This manual is designed to help classroom teachers, instructional designers and test developers, construct sound, challenging and sophisticated paper and pencil exercises that simulate the data-gathering and decision process involved in diagnosing and resolving a problem. It is based on the authors' extensive experience in conducting training workshops in simulation methodology. Part One discusses the basic concepts and uses of written simulation. Part Two presents a detailed step-by-step procedure for creating simulations. Via diagrams and charts, the authors progress from designing the blueprint for a simulation through the final step, which is the debugging process. Part Three describes the scoring system and the inferences which can be drawn from scores. Part Four presents and explains structural models for use in designing more advanced simulations of problems characteristic of many fields. Throughout the text, concepts, principles, and recommended procedures are illustrated with sample exercises. The methodology of written simulation as described in this book has been found useful both in teaching and in testing problem-solving skills. It is widely applicable to an almost unlimited variety of content areas, educational levels, training settings, and testing situations. (Author/CTM)