The Business of Simulations

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The Business of Simulations
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BIZSim Business Simulation

• This simulation is used in management
  development workshops and seminars as well as in
  academic classes. It is a product of Jerald Smith
  and Peggy Golden who have 8 business simulations
  published and used in the U.S. and in 11 foreign
  countries.

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Overview of a Simulation

• Teams make a set of business decisions for a
  simulated (3 month) period and these are
  evaluated against decisions made by competitors
  who are other class members.
• Decisions are entered into a program on a
  personal computer.
• The program acts as the purchaser of the product,
  compares the relative "merit" of the decisions
  made by all teams, and computes the sales for
  each firm.

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• The program then prints a quarterly report for
  each team and this is distributed to the
  participants
• The teams analyze their results and prepare
  another set of decisions.
• This is continued until the number of quarters
  planned by the administrator are achieved.
• Upon the completion of play, teams usually give a
  short report of their strategy and the
  administratordebriefs the teams.

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OBJECTIVES

• Team Building
• Communications
• Cross Functional Understanding
• Sales Planning
• Budgeting
• Business Strategy
• Controlling and Evaluation of Operations

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The Company You Will Be Managing

• The industry your firm is in is the highly
  competitive and quickly changing personal audio
  player industry.
• Your firm has been manufacturing and selling
  Digital Video Disk (DVD) portable players.
• The industry is composed of a few large brand
  name manufacturers and as well as smaller firms
  such as your own.

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Your Market

• Your firm does not sell its product directly
  to the consumer but rather to wholesalers,
  distributors, and all types of electronic stores
  and electronic product departments of
  multi-product stores.

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Teams are ranked by

• Total profits
• Profit trends
• Return on sales
• Stock price
• Dividends
• Corporate citizenship

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Decisions That Are Made

• Production Decisions
• Units to be produced the next quarter
• Addition to Size of Production Plant
• Quality Management Budget

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Decisions (Continued)

• Marketing Decisions
• Wholesale Price of the product
• (27-29, 33-35, 39-41)
• Advertising and Sales Promotion
• Number of sales people added this quarter
• Product Development Budget

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Decisions (continued)

• Financial Decisions
• Dividends
• Loan Addition or Payment
• In addition, for each decision period there is a
  (mini) case on which a decision must be made.

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• A Business simulation is in a category of a
  unique style of education and human resource
  development. The style of experiential learning,
  a hands-on style of Learning by Doing.
• The authors wish you well as you embark on your
  management adventure with
• BIZ Sim