The Ordering Challenge  (If your instructor has not already given you the assignment, download it from here)

This simulation lets you manage the inventory of three items, A,  B, and C.  The items have different demand and cost characteristics.  You can work with any combination of the products at a time by selecting or not selecting their check boxes.  Once you click on "Run", the simulation starts. 

During the simulation, for each active product you will see a stack of little gray boxes that represents the number of items on hand. (The number of boxes is given in blue to the left of the boxes.)  As demand occurs, boxes will be removed from inventory.  If you run out of items, the boxes turn red signifying backlogged demand.  The assumption is that when you run out of stock, you do not lose the customers, but you keep track of their requests and fill them as soon as you have stock again.  The on-hand inventory level is graphed to the left of the boxes.  Your role is to watch the inventory level drop and decide when to order more. When you click on the "Order" button, a request is placed for replenishment.  Three days later you will receive the quantity that is specified in the quantity box, just to the right of the Order button.  You can change the order quantity by clicking on it and selecting from the drop down menu.  You can also place an order by pressing the letter of the item on the keyboard, a, b, or c. 

There are three costs associated with the system, for each product.  Each day a "holding cost" is incurred proportional to the number of units in inventory.  That is, if you have more inventory, your holding cost will be higher that day; with less inventory, your holding cost will be lower.  The holding cost is also proportional to the value of the item.  Similarly, backlog cost is proportional to the number of units below zero and the value of the item. It is incurred at 4 times the rate of holding cost.  The third cost is order cost. Each time you place an order, the cost shown for the product is added to your total cost for the product.

The cost gauges show cost per day and suggest what are poor (red), mediocre (yellow), and good (green) levels of cost.  Note that because of the way order cost is incurred (the entire amount when the order is placed) the bar will jump up each time you order and then work slowly decrease until the next order.  

The simulation runs for 365 days.  You can reset (start over) at the end of 365 days or any time during the simulation.  You can pause the simulation by pressing the Pause button and pressing Run to continue.  Also, pressing the space bar pauses and resumes the simulation.