In prior guest posts, I evaluated 3 of the 5 simulations that are available free in MyOMLab with the Heizer/Render/Munson text. Today, I look at the Inventory Management simulation. I like that it deals with the retail industry, from the store manager perspective, because students feel more comfortable thinking about the physical needs of products in a retail scenario. The simulation quickly takes them from that initial comfort level as they get calls, emails, etc. about issues to manage decisions. Finding that balance between too much and too little inventory to achieve profitability goals is key in this simulation, just as in many real businesses.
This simulation requires students to apply holding and ordering costs, as well as watch for sales trends and think about forecasting orders. Many students often buy too much or too little until they start to think about EOQ and ROP to find a rhythm. They also see how their decisions impact profits as they work toward a $1 million goal. While difficult, students often say it is the best of the 5 MyOMLab simulations. Some even use the word fun!
Why? Because they feel the practical aspect of a simulation experiencing the needs and issues in these kinds of positions, with a chance to practice and not impact actual money. Inventory is always a delicate balance to keep customers happy and align to profit goals. Students often do this simulation more than once to challenge themselves to get the best results–building pride and confidence in making these managerial decisions.
Many students have work experiences in retail or hospitality and easily relate to this simulation. For example, this product does not perish as food items, so the cost of having too much inventory is a bigger challenge for them. Others find the simulation helps to refresh their skills or builds on past experiences to further learn some key skills employers need. Be sure to include these simulations in your lessons!