This model illustrates how strategic planning applications can be developed in GoldSim. This project, while not intended to be realistic, is designed to illustrate a situation in which a planner or project manager must choose among multiple alternative strategies while taking into account the large uncertainties that exist. The example project involves the manufacture of a new product, such as a new type of paint.
The project involves the development of a conceptual design for the production facility, construction and testing of a pilot plant, final design and construction of a full scale manufacturing facility, and, finally, the operation of this facility. In this scenario, the corporate Research and Development (R&D) department has developed a concept for a new manufacturing process for an industrial paint. The new process, if successful, would result in a high-quality product which could be produced at a significantly lower cost than that of the existing process used by the company and its competitors, resulting in an increased profit. However, large uncertainties exist as to the feasibility of the method, the ultimate production cost, and the time required to begin production. Alternative strategies are included to compare the performance of:
- building the pilot plant,
- skipping the pilot plant and immediately beginning work on the production plant, or
- doing nothing.