Simulations Can Shape Strategies

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Fazekas, Bianca
Operations Research, Systems Engineering and Industrial Engineering
project description
Simulations technologies are an array of computer and software tools for creating and interacting with artificial representations of reality. These tools have always been used, but advances in computer technology have enabled simulations that are highly detailed, increasingly realistic, and more affordable. The purpose of this paper is to show that simulations, which accurately capture the dynamics of the business reality, could enable companies find the best strategies (strategy formulation) and implement the one that has the highest return. “By linking business drivers that create shareholder value to specific operating decisions, we form the quantitative basis for a customized business simulation tool”. Also, the purpose of the simulation is to improve business line of sight from the CEO, through senior management, down to mid-level managers and to people in their units (Ravin Jesuthasan). Therefore, what simulations do best is provide a framework of rules that shape individual behavior. Once such a behavior is developed, we can be sure that the strategy is the result of everyone’s work, is the best out of all potential strategies, and the entire company knows which its strategy is.