The structured development of simulation-based learning tools as an alternative to physical experiments in undergraduate engineering courses is described. A methodology for the design ofsimulation-based learning tools is proposed. This methodology combines the key elements of a standard systems development approach with an iterative development framework which highlights the importance of incorporating both pedagogic and communicational objectives throughout the design process. A simulation for use in learning the Taguchi method is developed using this methodology. Details of the evaluation of the tool and the resulting modifications and reassessment are provided.