Contracting Game

Inventory management simulation for operations management teaching

The Contracting Games

The Contracting Games, are a suite of hands-on inventory management simulations that can be used for business school classes at the undergraduate, graduate or executive level. The player assumes the role of a supplier who deals with a retailer. The retailer manages inventory for a perishable product. In a single-player version of the game, the retailer is programmed to place Newsvendor-optimal orders. In the interactive version of the game, the role of the retailer is played by another student. This simulation is designed to demonstrate the “double marginalization” problem: the Wholesale Price contract cannot be designed to induce the retailer to order enough inventory. The Buyback Contract can be constructed to solve the double marginalization problem through risk sharing, by providing the retailer with a rebate for unsold inventory.

Students learn to design good wholesale price contracts fairly quickly. They generally fail to find efficient Buyback contracts because they fail to share enough risk, setting the rebate too low.

Our Contracting Game Simulation

The admin console for the contracting games is simple to use and allows the instructor to control all aspects of the game flow. Ranking reports show participants how their performance compares to others. Graphic displays of average prices and ordering quantities facilitate class discussion about operations management techniques that can improve the contract efficiency.

Our Contracting Games run out-of-the-box with tested preset parameters, while allowing the instructor to customize simulation settings by changing production costs, retail prices, demand distributions, and the number of rounds played. The single-player version of the contracting games make them ideal for on-line courses or for being assigned for homework. The interactive version of the games can be quickly played in the classroom and provide a starting point for the discussion of issues such as fairness.

Contracting Game Features


Changable experiment parameters for flexible teaching

Group Interaction

Round based group interaction with order dependencies

Corporate Identity

Customized landing page matching the corporate identity of your institution


Live monitoring and interference possibilities for all business simulations

Class & Online

No software installation required in the classroom or for homework

Mobile Devices

Use any mobile device to run the business simulations in a browser

Inventory Management

Precise inventory management and punishment for backorder


Precise insights on participant decisions and debriefing tools

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Learn more about the SoPHIE Labs Contracting Game Simulation. To discuss your projects, technical queries, class schedule or any other questions related to our products and services please send us an email! Give us an idea of your requirements and we will be happy to address your needs.