User Manual. ibizsim BM 6 Doing Phase. International Business Simulations. ibizsim: International Business Simulations

Transcription

1 International Business Simulations User Manual ibizsim BM 6 Doing Phase 2013 by Prof. Dr. Ashok N. Ullal, Hoelderlinstrasse 13, Kusterdingen, Germany Page 1

2 Changes and Additions in the Doing Phase After finishing the first fiscal year (Phase 1 = learning phase), another year has just gone by. You were away from your company in this second year. Many things have happened during this second year. This paper is a summary of the changes and additions that have taken place. You are again taking over the management of your company at the end of the fourth quarter of the second year. The new initial status (Period 0) does not use any of the data from your company at the end of the first year and is exactly the same for all the companies. Your first round of decisions is for the first quarter of the third year (Period 1) by Prof. Dr. Ashok N. Ullal, Hoelderlinstrasse 13, Kusterdingen, Germany Page 2

3 1. Products 1.1. Alesa Alesa had entered the degeneration phase in Germany and the U.S.A. and with a small delay in China and India last year. Demand in volume terms has dropped by about 50% in Germany and U.S.A and about 30% in China and India (period 0 of the third year relative to period 0 of the first year). Your company has now decided to re-launch the product to slowdown the degeneration. However the personal preferences are slowly disappearing. It is expected that the demand is going to be increasingly sensitive to changes in price Bordo Bordo is still in the expansion phase in Germany and the U.S.A. China and India have also shown substantial interest. Your company has been able to build up a substantial base of loyal customers in all markets. However the growth in the demand is sluggish this year as compared to the last year. It has been possible to build up personal preferences for this product in all markets Carti The development of a new and innovative product, Carti, was completed in the second year. In the past periods your company has already initiated a marketing campaign in the four markets. Substantial interest in the product has been registered. Your company has already prepared the infrastructure to market Carti. There is no substitution between the products Alesa, Bordo and Carti. Carti was already introduced in period 0 of the third year in all the markets and an initial demand has been fulfilled by Prof. Dr. Ashok N. Ullal, Hoelderlinstrasse 13, Kusterdingen, Germany Page 3

4 The market research department of your company has tried to estimate the size of the market for Carti. The report suggests that the sales of Carti could reach a level of about 40% to 60% of the current sales of Alesa. The sales would depend on the price level and the marketing instruments employed. The raw material requirements for manufacturing Carti are documented in the List of Parameters. 2. Vacations Your management and the labor union have negotiated a three-week (= 15 working days) vacation in the production function. This vacation would be in period 3. Please note that only production would be closed for vacations and all the other departments would continue working normally. Please also note that the deliverable part of produced goods in this period is reduced substantially because of the vacations. 3. Initial value of stocks For raw materials in the stores at the beginning of period 0: Aurit Bekat Calot Dimut EUR per unit EUR per unit EUR per unit EUR per unit 2013 by Prof. Dr. Ashok N. Ullal, Hoelderlinstrasse 13, Kusterdingen, Germany Page 4

5 For finished goods in the central and branch stores at the beginning of period 0: Alesa Bordo Carti EUR per unit EUR per unit EUR per unit 4. Cost of stores for raw materials Your company conducted an analysis of the stores for raw materials. The analysis showed that the storage space required for each raw material on a unit basis was about the same and that a total of 200,000 units could be stored in the current stores for raw materials. If however your company has total stocks on hand at the end of any period that exceeds this figure, you are now required to rent storage space. The additional capacity and the costs incurred in using additional stores are documented in the List of Parameters. These costs are automatically incurred at the end of the period and are based on the total stocks on hand at the end of the period. 5. Purchasing The suppliers of raw materials and bought-in goods have changed their terms of contract. They are now quoting a standard price for a standard quantity. If your company were to order less than this standard quantity, you are required to pay a surcharge. On the other hand, if your order exceeds certain levels, you will be granted rebates. Please note that normal and urgent raw material orders are considered separate orders by Prof. Dr. Ashok N. Ullal, Hoelderlinstrasse 13, Kusterdingen, Germany Page 5

6 6. Customers The customers are no longer willing to wait for delivery of orders. If your company is unable to fulfill orders, half your customers are going to cancel their orders. 7. Markets The past year has been a terrible year all around the world. The financial crisis in the USA has affected the other countries in various ways Germany Germany has recently lost its place as the largest exporter in the world to China; nevertheless it has begun to exert its strong economic status to pull together the nations in the EU posing a risk to the Euro. While Germany's competitive advantage in many sectors is increasingly under threat, its fiscal condition and leadership role in the EU suggest a modest growth in the upcoming quarter. The economy is reacting to these faint signals of an economic recovery with a surprising nonchalance U.S.A. The U.S.A. has witnessed bright developments with the rating agencies positively revising their outlook even while the AAA status has not been reinstated. A contraction in two successive quarters would be recession but that is yet not on the horizon. A resurgence in demand for commodities and in markets like China could help but the domestic economy seems to be faced with uneventful prospects. Most of the economic indicators are pointing towards inflation, the economic mood is nevertheless ambiguous by Prof. Dr. Ashok N. Ullal, Hoelderlinstrasse 13, Kusterdingen, Germany Page 6

7 7.3. China With substantial state-led investments over time, China has come to lead the world economic growth. Huge demand from the infrastructure segment and the newly acquired status as the world's largest exporter combine to drive China's growth. Companies from across the world believe China to be the preferred destination for setting up their facilities. There is also a widespread pressure to revalue the currency and the leading economists are forecasting very different scenarios for the economy, if and when China does revalue its currency India India is the exciting market everyone looks forward to. The largest democracy in the world benefits from the rule of law and yet faces dissenting opinions on policies which at times act as speed breakers. The liberalization promised by the state attracts investors from around the globe. With a growing young population, companies facing low growth elsewhere in the world cannot afford to ignore India. The domestic consumption itself propels growth and to that extent makes the economy less dependent on export markets. The weakness in infrastructure and high fiscal deficit are keeping India behind China in terms of growth. 8. Other changes All the other changes and additions are documented in the new Management Report, Market Research Reports and List of Parameters by Prof. Dr. Ashok N. Ullal, Hoelderlinstrasse 13, Kusterdingen, Germany Page 7