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Build a Building - Whole Class Business Simulation

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This whole class activity works well with small (20) and large classes (80). With large classes it is delightfully well organized chaos. Time needed: an hour and a half or more

Divide the students into groups. Each group is a company. There are five types of companies: Construction, Real Estate, Labor, Materials, Equipment. For large classes construction companies have 4 students to a group. All other companies have two to a group. For small classes the ratio is 2:1. There will be multiple groups of each company type.

Take a few minutes before class to do the math and ensure that there will be enough of each group type to supply each resource that the construction company needs. Alternately you can limit the amount of one or more resource to increase competition which could lead to a follow up discussion of supply and demand.

I found it necessary to explain how to calculate profit/loss as many students did not realize that they had to figure in monthly expenses to their selling prices.


The companies:

Construction Company:

You have $1,000,000. You must build a building in 4 weeks starting tomorrow

To build a building you need:
 1 parcel of land
 10,000 pounds of raw materials
 10 construction vehicles for 2 weeks
 1000 man-hours of labor

Real Estate Company:

Try to earn a profit by selling land to the construction companies. Each parcel of land costs you $100,000. Sell for a higher price. You have monthly expenses of $100,000.

Calculate your profit like this:

total sales
- cost of land
- monthly expenses
= profit

Equipment Company:

Earn money by renting construction vehicles to the construction companies.
You have 20 vehicles. A vehicle can only be rented by one company at a time.

For example: for the first 2 weeks you rent 10 vehicles to company X and 10 vehicles to company Y. You have no vehicles left to rent to company Z during this time, but you can rent to them for the second two weeks.

You have monthly expenses of $355,000.

Calculate your profit like this:

total money from rentals
- monthly expenses
= profit

Materials Company:

Earn money by selling raw materials to the construction companies.
Each pound of raw materials costs you $10. Sell for a higher price.

You have monthly expenses of $40,000

Calculate your profit like this:

total sales
- cost of raw materials
- monthly expenses
= profit

Labor Company:

Earn a profit by contracting out laborers to the construction companies.
You have 20 laborers in your company.
Each laborer can only work 8 hours per day. Each laborer must be paid a wage of $20 per hour of work.
Charge the construction companies a higher rate.
You have monthly expenses of $25,000.

Calculate your profit like this:

Total money received
- workers wages
- monthly expenses
= profit

Ian Ostrom
China

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