Salt Seller: Commodity Pricing

by John Sterman, MIT Sloan School of Management, and Forio

$150 / seat
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Simulation Overview

Understanding cost structure and competitive dynamics in a basic commodity market is a crucial prerequisite for analyzing more complex markets. This simulation gives students the opportunity to set prices for a commodity in an imperfectly competitive market. The simulation is based on the MIT Sloan case study Ventures in Salt: Compass Minerals International.

The Story

Students play the role of CEO of a salt producer selling salt to towns and municipalities for de-icing roads. Students choose selling prices, and need to balance how their competitors and customers will respond to their pricing decisions. The simulation lets students experiment with different profit-maximizing strategies, experiencing interactively the challenges of pricing in a commodity market with variable demand.

Learning Focus

  • Experience the challenges of pricing in a commodity market with variable demand
  • Understand the dynamics of pricing
Topics Covered

  • Commodity Markets
  • Variable Demand
  • Dynamics of Pricing
Additional Information
Duration

1 to 3 hours including introduction and debrief

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