An In-Class Competition Introducing Inventory Management Concepts

Encouraging interest in inventory management necessitates that instructors overcome concerns that the subject is too abstract or conceptual. To aid in this process, we describe a competition engaging students in concepts, including demand estimation, demand uncertainty, and costs of inventory and shortages. The competition simulates a multi-item newsvendor problem employing participant-generated data. We present results from use of the exercise in multiple class settings over the past decade. A number of possible extensions of the basic competition are discussed. Data collection and analysis materials are available to interested readers.