Today’s Guest Post, by Dr. Robert Donnelly, Professor of Management at Goldey-Beacom College, 
in Delaware, describes how he teaches simulation (Module F). Bob is the author of a new Business Statistics text appearing in 2012, published by Prentice-Hall.
Simulation is one of my favorite topics in the OM course here at Goldey-Beacom College. Students seem interested in learning how many relatable applications involve simulation. I use the video sports games as an example. I also show them Strat-O-Matic baseball cards which is a dice game based on actual player performance from the previous season.
I like to schedule this topic at the end of the semester because it allows me to revisit the EOQ and waiting line problems that I cover earlier in the course. I present simulation as an alternative approach when the assumptions for the EOQ and waiting line models don’t hold true. Then I apply simulation to the overbooking problem with airlines and hotels. As consumers, most students don’t realize the benefits to overbooking until they work through a simulation model.
I also demonstrate Extend, which is simulation modeling software. I set up the queuing model with this software in class (Problem F.8) and simulate 40,000 customers and compare these results with what we found doing it on the board. I show them an Excel file that simulates the inventory problem from the Render-Stair Managerial Decision Modeling book (Chapter 10) and compare that to what we did in Module F. We wrap up the topic by talking about two actual business examples where the simulation model resulted in significant savings for the companies.
I like this topic because it catches the students’ attention and, for the most part, they do well solving these types of problems on exams.