE WINDOW OF SIMULATION ENTRY EXPERIENCE AND DISCUSSION Outline of the Course Experience The course was started in 1996, when we had no specific environments. In 1997, Alexander Islands in the C language was used in the introductory simulator (sub-)course, and BMDL version was introduces for advanced course to develop their own business models. The 1996 program was not welcome by the students because the supplementary tasks ware too heavy to understand the business management principles. The 1997 program was so remarkably improved that the students could understand the model of Alexander Islands and could develop the home-made simulators. Questionnaire data on the course ware gathered. Amongst 23 respondents of the questionnaire, (1) 22 students replied the course using Alexander Islands was interesting, (2) 17 students thought the level of the course was moderate, and (3) 18 students ware comfortable in the WWW environment. FIGURE 7: SAMPLE OF SIMULATION DISPLAY FOR A MANAGER The summary of the models they developed is shown in Table 1. They cover vary wide task domains in practical business situations, although our BMDL/BMDS toolkit mainly fit the style of assembly type production and sales companies. TABLE 1: HOME-MADE SIMULATORS DEVELOPED IN THE 1997 PROGRAM Developments in Business Simulation and Experiential Learning, Volume 26, 1999 70 (1) Model of production line improvement via research & development decision making (2) Model of equipment replacement for Production line improvement (3) Model of resource purchasing for Production company (4) Model of Research and development investment for new products (5) Model of model changes of products (6) Placement of logistic bases BS/PL/Cash flow Model 1998 Program Plan and Tiny-P Model In the 1998 program, we provides students with one much more simple business model: Tiny-P which runs on our environment in order to let students use it as a prototype or a sample source codes for their own projects. The model is originally designed to be used as a small case study of our course which simulates a production firm. Although it is simple, it can be extended to meet student’ complex requirement. The specifications of Tiny-P are summarized in Table 2. The corresponding source codes in BMDL contains about 100 lines of codes including comments on the case. TABLE 2: SPECIFICATIONS OF TINY-P MODEL (1) Kind of Products: Only one Product A (2) Kind of Material Parts: Only one Part a (3) Decision Variables: Sales View: One: Price of Product A Production View: Two: Number of Product A Number of Order a (4) How to Order Parts: Parts Price: Constant Number of Parts: Provided the number exactly required Lead Time: One Term (5) How to Make a Product: The Product consists of 50 parts Lead Time: One Term Evaluation In the 1998 program, we think we have attained most design goals described in Section 2. From the questionnaire data among 15 respondents, we have got the following implications: (1) all of them replied that the course with Alexander Islands was interesting and that recommended to the new comers; (2) 11 students thought the level of the course was moderate, and (3) most of them requested more intensive lectures and discussions among students. The plan of developing home-made simulators in 1999 includes the candidates in Table 3. TABLE 3: PROJECT CANDIDATES FOR SIMULATOR DEVELOPMENT IN THE 1998 PROGRAM (1) Marketing competition model (2) Model of production industries (3) Model of accounting systems (4) Model of finance systems�(5) Model of players of business simulations�(6) Scenario making for business simulators From these observations, we believe that our novel course is of success for those students with various background and expertise. The important implication is that using business simulation approach and the BMDL/BMDS toolkit, we can approach to the business processes we would like to model and analyze. CONCLUSION AND FUTURE WORK This paper have described our experience of developing a novel course on business simulator. Unlike conventional gaming simulation courses, which aim at studying basic principles of simulated business processes, accounting, or, data analyses techniques, the objectives of our course is to develop skills (1) to implement their own Developments in Business Simulation and Experiential Learning, Volume 26, 1999 71 specific models of business firms, (2) to develop information systems for the firms, and (3) to understand business processes among companies. To attain the objective, the most remarkable point is that the course contains (1) Alexander Island: tiny business simulate on the www, and (2) Development of home-made models via BMDL and BMDS. The approach is promising for business simulator courses to develop more advanced systems and concepts. Future work includes (1) to improve the functions of BMDL/BMDS by providing agent-based technology Bradshaw(1997), Russel 1995), Terano(1998) in (Distributed) Artificial Intelligence, which will enable the user to execute multi-player simulations although (human) users are not multiple, And (2) to develop corresponding textbooks to guide the courses. ACKNOWLEDGEMENT The research is supported in part by the Grant-in-Aid for Scientific Research of the Ministry of Education, Science, Sports, and Culture of Japan, the contract number is 09558044. REFERENCES Bradshaw, J. M., ed. (1997). Software Agents. AAAI/MIT Press. Elgood, Chris.(1993). Handbook of Management Games. Gower Press. Fujimori, H.(1993a): Design and Operation of Business Games on a Network Environment. Journal of Japan Association of Simulation and Gaming, Vol. 3, No. 1, pp. 15-24 (in Japanese). Fujimori, H.(1993b): Application of Business Games in Japanese Companies. PASOKON LITERACY, Vol. 18, No. 12, pp. 17-24, (in Japanese). Greenblat, C. S.(1989): Designing Games and Simulations. Sage Publications. Gray,P., Borovits, I.(1986): The Contrasting Roles of Monte Carlo Simulation and Gaming in Decision Support Systems. Simulation, Vol.47, No.6, pp.223-239. Fujimori, H., Kuno, Y., Shirai, H., Suzuki, H., Terano, T. (1999): Alexander Islands: GSSM Tiny Business Simulator on the WWW. Proc., ABSEL 1999. Henshaw, R. C., Jackson, J. R.(1984): The Executive Game. Richard D. Irwin, Inc. Knotts, U. S.(1998): Teaching Strategic Management With a Business Game. Simulation & Gaming, Vol. 28 , No. 4, pp.377-394. Morecroft, J. D. W.(1984): Strategy Support Models. Strategic Management Journal, Vol.5 ,pp.215-229. Richardson, G. P., Pugh, A. L.(1982): Introduction to System Dynamics Modeling with DYNAMO. Productivity Press. Russel.S, and Norvig.P. (1995): Artificial Intelligence A Modern Approach. Prentice Hall. Rye, David E.(1994): The Corporate Game: a Computer Adventure for Developing Business Decision-Making Skill. McGraw-Hill. Shirai, H.(1994): Gaming Simulation for Management Consulting. Journal of Japan Association of Simulation and Gaming, Vol. 4, No. 1, pp.129-137 (in Japanese). Shirai, H.(1996): Gaming Simulation for Problem Setting. Journal of Japan Association of Simulation and Gaming, Vol. 4, No. 1, pp.85-92 (in Japanese). Takahashi, M., Fujimori, H.(1986): Introduction to Business Games Using PCs. NIHON-KEIZAI-SHINBUN-SHA. Terano, T., Kurahashi, S., Minami, U. (1998). TRURL: Artificial World for Social Interaction Studies. Proc. 6th Int. Conf. on Artificial Life (ALIFE VI), pp. 326-335. Wolfe, Joseph., Frutzsche, D. J.(1998): Teaching Business Ethics With Management and Marketing Games. Simulation & Gaming, Vol. 29 , No. 1, pp.44-59. Table of Contents Volume 26, 1999 ABSEL's Historical Research Interests Back From the Future: An ABSEL Merlin Exercise for the Year 2005 The Contributions of ABSEL During the 1980's ABSEL's Contributions to Experiential Exercises in the 90's ABSEL's Contributions to Experiential learning/Experiential Exercises: The Decade of the 1970's Business Simulations - Algorithms and Model Enhancements: A 25 year Review A Study of the ETS General Field Test as an AACSB Assessment Tool and the Impact of Experiential Exercises and Simulation on Learning A Framework for Assessing the Competencies Reflected in Simulation Performance Developing A Learning Culture: Assessing Changes in Student Performance and Perception Financial Simulation Using Distributed Computing Technology Analyzing Managers' Judgements and Decisions with an Educational Business Simulation Understanding Your Business through Home-Made Simulator Development An Examination of a Reanalysis of the Impact of a Market Leader on Simulation Competitors' Strategies Applying Shocks to TE Simulations: A Demonstration Increasing Efficiency of Management Skill Assessment A Testbank for Measuring Total Enterprise Simulation Learning Developing Leadership Skills - Video Live! LEADSIMM: Collaborative Leadership Development for the Knowledge Society A Team Approach to Producing Multi-Media Laptop and Video Formatted Presentation Tinkertoys Revisited: Exploring Trust Based Relationships Overall Dominance in Total Enterprise Simulation Performance Success or Bankruptcy: The Relationship between Personal and Goal Orientation and Simulation Performance Assessing the Effects of Feedback: Muti-method and Muti-directions in Multi-pedagogical Courses The Missing Ingredients in Experiential Learning Purpose and Learning Benefits of Business Simulations: A Design and Development Perspective Building Capabilities for Change through Laboratory Simulations Modeling Innovation as a Process of Design in Educational Business Simulation The Need to Measurer variance in Experiential Learning and a New Statistic to do so Assessing Effectiveness of an Experiential Oriented Course Over Time Developing Participant Satisfaction Models of Experiential Exercises in Business Education Perceptions of Learning in TE Simulations Students' View on the Use of Business Gaming in Hong Kong Management Gaming's Lost Opportunity: Meditations about the Russian Experience and Prospects for the Future Unanticipated Enhancements in the Business Strategy and Policy Game when Running in Windows 95 Using a Business Game to Demonstrate Broad Business Concepts A New Model for Business Courses (Getting the Student Connected) Seeing the Forest and the Trees: Integrating Knowledge Using Large Scale Simulations in Capstone Business Strategy Classes Is It Here To Stay? A Roundtable Discussion of the Inter-Group Interaction Interactive Tools Used in Applying Financial Concepts Strengthening Essential Skills through a Finance Exercise: Calculation of Beta A Model of Currency Exchange Rates Understanding Currency Exchange Rates: A three-part Exercise Student Experiences in the World Intercollegiate Business Game Competition Student Experiences in the International-Collegiate Business Policy Game Competition Using Boards of Directors in Simulation Environments: Comments From Board Members Sharing Best Practices: Teaching Smarter, Not Harder Star Power: A Simulation for Understanding Power and Empowerment The Marketing Game: A Marketing Principles Simulation Alexander Islands: GSSM Tiny Business Simulator on the WWW Putting Strategy into Strategic Business Games Industry Analysis, Porter's Five Forces Model and Strategic Group Maps in the Business Strategy Game Simulation The Use of Concept Mapping to Improve Student Performance and Understanding of Strategic Management Concepts: A Comparison of Techniques Transformational thinking in the Organizational Behavior Course: The Use of Metaphor as an Assessment Tool Creation of a Virtual Learning Community for the Global Virtual Enterprise Project Inter Institutional use of Educational Resources: Joint Use of Management Simulation Games Business Insights: Theory and Practice with the Aid of a Business Simulation Progress: An Experiential Exercise in Development Marketing The ABC's of teaching the Theory of Constraints to Undergraduate Business Students Demonstrating Principles of Organizational Purchasing Behavior through an Experiential Exercise The Virtual Manager: A Different Simulation for Managing Complexity When the Rules are changing and Chaos Breeds Innovation: Recapturing the Value of Constructive Thinking and Play in Simulation Training The Pitfalls, and Potential, of Actual Events as Problem Drivers Using Business Games to teach Environmental Awareness and Green Management: The International Experience with the ENSIM Game A Review of my ABSEL-Related Work Simulation of Government: A Workshop Using GEO Creating Internet-Based Games Using Perl and JavaScript Who's on First? Exploring the Concepts of Problem-Based Learning, Experiential Learning, and Lifelong Learning Students Learn Customer Service and Selling while Conducting Research So You Want to Run an NFL Football Team–An Honors Interdisciplinary Project Supervised Internship: The Employer's Perspective Using Computer Assisted Simulation to Teach International Business Strategy: A Case of the Multinational Management Game (MMG) Multi-Cultural Experiential Learning: A Computer Simulation in China An Appreciative Stance on Diversity as We Move into the 21st Century: A Timeline Exercise to Identify Key Experiences in Good Work Relationships between Black and White Peers A Day in the Life of an Interactive, Real Time, and Internet Delivered Course: A Demonstration Comparing Internet Search Engines: An Experiential Learning Exercise Total Enterprise Simulations and the Internet: Assessing Student Perceptions and Preferences Teaching Accounting Information Systems in a Practicum Format Providing Experiential Learning in Accounting through a Field Study Payroll Project A Spreadsheet Based Business Simulation Game Computer-Behavioral Simulations Training for Project Managers Simulation Scenarios - Rationale and Illustration