The experimental design used to address the research
questions includes three experimental factors.
They are three levels of inventory policy, five levels
of management accounting system, and three levels
of sales volume per replication. The experimental
design is a 3 × 5 x 3 general factorial design and 35
replications. This is accomplished by fixing a unit
sales level for one complete data generation cycle
of 36 iterations, which provides one year of data for
each of the three inventory policies. Inventory policy
is fixed for one 12-month cycle, completing one year
of profit-and-loss data for one inventory policy. This
is repeated for all inventory policies prior to the next
replication, requiring a change of sales volume data.
The five management accounting systems use the
resulting data to determine net profit levels. The preceding
process is followed for 35 replications under
each of three sales volume volatility scenarios. Sales
volume data are randomly changed within a range
following a normal distribution based on a forecast
value for each of the 30 parts to be produced prior
to each replicated run.