Simulation is an effective technique to test software where testing in the real environment is not feasible. A 3D graphical simulator can make the software testing process much more effective and efficient. With graphical representation, the softwares behavior can be observed in a virtual environment similar to the real environment. This kind of simulator can be best used in testing embedded system software, specifically in systems with many moving objects. Typically, however, the creation of a simulator is expensive in terms of time and cost. In addition, it is difficult to verify the accuracy of the system. We propose an inexpensive 3D graphical simulation method for software testing of embedded systems. This system eliminates the need for mathematical modeling by modeling the physical objects with simple rules. These objects self-coordinate their operation through the application of these rules. The 3D graphical simulator integrates the entire modeling process, eliminating the need for separate simulation and graphical display units. The simulator provides instant graphical feedback of system behavior to illustrate the feasibility and reliability of the system. This technique of testing software on 3D graphical simulation has been used in Agile Manufacturing project at Case Western Reserve University. With relatively small cost, the simulator assisted in the development of the final workcell control software. The system was assisted in finding software errors, saving considerable expense in both time and cost. We will discuss the benefits and uniqueness of our simulation method and how the simulator is constructed, followed by a case study of agile manufacturing software testing. Through the case study, we will show the effectiveness of 3D graphical simulation in discovering software errors in comparison with other methods.