Modeling Attributes in Demand Functions of Computerized Business Simulations: An Extension of Teach’s Gravity Flow Algorithm

Abstract

"The modeling of demand in the marketplace is a critical aspect of any computerized business simulation. Business simulations in particular are supposed to give students insights into the functioning of the “real world.” As a result, it is important for the programs to be designed to capture the essential elements and characteristics of the business world. Teach (1984) found most business simulations made very simple assumptions about the marketplace and the way product attributes were modeled. Most simulations assumed homogeneous products and homogeneous consumer preferences. Marketing variables controlled the allocation of demand including: price, advertising, R & D, sales force, compensation, and channels of distribution. Teach found a few simulations incorporated product attributes directly but only one ideal product was assumed to exist in each market segment; and the market segments were independent of each other. "