Virtual Laboratory for Simulation and Gaming

A Virtual Lab Project Presented by

Prof. B. Mahanty
Department of Industrial Engineering and Management, IIT Kharagpur

Objectives
To develop simulation-based experiments on various aspects of industrial engineering and management. To demonstrate discrete-event and continuous simulation of real-life systems otherwise not accessible to students.

Broad Areas
supply chain management, e-business, and decision sciences.

Target Student Group

Senior UG & PG Students of Industrial Engg. Students of MBA

Nature of the Experiments

Web based virtual business and industrial environment Concepts of gaming employed to offer interactive sessions Every participant making decisions for the virtual business environment Outcomes of the decisions obtained by continuous and/or discrete-event simulation Graphics and animation outputs fed back to the participants for making further decisions Online quiz for self evaluation

List of experiments
1) Dynamics of quality fluctuations of an electronic product in a buyers market 2) Simulation of auction markets 3) An illustration of Monte-Carlo Simulation in project investments -----------------------------------------------------------------------4) Decision-making in Production-Distribution Systems using simulation 5) Simulation of organizational procurement 6) Modelling inventory decisions through simulation
Sept 2010 review

March 2011 review

List of experiments (continued)

7) Supply chain coordination through contracts 8) Demonstration of bullwhip effect in multiechelon supply chain
Dec 9) A simulation model to illustrate limits to growth 2011 review system archetype

10) Modelling supply chain risks using simulation.

Answer to reviewers comment set 1

Efforts will be made to generate publishable information from the virtual laboratory. The design of the website will utilize the power of the visuals. Efforts will be made to provide remote controllability. The project has no relation with internet gaming. All the fields mentioned are within the broad areas of Industrial Engg. and Management and all the experiments are simulation-based. No real-life data from plants are required.

Answer to reviewers comment set 2

Proprietary software DELMIA QUEST for simulation is avoided. It has been found the SIMULA software provides a facility for stand-alone applications. Hence, SIMULA will be used instead. The simulation experiments are useful for UG/PG students of Industrial Engineering and also for MBA students. Auction markets and Buyer behavior are part of supply chain management which is an important component of Industrial Engineering.

Answer to reviewers comment set 3

It is indeed agreed that the title of the experiment should not include the phrase "Game" or "Games". Gaming means that simulation experiments will provide the students facilities to interact in a manner that their decisions will influence the outcome of the experiments in a direct manner. Use of special software is limited only to the extent that they provide stand-alone applications so that no special simulation software need be procured by engineering colleges.

Project Status
Recruitment of Project Personnel Only one person is recruited on 89 days basis from 11th November 2010 Appointment was given to one person for one year however, the candidate did not join. Hardware/Software purchase status Money has been released only recently. Quotations are being asked for the hardware/software. Work done so far Framework for few experiments have been developed by the students in the class project mode.

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Projects for first phase review

1) Dynamics of quality fluctuations of an electronic product in a buyers market 2) Simulation of auction markets 3) An illustration of Monte-Carlo Simulation in project investments

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Other projects currently under development

Decision-making in Production-Distribution Systems using simulation Modelling inventory decisions through simulation Supply chain coordination through contracts Dynamic pricing strategies in electronic markets Modelling supply chain risks using simulation.

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Objective of the Experiments

To demonstrate the concepts related to simulation To introduce some real life systems otherwise not accessible to students.

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Outline of the experiments

Introduction to the real life situation under consideration Definition of learning objectives Simulation flow chart/Logic in structured English Instruction for conducting the experiment Experiment Analysis of the results Quiz to test the understanding of the student about the system under consideration Reference to further studies

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Simulation of Auction Markets

Auction is a market mechanism for discovering price under specific demand and supply conditions.
Traditional examples: Selling of Scraps/Obsoletes, Arts, Properties More recent examples: Selling of radio spectrum, Buying and selling over the Internet, Allocation of ISP bandwidth, Organizational procurement through reverse auctions

Classification of auction
Resources (single/multiple items) Market structure (single buyer-multiple seller or viceversa) Bidding rule (ascending/descending/sealed bid price) Payment rule (first price/second price)

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The auction environment created for the experiment

Forward auction Auction for selling an item Single object Auction to sell a single object First price Highest bidder gets the item with the price he bids Ascending bid and Competitive Price increases with each new bid coming in at least with some minimum increment.

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Learning Objectives
From problem perspective, to study The effect of changes in size of the bidder pool
x The theory says that more the number - the higher the price.

The effect of reserve price -the minimum price at which the item will be sold (from sellers perspective)
x The theory says that higher the reserve price higher item price up to certain level after which it suddenly becomes zero. The problem is to choose the right reserve price

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Learning Objectives
Effect of auction duration
x Duration does not affect the final price x Sharp increase in bid price towards the end x Large number of bids arrive at the end

Effect of minimum bid increment The winners curse (from buyer perspective)
x The act of buying the item in a price which is much more than its true price. This happens due to the competition.

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Learning Objectives
From simulation perspective, to study
The use of a simulation clock Use of theoretical distribution for input data generation

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Simulation Flowchart

Simulation Clock

Use of theoretical distributions for input data

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Dynamics of quality fluctuations of an electronic product in a buyers market

This simulation experiment is developed as a learning tool with the help of a System Dynamics based Game. Explanatory power of system demonstrated in this game dynamics is

Management scientists stress on the development of learning laboratories and computer-based case studies Building of learning organizations is a key to corporate success.

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Quality dynamics
The system dynamics model considers: inventory of products customer order backlog production and hiring decisions training of newly hired personnel quality of products on which depend the customer orders, and customer complaints for a company producing electronic products, where the quality of the product fluctuates due to a step change in the customer order function.

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Basic Data
Objective: To inculcate systems thinking by creating a computer-based microworld where decisions and policies can be experimented and evaluated.

Target Audience: Engineeting students, Management Students. Managers. Playing Time: Debriefing Time: One to two hours. One hour.

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Basic Data
Number of Players: One team comprising of two players: a production manager and a personnel manager. A number of teams can play at one time. Materials Required: Briefing Package compiled by the game director. Equipment/Setup: A personal computer and the QGAME software for each team. Layout: The teams should sit at some distance from one another.

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The System Dynamics Model

Exp People Trainees Eff People Hiring Rate Training Time Quality Obs Time Max Quality Work per person Actual Quality Obs Quality Complnts Quality Ratio Order Backlog Prodn Pipeline Inventory Obs Complnts Complnt Obs Time Training Compl Rate Quitting Rate Av Life

Order Booking Rate Prodn Order Rate Prodn Rate Sales Rate

Order Filling Rate

Production Delay

Order Filling Delay

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Quality Dynamics
Each team makes the production ordering decision, and the people hiring decision. A team continues with a set of decisions throughout a given plan-period of 3 months. The dynamic nature of quality fluctuations stems from:
 delays in production processes  training and hiring of people  non-linear relations among work rate, quality and customer orders, and  multiple feedback loops in the system

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Decision Variables
A participating team makes two decisions for a plan-period of three months from the second plan-period onwards: (a) Quarterly Production Ordering Decision and (b) Quarterly Personnel Hiring Decision. The first plan results are provided to the participants as initial feedback material.

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Measuring Performance
At the end of the game, a team should achieve a high average value of the game. To achieve a high average value of the game, the team should make appropriate decisions to do the following throughout the simulation: maintain good quality of the product (about 1.0 or higher) maintain reasonably less inventory and order backlog (less than 4000 units) have adequate number of people (about 150).