December 22, 2019: MacManager

My second significant simulation experience was the product of a relatively simple simulation written for the early Macs. It came on a disk, the small plastic inserts. Up to seven teams -- at least one human and up to six human or computer players -- made decisions each period. Here is a video demonstration (https://youtu.be/DkLx8kJO2DI). For a hypothetical, featureless product, a team would decide the price, how many to produce and how much to invest in capacity each period. Under more advanced conditions, there were additional decisions as to how much to spend on marketing and on research and development. Once all the human decisions had been filed, the simulation compiled results. The game lasted from 8 to 32 pre-determined quarters.

I used the game in class even though it was a bit clunky, not multiple-team user friendly. I only had one copy of the game and it would have been better to have a copy of the game for each team in the class and have the team play against eight computer-generated competitors. Instead, I had to have one team come in, review the current conditions, make five devisions, input them, then leave the room as the next team came in for their turn. Once all the teams had finished their decisions for the quarter, I'd compile the results with the push of one button and the ten seconds or so it took the Mac to spit out the results. Then repeat for the requisite number of quarters.

I learned the mechanics of the game from playing it repeatedly, as one human team against seven computer opponents. As I can best recall the computer had teams use various strategies -- low cost or high cost, high price or low cost, small volume or high volume production, limited or large marketing budgets. What I learned after many, many completed games was that adopting a very high price, low volume, high marketing strategy could be very profitable and allow me to invest in a huge factory so that I could cut my price my 90%, produce and sell more than the rest of the competitors combined, and bankrupt them pretty quickly.

This strategy might not be viable or legal in the 'real world,' and the success was determined by the parameters in the computer code, but it did teach me very important lessons about pricing, margins, and investment in the long term, and the need to accept some short-term tension to create a long-term juggernaut.