Why simulation at a business school?

While simulation is important in many subjects at engineering schools, its role within the business school curriculum has not been sufficiently appreciated. With the development of aGPSS, done at a business school, and with decades of experience from teaching simulation at several business schools, to over 10,000 students, we can conclude that simulation can play a significant role in a business school curriculum.

The main reason is that it can replace many analytical/optimization parts of Operations Research or Management Science methods, for example queuing theory, inventory theory, project planning methods (like PERT/CPM), and decision theory. It has proved advantageous to cover many problem areas with one single easy-to-use method instead of many complex methods. This has allowed us to focus more on modeling the studied problems and allowed more time for project work out in companies.

Simulation furthermore plays a significant role in the teaching of production management, forecasting and decision theory. Simulation involving production has allowed our business students to get a better understanding of the physical processes in firm and to see the connection between the physical activities and the financial flows. Simulation based costing, as a special version of ABC (activity based costing), has furthermore been used in the teaching of cost accounting.