The Trading Game: Business Simulation Teaching Activity

The Trading Game is an editable PowerPoint-based activity designed to get students thinking about and experiencing a wide range of entrepreneurial skills and activities.

PLEASE NOTE - THIS ACTIVITY IS DESIGNED TO WORK WITH MICROSOFT POWERPOINT IN A WINDOWS ENVIRONMENT. IT IS UNLIKELY TO WORK AS INTENDED USING MAC O/S

The Trading Game introduces students to a variety of entrepreneurial concepts:

• Taking risks and assessing the potential rewards
• Making choices because the team's resource (finance) is limited
• Communicating the reasons for those choices
• Buying and selling in order to make a profit
• Choosing where to sell products (distribution channels)
• Setting a realistic selling price based on the chosen distribution strategy
• Gross profit (the profit made on individual products sold)
• Net profit (the overall profit made after all costs have been taken into account)

How The Trading Game Simulation Works

The approach taken by The Trading Game is to require that students purchase stock from a local wholesaler (CheapCo) to sell at one of three possible trading sites.

Students are provided with a limited budget and they must decide:

• Which products they wish to buy from CheapCo? (a selection of 30 deals is offered)
• Where they are going to sell their stock?
• What price each individual item should be sold for

Based on this information students can then estimate their gross and net profit assuming they sell all their stock.

How well each group does is then determined by their choice of product, location and selling price.

Actual sales and profits are calculated automatically in The Trading Game.

Whilst the trading concept in The Trading Game is very simple, the activity format provides plenty of opportunity for students to adopt different approaches and for learning to take place!

For example, what happens if teams purchase stock that they struggle to sell? Perhaps the selling price might have been set too high or the product was unlikely to sell well in the chosen location.

The Trading Game addresses the issue of unsold stock by having a local "trader" buy the surplus/unsold goods for a knock-down price. There is a cost associated with buying the wrong products and selling at the wrong price!

Which team will come out on top? What choices did they make to maximise their profit? Which team made a loss and why?