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i- Business Game Business simulation

1. M 43 C MANUFACTURING REPORT caes 45 ly Reporton manutacturino decisions 45 Za NlanurdcturiBe FeDOECS monii id esae O 46 9i INPanutacturifi9 COSS cio dide ictuid tdeo A osea Dos totus 48 Ae Nanutacburip d1ndicatobs 5 osa epe bois eat A ia ode esu ds 51 D REPORTS ON HUMAN RESOURCES id Ad 52 t Homan te nile Edo LUI ETT E EE A E 22 Zo cS OVA eee DOLI te ected E dup apache ectecetasici aca bo iU osse e E racist eset uot eater comes 53 Je tentis Eel I Hl RE 58 Zo IHu iidbresoltce5 LG ICALOL MM o II eH cu osos dag aep d 60 2 H ma tessous ALIN Prole nai 62 E REFPORESSON OUATIT ica 63 I Quality gt DECIAS as 63 PEERS ELD E NNNM P P m 65 MEE GC pORO ICM E TN 66 Ae QUAN dC ALORS fer EE 68 F PINANCIAE REPORLTES aieo iiu od cad 69 ls Report on tHnancial deelstOfis oci eade a abated cava cack OPE oer e a ias 69 25 A E EU 70 ONE A sone accel tenet E uccecatt atte sca sams 72 4 Evolution of reserves amp retained INCOME oo n o onde 74 Fs olus ba De NM II MEI LM IM ua Mie E T3 Gc es 78 Te Ducum 80 G COMMON REPORTS aAA T E R e OE EAA RA aches tousaniens 83 Iz GOrpOrate Tesulis PUDS Neesi a e a 83 Za LOCK MIKO E Fe POL oaa ri a a a a S 84 CMS Grotii Makel TEDO ton a m OE 85 Z Market compe A o O a a a exc Leu afia 87 Dir Game Ss SCORE A ODECE S ea a aa a a Aaa a a 89 6 Objectives Indicators eea ii cales 90 V OBJECTIVE
2. Bd E fino ve Fa cur Leasing le Preste papir pa marak rales Ue lal cau Dr vals la Alqraraar la Hraabes ru 1 B J Ih D D I l La I I I E I i 1 ri eran e warrible Lile Eua If 13 IA Is Ih Li IK EU no 111 U 2 imane maal LIS TKK TAKA TAS A E AIR SA E OT Ms ec eet E WIFE THIS Th HS nng Tarika A HI IE o o o NETAS IMATII rimari EIMAMNEG taney c i INAT4E 7 INANE TACA 17 rimari 3 i MATEI aili mane LIMAT I 1s i nme gt IMATE TEEL OTE 15 i IMANE i 17 1 MANEI ESTEE 1 on i amea MEAT yali IMATE 24 MANE ty i mnra EET I as i nrc te I INANE VIIMANE J ao i marca aan i marca a arca put maraca g a li mame Aalha mid S5 Alita mid E Ba dis mied S5 Slits arab E Pul rae BOL ETT ELTI lene ke nel Inel kH neli ee a nel Ier n red Ieneke pars Chiba saga 5 Cina aaa a harpes ins 5 Chus ins k Cd aie xr S Cia aie sli e Carl fes chr S Eat EI TEILS cal es her Eiai aie fimi a cal emba cl emban iail heures 5 Cal heures e EENE pee iail reana Helles a Dn 5 elles a Don e Liniigriims a5 Vireniigriiges s i Lis ratu LES tutor Ll Dine Loa rans LU Dini celui LIS IE ITE LES EELEE Lla rans LIS rut HR LU rat Loa lite LU ratu
3. World oan reporte Stock market ue Country Market Competition ij Marketing Sales inventory Marketing decisions Marketing indicators Cay Manufacturing Decisions Report Costs Indicators Z Human Resources Decisions Social report Claims Age pyramid Indicator gt Quality Decisions Report Costs Indicators T Finance Finance decisions Operating income Net result Retained income Treasury Balance sheet Financial indicators Chapitre VII DATA BASE AREA Headquarter Marketing Manufacturing Quality Human Resources R amp D Finance who E France I Headquarter igh Marketing USING THE PROGRAM publicity on distribution publicity on image publicity on product Advertising budget Available for next sales Efficient publicity Entries of finished goods Inventory at quarter end Double clickon a variable to display it Quantity served under warranty Quantity sold Sales plan Sales price A Finance Morocco Headquarter ib Marketing A Finance column A Show data Eil Zero LI Stacked Advertising Acwertising mini The database contains multiple variables classified according to their location world group country and their domain production marketing finance etc A click on domain open the list of available items A double click on the item will open the graph of evolution one Bln Be x 2 3 4 5 6 E E a
4. To clear the error correct and verify the new decision Some errors require correction of several decisions whose combination causes the error Error messages identified by their number are explained at the end of this guide and in online help Chapitre VI DECISIONS MAKING 117 13 Sending the decisions to game s control Before the end of the quarter RESPECTING THE TIME LIMIT you will need to communicate your decisions to the game control casos IGM Bw ae O If a m is displayed in the button bar you must correct the error s before sending the decisions To do this Check decisions Check again your decisions and on error correct them If you wait for approval of a banker the SEC or the ISO auditor call your animator to get his signature Send decisions Communicate your decisions with the button Send decisions Cancel decisions If you have remorse and before any treatment of the quarter have been achieved use the Cancel decisions make your changes recheck your decisions and send them again This sending of decisions indicates to the animator that you are ready When all the teams in the universe are ready he will launch the quarterly processing Meanwhile your data will be frozen and then you will switch to the next quarter 118 l Business Game User s Guide Vil USING THE PROGRAM A General information 1 Using the Business Game The L Business Game is played in communication with an Interne
5. RATIO TOTAL QUALITY COSTS VS SALES SOLUME TQC sale volume Chapter IV THE GAME S REPORTS 69 F FINANCIAL REPORTS 1 Report on financial decisions FINANCE DECISIONS France MONEY TRANSFERRED Money transfers USA 500000 Money transfers gt France Money transfers Morocco 0E FINANCIAL INVESTMENTS Financial investment STOCK MARKET Maximum stock shares Stock shares Dividend per share MONEY TRANSFERS MONEY TRANSFERRED MONEY EXPORTED from USA to France or to Morocco MONEY IMPORTED from France or Morocco to USA FINANCIAL INVESTMENTS FINANCIAL INVESTMENTS It is the TOTAL of financial investment in the quarter in local currency LONG TERM LOANS LONG TERM LOANS It is the TOTAL amount of loans in each country in local currency It is the amount of credit line used and not the credit line itself This value cannot be confused with the short term loans automatically given to cover treasury requirements 70 l Business Game STOCK MARKET SHARES AUTHORIZED It is the TOTAL authorization of shares number to be released SHARES RELEASED It is the TOTAL amount of released shares of your company DIVIDEND BY SHARE User s Guide It is the dividend allocated in the quarter to shareholders for each share defined in US 2 Operating result REPORTS 3 Finance 1 Butterfly m Operating income Operating income Value of sales Cost of goods sold Gross margin 5
6. Ky l Checkdecisions Check decisions Organization chart Organization chart Strategy Strategy A Simulation Simulation Objectives You will need to write a document in Word or PowerPoint and communicate it to the control of the game To initialize the process you can download a template document and then modify it Click the Strategy to open the pop up menu Strategy document r LE Download Word template fz Download Powerpoint template You havent uploaded any strategy document Upload a new document Upload Close Choose the model to download in Word or Powerpoint You can also prepare your document without using these templates and save it in one of the following formats e Word Doc or Docx e Powerpoint Ppt Pptx Pps Ppsx e PDF Pdf Choose a document name that will clearly identify your universe and your team for example Strategy Team Universe 1 3 IBM docx When your document is ready and definitely before the end of the quarter 12 use Upload to communicate your strategy to control the game The program will ask you to identify the location where you saved your document When the document was sent it will also be available on your team Strategy document is never available to your competitors Chapitre VII USING THE PROGRAM 155 It can not be changed after the quarter 12 READING THE STRATEGY OF YOUR TEAM Select the menu DOCUMENTS STRATEGY Download your
7. Methods 7 investment METHODS The popup window opens Export data 5 Global market USA 1690900 1971519 1782775 E dij Marketing B Actual values Bg vena J Seasoned 2404400 2051256 2456119 2112400 2130993 2082742 Manufacturing 5000000 2078200 2210730 2036092 Quality 2123900 2290466 2071187 Human Resources 4000000 2888900 2370203 2838018 iD R amp D 2361100 2449940 3 Finance 3000000 2063000 2529677 a France 2622700 2609413 22 3224600 2689150 3219917 iij Marketing o i 2768887 2706193 3 Finance 2623 1000000 2048624 2623596 Average sales price gt 2928361 2648012 Country s share in turnover s 3008097 3601815 Country s share in volume 3087834 3017918 Defects raw materials E 3167571 2917348 Global market gt 3247308 2936425 Global publicity effort A 3327045 3983714 GNP 3406781 3329644 Quarterly inflation 3486518 3211100 Seasonality 3566255 3224837 Total sales volume 3645992 4365613 Yearly inflation ha 20 Trend line 1732309 79737 x Quarter To the left of the window click the domain of the variable you want to analyze The list of available variables 1s displayed e Double click the variable subject to analyse e Choose the method o linear regression o seasonal adjustment o exponential smoothing o correlation e Enter or modify the parameters demanded by the chosen method e Change the quarters range of the analyzed series The prog
8. 5 6 9 LIABILITIES amp EQUITY LIABILITIES Tax due 31528 Short term debts 2130439 Long term debts 5000000 Retained income 1884122 Common stock 39000000 TOTAL LIABILITIES 19146089 TAX DUE 11 Tax to be paid on next quarter on positive net income of current quarter SHORT TERM DEBTS 12 Sum of credits used to cover a negative treasury balance The interest paid on next quarter will be based on this amount and the special rate for short term loans LONG TERM DEBTS 13 Total of used credit lines The interest paid next quarter will be based on this amount and will be based on next quarter prime rate 80 l Business Game User s Guide RETAINED INCOME 14 This is the cumulated value of net incomes not distributed to shareholders as dividend That is the cumulated variation of the company s net value COMMON STOCK 15 When opening the company that is the value of released shares at nominal value 20US The opening value is 450000 shares x 20 US 9000000US Further new shares release is done at market value Added to Income Retained the Common Stock value gives the value of Total Equity TOTAL LIABILITIES 16 11 12 13 14 15 r Financial indicators REPORTS 2 Finance 1 Butterfly iii Finance indicators Financial indicators Butterfly Liquidity ratio 11 41 Solvency ratio 1 39 Independence ratio 1 46 Average interest rate 9 15 Return on equity
9. B MARKETING REPORTS 1 Report on Marketing decisions Marketing decisi EH TEAM MARKETING DECISIONS PRICING Sales price ADVERTISING Advertising budget on product e on image on distribution RESEARCH and DEVELOPMENT R and D budget on product on quality e on communication DISTRIBUTION Type of distribution Wholesalers Distributors margin 20 Sales force SALES PRICE Sale price decided for each market in local currency To be present on a market you must give a sales price value and offer goods available for sale ADVERTISING Advertising budget of the quarter in each country in local currency You see that the whole publicity budget has been shared between e product promotion e company image e support to distribution RESEARCH amp DEVELOPMENT R amp D budget charged only to headquarters but influencing all markets The total R amp D budget has been allocated to e product improvement specifications cost product positioning e quality improvement intrinsic quality and process improvement e publicity communication efficiency to get a better effect of publicity while keeping a stable budget 42 l Business Game DISTRIBUTION NETWORK Distribution network type e Distributors wholesalers e Exclusive agents e Privately owned network User s Guide For the wholesalers or exclusive agents you know the of distributor margin which was given For the own
10. Manufacturing quality QUALITY IN MANUFACTURING Training expenses Compensation 0 20 Average seniority of workers years 415 Number of active Quality Circles 2 Production share under Autocontrol 30 Retouching is allowed after Autocontrol Yes TRAINING COMPENSATION of time of workers dedicated to training AVERAGE SENIORITY OF WORKERS YEARS influence by your hiring policy ACTIVE QUALITY CIRCLES Number of Quality Circles active Chapter IV THE GAME S REPORTS 65 OF PARTS SUBMITTED TO AUTO CONTROL of manufactured parts checked on the production line by the workers A detected defective part can be corrected by retouching but not with a 100 yield Retouching consumes time and you can prefer to submit goods to final checks RETOUCHING IS ACCEPTED YES or NO according to your decision to accept or to refuse retouching on defects detected during manufacturing process Quality Assurance FINAL QUALITY 55 of finished goods tested in final Q check 10 OF SALES UNDER QUALITY ASSURANCE It is the part of your sales that you realize under a Quality Assurance clause This percentage corresponds to the parts submitted to final Q check 2 Quality report QUALITY REPORT RAW MATERIALS RECEIVING INSPECTION Defects from receiving Requested quality level AQL AUTOCONTROL IH MANUFACTURING Defects from autocontrol Defects corrected retouching Scrap after autocontrol CONTROLE FINAL ET GARANTIE Sales under A D
11. Worldwide market share 7 Price quality ratio 8 Sales plan accuracy In this menu you display the values calculated by the model of the game for the criteria being the objectives of all teams and you see the corresponding graph In addition the animator of the game can provide you with additional performance indicators to help you to benchmark your activity with your competitors They can be related to your business only or be available also for your competitors They do not intervene in the list of objectives coming into play to calculate the ranking In the list these objectives are in bold characters indicators not in bold 158 l Business Game User s Guide J IN CASE OF ERROR Several types of anomalies may occur in the course of the game ERRORS IN DECISIONS They are always marked with an error message issued by the program most of these messages are immediately understandable You find the attached error list at the end of this Guide You must correct these errors to calculate simulated results and to communicate your decisions at the end of the quarter to the control of the game ERRORS USING THE PROGRAM In principle they are always marked with an error message issued by the program most of these messages are immediately understandable For additional information refer to the help available on the menu of the game The controls are such that these errors should not affect the result of the game
12. for the headquarters It is the sum of absolute values of the balance of the F treasury in each of countries corrected by the rate of Retained incomes Treasury management performance the currency increased of short term loans i divided by the benefit before tax inventory value placements treasury debts Total equity total debts Total equity long term debts resignations divided by the total number of workers the labour absentees on total of the personnel in manufacturing 19 Average tax income rate 20 Liquidity ratio Solvability ratio Independence ratio 3 AC No Tj 00 UN Chapitre V OBJECTIVES amp STRATEGY 93 Global personnel satisfaction 2 2 5 6 8 Composite index based on 19 criteria evaluating the totality of reactions of the personal against your salary policy conditions of work and the security of the employment number of persons in production Number of raised claims during of the quarter evolution to the net purchasing power of the S 26 Average salary cost in the quarter Number of personnel claims UN 29 Days Man on strike Total COQ CNQ Quality actions cost Vs sales S Number of days man lost in the quarter to go on strike non quality value of sales complaint of clients divided by quantity sold Total of scrapped quantities linked to quality defects Purchasing power of personnel S personnel since th
13. Franca Morocen Currency E d Exchange rate quarter 12 1 1D55 id 0255 se a i USA France Morocco Malertals standard costes 1 000 5 1 200 5 1 200 5 standard cost man 1508 5 40 5 6 30 5 Overhead charged do standard coet d 1 255 1 805 1 808 Total standard cost 0 00 5 0 00 5 0 00 5 Unit cast for hiring 2000 5 DE Dd Unit cast for layoM 500 5 De Dd Tax rate on profits 45 00 40 00 30 00 Tax rate an salaries 12 00 0 00 0 00 Maximum legal labour week 40 00 h 0 00 h 0 00 h Minimum legal vacations weeks 3 Extra hours limitation 20 20 20 Shipment unit cost 0 00 5 0 25 0 25 d Unit fees for Import 0 00 5 0 20 0 80 d Fixed cost for each Investment slice 100000 00 5 0 00 0 00 d Unit cost for capacity Investment 30 00 5 0 00 0 00 d 138 l Business Game User s Guide D Using the data base VES SSS A To access to the database queries click this button on reports bar Each quarter the program records a number of significant variables for the company or about the various markets All these variables may be subject to the same processing e Business graphics e Quantitative methods regression correlation seasonal adjustment e Transfers to Excel The variables of the database are attached to a LOCATION and a DOMAIN Peertech Inc Locations will be a Peertech Inc 96 publicity on distribution m USA we d sseord W USA publicity on image Hi HeadQuarter uL HeadQua
14. LU rat HB LU ratu Loa NETAS TEHERERI HH TAHA H E II Hh TEKS bil 11145 ILH KRERERI LU TAI II A ll SETH ATA TZAN iI HEM PARKIH i nw TLE Ir TAKAHI F HEHE Ir FIERA THA FIKA FAI E MERGED Ir THK Ir aia Ir FLARE THENKNT Ir HME 1 LYRE ih T2 HET EF HMHE F HHOH WIRE TaATWETIEDI T2TWEDIEDI k T a Eira pa THEME TIA EAE TAIEHEHE ih ih i 1271 HEHEF TENE Tahal ih ih THEA EE Sirs Er TL i m o PHAN 72 rA FUSE A LI I I 3 4 3 b E y lt FHBRBI n o 2 EI THK CALA Man TEE 1I AE TAIKKA VAINA o o e o gee Peer TA A 7351254 E TIAA o e oa o A ir E H AE lt HA La PEE ZSIES o o o e EIE 123 1hn5 25h pL PRAI 1511 11h MI 1 PI HEAT AIL 1 1 7 Sa etl chested ra ar SUSE mm 1 dead nus bbe Lp et T2 mns IH 4343 MH Dala eee eV TIA ERES 1 AM O FISHI A s IH raram Database Decisions Open the Excel file that was downloaded You choose the sheet corresponding to the source data extracted e Database Variables in the database HR Quality Finance Social Quality Quality Reports Operating results cash flow balance sheet e Decisions Decisions of the quarter e World Global Reports e Country Country Reports e Team Report at the Corporation level e Plant Production Report e Sales Sales and Stocks e e e Each variable is identified by its source its title its unity i
15. RATIO QUALITY PRICE This ratio is calculated by taking into account the price in the country and the level of defects in products sold The higher the ratio the more favourable it is CUSTOMERS FIDELITY Potentially this is the of repeat sales of the previous quarter You must obviously have products available Loyalty is influenced by e Price stability e The level of defects e The stability of quality price ratio 44 l Business Game User s Guide e SO certification e The stability of the distribution PERFORMANCE MARKETING MIX The model calculates the representing the company s potential to take market share in the occasional market That corresponds to the market not covered by the renewed sales Performance varies with the position of the company Vs competitors on various criteria e The selling price Advertising R amp D The quality The quality price ratio The effectiveness of the distribution ISO 9000 certification VALUE OF THE PRODUCT PERCEIVED This indicator is calculated on the basis of the current and persistent R amp D quality and company image EFFICIENCY OF DISTRIBUTION This indicator combines the effect of network type maturity and sales incentives such as margin for distributors sales force bonus COST DISTRIBUTION PER UNIT SOLD Distribution cost in local currency divided by the volume of sales EXPORT PERFORMANCE Indicator measuring the sales effectiveness in foreign markets OF
16. Size of control sample 50 H Receiving inspectio Final control Quality circles The computer model will check if the planned Quality staff is sufficient to carry out the planned quality actions Quality in manufacturing RE If your new decisions on the quality lead to a positive or negative variation of quality staff too large to be realized within one quarter you could be induced to spread them out over time Quality circles 0 ENS Autocontrol level 36 Training budget 2 a ee Trainers Customer claims processing 150 Management Sales under Quality Assurance 96 13 46 N 2a U 2 a M m o uw Management Certification was lost Audits planification 150 condi Chapitre III THE SIMULATION S RULES 35 E MANAGING HUMAN RESOURCES Reminder THIS MODULE IS OPTIONALLY USED Your Personnel strategy will follow four axis e Working time e Compensation policy e Social policy e Employment 1 Working time Respecting legal regulations which can change you will decide the WEEKLY LABOUR TIME and the number of weeks of YEARLY VACATIONS Those factors combined with absenteeism strikes overtime training hours will allow you to plan the needed manpower to cover your production 2 Compensation policy You will decide on the wages evolution either through GENERAL INCREASE or MERIT INCREASE allocated to a part of the personnel You can also insure your personnel s revenues and motivation through
17. a higher COQ can decrease the CNQ It is your choice to optimize the balance Cost of quality COQ RAW MATERIALS SCRAPPED Value of raw materials scrapped at receiving inspection Remember that the samples are submitted to a destructive test COST OF AUTO CONTROL Value of personnel hours spent to perform the Auto control tasks COST OF QUALITY CIRCLES Cost of hours spent to attend to Quality Circles COST OF QUALITY DEPARTMENT Value of personnel of the QC staff This staff realizes all the tasks related to your Quality improvement actions as animation of Quality Circles receiving inspection or final check TOTAL COQ Sum of these four items This is the value of action leading to control and to improve quality at several stages TOTAL COST OF QUALITY TQC Total cost of quality TQC CNQ COQ 68 l Business Game User s Guide 4 Quality indicators QUALITY INDICATORS L USA Customers claims USA Scrapping at all stages Total quality Cost 306327 otal non quality cost 242736 otal COO 143591 5 Quality cost vs sales 5 96 ib RATIO CLAIMS VS SALES VOLUME Quantities for which clients place a claim Vs total sales quantity TQC TOTAL QUALITY COST CNQ COQ CNQ COST OF NON QUALITY Sum of all costs corresponding to abnormal quality scraps claims after sales COQ COST OF QUALITY Sum of all costs corresponding to action aiming to improve quality training Q check R amp D focused on quality
18. button to delete the line Chapitre VII USING THE PROGRAM 151 Settings Investments cost are calculated on basis of scenario rules Yearly cost of capital E e A fixed cost by capacity increase slice 6 e A unit cost by unit of increase Investment unit cost You can vary the Discounting rate it should correspond to a 100000 normal profitability rate the inflation rate to take into account the depreciation of the money value compared to the current value when to invest Fixed cost per Investment COMPUTED ROI Number of rterations 14 NPV net present value 1013360 IRR internal rate of rentability 17 85 Payback after 16 quarters Based on a discount rate you choose the program will calculate e the net present value NPV of profit arising out of your plan NET PRESENT VALUE o the INTERNAL RATE OF RETURN IRR i e the discount rate which cancels the net present value This calculation is done iteratively It could stop after 100 iterations if there is no convergence when the project s profitability is insufficient 100 or exceeds 100 e The program will also calculate the PAYBACK period of your investment therefore the number of quarter where spending is offset by income The two buttons at the bottom right of the menu allow you e To display the graph of gross flows and the discounted flows e To display a table showing the flow of revenue and expenses me ms M me perno eo IE 23 9596 452000 32653
19. most important 90 l Business Game User s Guide 6 Objectives amp indicators L Objectifs seulement 4 Earning per share 2 Return on equity 3 Company market value 5 Profit over turnover 6 Worldwide market share 7 Price quality ratio Sales plan accuracy o c y a mn amp 0 M E e a You can select one of the objectives set for the session and see the value achieved for each team and the graph of its evolution In addition to the objectives you also have access to indicators of benchmarking that allow you to compare your performance with your competitors Chapitre V OBJECTIVES amp STRATEGY 91 V OBJECTIVES amp STRATEGY 1 Ranking criteria Earning per share Return on equity Company market value Profit ower turnower Worldwide market share Sales plan accuracy Inventory turnover Retained earnings satisfaction of personnel Quality cost vs sales Last quarter Last quarter Last quarter Last four quarters Last quarter Average since quarter 12 Average since quarter 12 V ariation since quarter 12 Last four quarters Average since quarter 12 Depending on the choice of the control of the game you will target 1 to 10 objectives In the list imposed for this session you will rank the objectives by decreasing priority shifting rows up or down In each quarter the model will calculate the value obtained on each of these objectives and results will be the bas
20. 100 000 in US This expense is taken as a miscellaneous cost charged to the current quarter and not depreciated The cost of capacity increase is 30 per additional unit This amount is taken as fixed assets and depreciated on a linear basis over 10 years 2 5 per quarter Machines refirbishing has no effect on capacity But for 1 by capacity unit you totally renew this capacity to reset the effect of machine age that induces a lower manpower productivity 129 n 130 l Business Game User s Guide Frequently Asked Questions FAQ You will find three groups of questions and answers e Howto e Questions relating to rules of the game e Problem Solving Frequently asked questions HOW TO DO To change the name of your company To change the logo of the company To recopy the decisions of the previous quarter To correct an error announced in the decisions To modify a credit limit alre ranted To correct decisions already validated To correct an error in good faith in the decisions alre transferred To transfer the decisions after the validation To post a graph for a data available on report menus To know the objectives of my competitors To prepare the text of its strategy on a text processing To transfer the data of the game towards Excel To change the language used To send a message to the controller of the game To request an appointment with the banker or the SEC To use the seaso
21. 170 000 170 000 320 000 204 000 180 000 234 000 195 000 203 000 You can cumulate up to 6 items on the graph As for all graphs you can e Select the type of graph e Display a table with values e Cumulate the items The red cross allows you to remove an item Items in the data base are available for quantitative methods and extraction to Excel 124 1 Business Game User s Guide 3 Formatting the workspace WE C oug oezes Morocco d o a Product Image Dstribution ctivity Unt manpower hours MANPOWER COSTS Vs VOLUME Decisions menu Reports amp data base Manpower hours volume MATERIALS COSTS Vs VOLUME Volume saving on materials Total saving on raw material Std cost Materials 400000 360000 320000 280000 240000 200000 160000 120000 80000 40000 0 2 3 gt 5 6 7 8 9 10 11 12 Zone Decisions Zone Reports DB Graphs zone On the left the DECISIONS area On the right of the REPORTS AND DATABASE area In the top zones e the decisions entry menus e The display of reports e The selection of variables in the database In the lower areas you see the framework where graphics are displayed as well as tables of values With a Drag amp drop on the bars that separate the three areas of top and bottom you can adjust the size of these areas The graphics are displayed by selecting the content a
22. 24 31 35 45 47 48 49 50 51 61 62 92 164 166 market 3 10 11 12 13 14 15 18 20 21 22 23 26 28 29 35 41 42 44 46 48 49 54 55 59 60 67 70 77 80 81 84 85 86 87 92 101 104 108 112 142 148 163 164 166 market share 142 market value 84 merit 52 115 merit increase 20 35 Messenger 131 multiple regressions 148 Netscape 137 network 22 NPV 149 151 objectives 90 91 153 operating income 73 organization chart 134 overhead 21 overtime 14 20 24 35 47 48 55 59 60 71 76 105 116 payback 151 PAYBACK 150 performance 157 personnel claims 36 Poisson 29 64 113 114 POISSON 112 Preparation 161 price 12 41 print 39 product positioning 13 41 production yield 14 productivity 14 49 products 12 profit sharing 20 35 pyramid of ages 14 35 quality 12 14 29 Quality Assurance 29 31 64 65 112 113 Quality Circles 31 34 64 113 quality plan 32 Quality Plan 111 quality staff 34 Quality staff 112 Quantitative methods 144 171 quarter 14 20 R amp D 11 12 31 41 ranking 156 ratio of quality price 12 raw materials 29 34 re importation 18 receiving 29 receiving inspection 64 112 reimbursement 26 108 109 repayment 109 110 reports 38 responsabilities 133 retirements 35 53 retouching 31 34 65 Return on investments 149 revolving 107 salary 35 57 sales bonus 23 sal
23. BY LACK OF PRODUCTION If the quantities produced can give work to the entire workforce NORMAL HOURS AVAILABLE These are the hours of work within the quarter given the manpower and the work week without overtime TOTAL HOURS AVAILABLE These are the hours of work possible including the maximum number of overtime hours HOURS LOST ON STRIKE These are the times corresponding to the number of strike days times the number of strikers MANUFACTURING RESOURCES WORKLOAD MACHINES WORKLOAD RATE of production capacity used during this quarter 48 l Business Game User s Guide MANPOWER WORKLOAD RATE of the available labor hours used in this quarter OF OVERTIME Overtime hours compared to normal USAGE RATES Vs MAXIMUM of workload Vs available labour hours in normal mode and overtime 3 Manufacturing costs PRODUCTION COSTS France MANUFACTURING STANDARDS Hours by unit USA 0 60 h 8 40 5 5 405 Std cost Materials 1 1 200 Std cost Manufacturing overh 1 80 PRODUCTIVITY Current machines age Productivity Unit manpower hours Morocco MANPOWER COSTS Vs VOLUME Total manpower vs vol USA Manpower vs vol Morocco Total saving on manpower Total hours saved by vol Manpower hours volume Morocco MATERIALS COSTS Vs VOLUME Total raw materials vs vol USA Raw materials vs vol Morocco Volume saving on materials Total saving on raw material Std cost Materials Materials cost vs quali
24. Country s share in turnover i 3008097 3501815 Country s share in volume 3087834 3017918 Defects raw materials 2 4 6 8 10 12 14 16 18 20 22 3167571 2917348 Global market 3 5 7 9 14 143 15 47 19 21 23 a 3247308 2936425 Global publicity effort Result 3327045 3983714 GNP 3406781 3329644 3486518 3211100 3566255 3224837 3645992 43565613 Quarterly inflation Seasonality Total sales volume Yearly inflation Trend line 1732309 79737 x Quarter Applied to a variable whose variation profile shows a seasonality profile and a possible trend the model calculates the trend line and seasonal factors to be applied cyclically on the values of this line in each quarter to obtain the best approximation of seasonal phenomenon The model is based on the following method e calculation of moving averages with a period of 4 quarters e averaging these values for the quarters separated by one year e adjustment of these averages on the end of quarters and calculating the coefficients corresponding to these seasonal averages by reducing them to a single index e seasonally adjusted time series and calculating the trend line on the seasonally adjusted series by the method of least squares You see the quarterly coefficient to be applied on the trend line to get a forecast You also know the equation of the trend line and the calculated values based on this model for future quarters You can limit the range of the quarters of the analyzed series but
25. If this error occurs when you follow the instructions note the procedure you follow and which causes the error and refer to administrators of the game SOFTWARE ERROR Although these programs have undergone numerous tests it is possible that programming errors remain To allow immediate or delayed correction please take note of circumstances that led to this error and found symptoms such as the messages or any abnormal reaction of the program Contact the animator in the game DON T FORGET TO CONSULT FAQ Chapitre VII USING THE PROGRAM 159 Frequently asked questions HOW TO DO To ch sin the name of company To mds an error cad in rs derision To modify a credit limit alre ranted To correct decisions alre validated To transfer the decisions after the validation To post a graph for a data available on report menus To know the objectives of my competitors To prepare the text of its strategy on a text processing To transfer the data of the game towards Excel To change the language used To send a message to the controller of the game To request an appointment with the banker or the SEC To use the seasonnality factors in the data base QUESTIONS RELATED TO THE RULES OF THE GAME What is our product How to know the economical conditions on the 3rd country What to do if the personnel of production is insufficient What to do if the personnel of Quality staff is insufficient Are the decision
26. If you involve the production personnel in QUALITY CIRCLES you will solve some the arising problems and you will also make them aware of their own role in quality You can decide to organize AUTOCONTROL tasks by the people themselves on production line These auto control defined in the process routings can be applied or not to the whole production quantity Defects detected at auto control can be partly recovered through retouching All those actions will lead to additional costs and workload thus you will have to plan the manpower on production line and quality staff accordingly 3 Final Quality You can submit a part of or all the finished goods quantity to Final Quality Check to work under QUALITY ASSURANCE recognized by your customer Sales under Quality Assurance 0 ISO Not requested Audits planification 150 conditions 4 ISO 9000 Certification optional You translate your Quality policy into all your decisions on raw materials quality quality in manufacturing process and final Q check They should be in coherence with your commercial objectives They should be also relevant with the time factor Overcoming a Quality crisis or ensuring a continuous product quality implies different decisions Roughly the challenge is to reach a targeted quality level to maintain it and to minimize the costs aiming to achieve it All the decisions on quality planned in a Quality Plan can lead to a ISO 9000 certification
27. SALES LOST DUE TO OVERPRICING If your selling price in the country exceeds a threshold that the client cannot accept you may lose some sales as your competitive performance you would have permitted INVENTORY TURNOVER Inventory available for sale divided by sales for the quarter A turnover of one means that you have sold everything With a turnover of 2 you had two times too many products Be aware that a turnover of 1 can hide lost of sales Chapter IV THE GAME S REPORTS 45 C MANUFACTURING REPORT 1 Report on manufacturing decisions PRODUCTION DECISIONS MILL ESS CE USA France Morocco QUARTERLY PRODUCTION Total production decided Production decided gt Morocco 430000 120000 RESOURCES Production capacity Machines purchase Production manpower MAINTENANCE Capacity refurbished QUARTERLY PRODUCTION TOTAL LAUNCHED Quarter s production decided expressed in units PRODUCTION BY COUNTRY Quantities launched for each country RESOURCES INSTALLED CAPACITY This is the total installed capacity that can be used for the production of this quarter This value cannot be reduced CAPACITY INVESTMENT It is the capacity investment decision in this quarter This additional capacity expressed in units could be used in the following quarter only PRODUCTION STAFF This 1s the direct manpower available for production of the current quarter In the game with the module PERSONNEL you must also take into acco
28. a decision value you will see an icon all on the right of the value field To disply the graph you select the variable by clicking on the graph icon The graphic appears in the lower zone You can adjust the size of the menu and the graphics area by moving the triple bar that separates them You can also choose the chart type e Bar chart e Lines e Surface chart e Pie chart Click on the red X to close the graph To view the table data corresponding to the graph select the Show data 142 I Business Game User s Guide Graphs related to reports are selected from the reports M m cm i HO COMPETITION STATUS ON MARKET QO Company1 Company2 Company3 Company4 Company5 Company 6 Wholesalers Wholesalers Wholesalers Wholesalers Wholesalers Wholesalers 576600 672200 639600 457600 448900 0 0 0 0 0 21 20 20 18 18 19 14 43 14 16 Select the item Mj 8570550S 81549005 73516505 5834400 5723475 47748755 Market share on turnover all 21 00 20 00 18 00 14 00 14 00 11 00 gt Approximate sales price all 12 755 12 755 12 755 12 755 12 755 12 755 Approximated publicity bud li 180000 180000 187000 198000 176000 173000 _ Approximated R amp D all 327000 294000 279000 300000 309000 327000 Select the type of graph ISO Status Not requested Not requested Not requested Not requested Not requested Not reque
29. budget 180000 Short term loans 657047 Research and development 300000 Shares release Sales administration cost 320043 Total tresaury entries 9275969 Distributors cost 1553299 5 Cost distribution network 03 Inventory cost 36705 5 TREASURY STATUS Miscellaneous 0 Treasury at quarter beginning 03 Capital expenditures 0 Net treasury move 03 Tax on income 138903 Dividend paid 67500 Treasury at quarter end os Money exported 03 Interest on loans 235350 Financial investments 400000 Refunding term loans 1500000 5 Refunding short term 0 Shares buy back 05 Total treasury issues 9275969 TREASURY ISSUES PRODUCTION OVERHEAD CHARGES H 1 Actual manufacturing overhead expenses RAW MATERIALS PURCHASE H 2 Expenses to buy raw material according to purchased quantity for each country and selected quality level PERSONNEL EXPENSES H 3 76 l Business Game User s Guide Personnel compensations for direct people s hours overtime hiring and layoff costs include also the cost of voluntary resignation incentives early retirement bonus and profit sharing The cost of Quality staff is also included TRANSPORTATION FEES H 4 Paid by headquarters for all shipment to foreign subsidiaries or goods shipped back IMPORT DUTIES F 5 Import duties paid in the foreign country on imported goods ADVERTISING 6 Quarter expenses for advertising RESEARCH amp DEVELOPMENT H 7 Quarter R amp D budget SALES a
30. by the quarter 12 priorities that you are going to target all along the game You will be able no longer to modify them thereafter In beginning of quarter 13 you will know priorities chosen by your 94 l Business Game User s Guide competitors The Report on the competition gives you the situation of all teams on open objectives during this session and allows you therefore to analyze your strengths and your weaknesses To fix them your choice analyze well the meaning of the X criteria of classification Adopt and hold you to a policy that corresponds to your priorities them most important This mode of classification favours therefore the continuity These that succeed by chance on some criteria that they had neglected are penalized These that focus with continuity on their main objectives are favoured Outside of your own objectives follow the result of your competitors A place taken on one of their important objective can make them lose several points By analyzing the meaning of criteria you will observe that some are criteria are related or antagonist By distributing your priorities you will be able to spread risks or on the contrary to concentrate them on related criteria You could have thus earn more or to lose better Chapitre V OBJECTIVES amp STRATEGY 95 Strategy definition By ranking objectives you have chosen priorities you will target throughout the game You will also need to communicate
31. compensation policy the working conditions or the lack of employment security The effect could appear in this report where you will know the reasons of this dissatisfaction and furthermore if you have a strike notice or a strike A STRIKE NOTICE HAS BEEN PRESENTED The personnel are not satisfied If this situation grows and if you don t meet the personnel claims a notice for strike can be presented and that could lead to a strike on next quarter NUMBER OF STRIKE DAYS In case of social conflict the personnel or a part of the whole personnel can stop working one or several days varying with the social pressure and the severity of personnel claims The size of the strike can also vary with the age of claim and or influence of Unions NUMBER OF STRIKERS Number of people joining the strike Non worked days are never paid but the lost hours cannot be balanced with overtime MAN DAYS LOST ON STRIKE Number of people joining the strike x Number of strike days PEOPLE UNIONIZED of workers affiliated to Unions These people could follow the Union recommendations in case of social conflict PERSONNEL SATISFACTION GLOBAL SATISFACTION This indicator merges the satisfaction or the dissatisfaction of personnel related to the global personnel policies in your company SATISFACTION ON SALARY This indicator shows the satisfaction or the dissatisfaction of personnel related to their purchasing power SATISFACTION ON EMPLYMENT SECURITY This
32. designed their own products around yours Therefore they will be aware of the competitiveness and of stability of your offer Your market share in each country will depend on the behaviour of two customer groups the usual customers influenced by your brand they have purchased in the last quarters but who could be disappointed by high price increase or quality problems and the ratio of price quality evolution They will also appreciate a possible ISO 9000 certification that you could decide to setup the occasional client attracted by the quality of your products the publicity and or their prices According to the decided strategy you will produce first class products or wider diffusion goods Select an adequate ratio of quality price corresponding to you product and your competitive position Be aware of the consequences of the loss of your usual customers for instance if you don t offer enough products to fulfill their demand or if your quality is poor or if you lose your ISO certification For the new Moroccan market you can receive valuable information from the Game animator Never forget that one of the major elements that will influence the market and your results is the competition You don t play against the computer but against your competitors For this reason it is essential to carefully check your competitors results to adjust your own decisions 2 Your company your products The plant of your company locat
33. different values of the plan As a condition of obtaining ISO 9000 certification is to reach a minimum threshold on this scale 3 Marketing decisions Image Distribution 36 Distribution network Distributor margin Sales force Sales bonus 56 Previous sales Available for sales Send back to factory Sales plan e SALES PRICE Sale price decided for this market in local currency To be present on a market you must give a sales price value and offer goods available for sale e SEND BACK TO FACTORY For foreign countries only it is the amount of stock that you want to return to the USA to be sold over the next quarter e ADVERTISING BUDGET Advertising budget in the quarter in each country in local currency This budget can be split between three axis in 96 o product support o company image support o distribution support this is the of the advertising budget for supporting your distribution system especially when you change it e DISTRIBUTION NETWORK Type of selected distribution network Distributors wholesalers Exclusive agents Privately owned network 102 l Business Game User s Guide DISTRIBUTION MARGIN For wholesalers and exclusive agents this is the of sales price returned to distributor SALES FORCE This is the number of salesmen in your OWN NETWORK in this country The greater the number the more their sales territory is narrow and facilitated the sale SALES BONUS For your
34. export more than the quota imposed for this quarter E008 PRODUCTION EXCEED AVAILABLE CAPACITY The planned quantity in the quarter cannot go beyond the machine capacity installed in the last quarter E009 LAYOFFS EXCEED ACCEPTABLE LIMIT Set back the manpower to the displayed limit E010 NOT ENOUGH MANPOWER TO MAKE THIS PRODUCTION The planned production total for the three markets multiplied by the work time per unit exceed the available manpower hours The calculation takes into account the training quality related tasks and the manufacturing itself E011 ERROR ON HEADCOUNT IN QUALITY DEPARTMENT This number obviously numerical must be compatible with the assigned Quality Control tasks E012 ERROR ON THE OF SUPPLIERS UNDER QUALITY INSURANCE Must be in the range of 0 to 100 In case of respect the imposed minimum E013 ERROR ON THE ANNUAL NUMBER OF THE QUALITY AUDITS Above or equal to zero lower than 6 If no audit the efficiency of Quality Assurance will be affected A too high value would have no significant incremental effect Chapitre IX ERROR MESSAGES 165 E014 ERROR ON REQUESTED AQL LEVEL The quality of purchased raw materials is linked to the requested AQL that must be between 0 5 and 6 E015 ERROR ON OF PARTS UNDER AUTO CONTROL Between 0 and 100 E016 ERROR ON OF SALES UNDER QUALITY ASSURANCE Between 0 and 100 100 means that 100 of finished goods are tested E017 HEADCOUNT OF QC DEPARTMENT IS INSUFFICIENT TO P
35. himself to the game Untverse 1 ev 1 WIN TEAM INTERNATIONAL Alain DELON gt 2 Peertech Inc Catherine Leonardo DENEUVE DICAPRIO 6 3 Summer Associates Company C Team organization recorded in organization chart The distribution of responsibilities within your team is left to your choice It may depend on the number of members of your team strategy the expertise of each teammate It is useful to define a distribution of responsibilities in order to e share the workload analysis and preparation of your decisions e clearly define the contacts of your banker e cover the main functions such as marketing finance production quality and human resources You can display and print your organization chart and also the charts of your competitors Obviously the game control will have also an access 134 l Business Game User s Guide Modifying the organization chart From the quarter of 12 you will translate these choices in your organization chart Upon creation of the structure one box only exists It cannot be deleted It corresponds to the general management of the company company 2 a Chairman chairman player In each box you will see three types of buttons e With the button on blue background you add a box UNDER the current box level e With the button on green background you add a box inside the current box to define a sub department corresponding to a
36. in particular o The reports available The database and graphics Quantitative Method The Financial News The transfer of data to Excel e Give you access to documents User Guide Online Help Frequently Asked Questions Preparation Instructions Guided tour o Game s tutorial e Give you information about the session o Agenda o Team composition o Session Parameters e To help you to respond to the Preparation questionnaire O O O O D O In this mode certain functions are not accessible and will be activated in real mode e The choice of name and company logo e The data entry and recording of decisions e The simulation of results e Setting objectives and strategy 162 i Business Game User s Guide D How to play a quarter HOW TO PLAY A QUARTER Model calculation Data base Graphs She 5 gt Person Sales plan Simulating results The game is played on a network It is accessed on the Internet your intranet or on a dedicated server with a Web browser such as Internet Explorer Firefox Google Chrome Safari Y our PC must have a recent version of Adobe Flash Player The game data is held in a data base which allows sharing of data with game control Then you can on your own PC view reports view and print graphs analyze the variables of the database through quantitative methods read the Financial News Evaluating your performance against your decisions and the last quart
37. indicator shows the satisfaction or the dissatisfaction of personnel related to hiring or layoff decisions investments workload market shares SATISFACTION ON WORKING CONDITIONS This indicator shows the satisfaction or the dissatisfaction of personnel related to labour time training age of machines CLAIMS LIST These lines give a short list of the reasons for personnel s claims 60 l Business Game User s Guide Some of those claims are punctual Some other could be more global for example in case of full disagreement on salary policy You have in all reports the element to evaluate on a quantitative basis the reasons of those claims Follow them quarter after quarter Your analysis will allow you to prevent social reactions 4 Human resources indicators HUMAN RESOURCES INDICATORS Satisfaction on salary Satisfaction on job security Satisfaction on working conditions Purchasing power Personnel turnover Absenteeism rate Number of personnel claims Hours lost on strike people unionized Unexpected departures Natural attrition PERSONNEL SATISFACTION GLOBAL SATISFACTION This indicator merges the satisfaction or the dissatisfaction of personnel related to the global personnel policies in your company SATISFACTION ON SALARY This indicator shows the satisfaction or the dissatisfaction of personnel related to their purchasing power SATISFACTION ON EMPLOYMENT SECURITY This indicator shows the
38. o intrinsic product quality influence of design on quality This is the of R amp D budget to improve the intrinsic quality of your product This is only part of your quality policy which will also cover the materials and manufacturing o marketing communication improvements This is the of R amp D budget to improve the advertising It will act as a multiplier effect of your advertising dollars 104 l Business Game User s Guide 5 Manufacturing decisions Production capacity BH USA Current A France Capacity increase BN Morocco Machines renewal Manpower Workload evaluation Machines workload rate Manpower workload rate of overtime Workload rate limit PRODUCTION LAUNCHED BY DESTINATION e PRODUCTION PAR DESTINATION It is the production of the quarter expressed in units broken down by country of destination It is also the quantities exported to MOROCCO and FRANCE deducted from the total production of the quarter These quantities will be available for sale next quarter Obviously the quantities exported may not exceed production e TOTAL PRODUCTION Sum of output by destination decided this quarter expressed in units It must not exceed the current production capacity PRODUCTION CAPACITY e CURRENT This is the total installed capacity you could use for the production of this quarter This value can be reduced It results from the capacity of the previous quarter plus any investment capacity of the
39. observed and actual costs will differ from these standard values You will find real values in the production report and results of simulations Volume effects will manifest themselves in two ways the labour unit time and unit cost of materials purchased e Depending on the total volume produced for all countries for example a company that has invested and which therefore produces more will see its unit cost down Conversely underutilization of capacity would lead to an increase in unit costs e Depending on the volume launched for a country So you could decide to concentrate production from one quarter to one country then to store these products with a unit cost has been optimized PRODUCTION COSTS MANUFACTURING STANDARDS Planned hours by unit Standard cost standard manpower standard materials Standard Overhead PRODUCTIVITY Average machines age Productivity ratio Actual hours by unit MANPOWER COSTS Vs VOLUME saving due to total volume Saving due to volume on country Total hours saved sawing or overcost Final Manpower unit time MATERIALS COSTS Vs VOLUME Saving due to total volume Saving due to volume on country Saving on purchasing costs Ssaving or overcost Standard materials cost Materials cost with AGL Final materials unit cost 20 l Business Game User s Guide American French Moroccan product product product Standard cost of manpower Standard cost of raw materials Standard
40. only charged to the headquarters The R amp D influences the three markets ISO STATUS Situation of ISO 9000 certification in this company YOU CAN GET CHARTS EXTRACTED FROM MARKETING REPORTS Simply click on areas of figures which appear in red in the reports displayed on the screen when the mouse points to this value or the icon graphic which is on the line results 3 une 1 EA gt Y a E NL t JL o2 3s 4 5 6 Jg TANE TO gt E Sdn LLLI ee Chapter IV THE GAME S REPORTS 89 5 Game s score amp objectives Ranking on objectives Ranking Points _ Value _ Priority Alfa Romeo My Irish Pub Company 3 Company 4 qnd usta Ai BMW Earning per share nr r 5 n Company Return on equity ompany market value Profit ower turnover Worldwide market share ales plan accuracy satisfaction of personnel Quality cost vs sales This report will be available at the end of quarter 12 TEAMS POSITION The rankings are based on rules defined in the section Objectives and Strategy You see in the column score the number of points scored by the team after playing the last quarter The evolution of the ranking is displayed in the graph POSITION ON OBJECTIVES For the objectives active in this session you can see e The place obtained on each objective e The points granted for this objective e The value obtained on this objective e The priority chosen by the team for this goal 1
41. own network of bonus apply on salesman salaries The effectiveness of your distribution will own combination of sales territory and bonuses Colour indicators on decisions level The level of distributors margin or the size of sales force amp salesmen bonus are evaluated with a colour bullet varying from red to black You can select a economical level or an aggressive level Too weak SALES VOLUME EXPECTATION These forecasts are used to produce a simulation calculation of results The menu tells you O O O Sales of previous quarters Inventory available for quarter sales Sales expected in this quarter SALES PLAN Y ou enter the amount of sales hoped for without exceeding the available stock of course You can introduce this plan for 1 to 4 quarters and launch simulation IF THE DECISIONS OF SUCH QUARTERS ARE ERROR FREE Available for sales back to factory Chapitre VI DECISIONS MAKING 103 4 R amp D decisions Product Quality Communicati m M e RESEARCH amp DEVELOPMENT BUDGET R amp D budget in US charged only to headquarters but influencing all markets This budget can be split between three axis in o product enhancement it will influence the positioning of product and improve its cost These improvements will play on the sophistication of the product and therefore its value perceived by the customer and on improving 1ts manufacturing process resulting in cost reductions
42. procurement e ai Suppliers under QA 36 10 10 LE Number of audits AQL 96 8 a E Confidence level size of control sample 50 H Receiving inspection Level of raw defects 1 3 4 6 5 10 12 Probability of detection 0 0 1 05 34 11 1 236 39 4 Quality in manufacturing Quality circles Autocontrol level 95 Training budget E Retouching COMPLIANCE WITH QUALITY PLAN If you start the ISO 9000 process see the corporate decisions you will see to the left field of the decision the minimum or maximum limit imposed in your Quality Plan If you respect this limit it will appear in GREEN If it is RED you do not respect the limit three cases are possible e You are still in the preparation phase of the ISO certification no problem you still have time to get ready and meet the limit e You must pass a certification audit it will be refused but you can request to delay the audit e You were already certified ISO 9000 You will lose certification RESPECTING CONDITIONS TO BE ISO 9000 130 conditions 3150 Plan approved Flan respected Measured defects 4 2 6 gt 3 5 05 Preparation delay Once you begin the process ISO 9000 you define your Quality Plan You ll need at least 6 months then two quarters to be ready for a first Certification Audit To achieve this certification you will have to meet four conditions e Your Quality Plan was signed by the ISO auditor e Your decisions meet the s
43. production overhead includes e the depreciation on shop capacity e the operation cost linked to the manufacturing as energy maintenance shop management e the cost of Quality staff e the cost of scrapping defective goods in the manufacturing process and at final inspection The real cost of raw materials varies with the selected quality level AQL scraps related to destructive receiving inspection and influence of Quality Assurance on purchasing price The real personnel costs include wages and charges bonus and profit sharing social expenses In case of strike the non working hours are deducted and never paid OVERTIME HD 5 Additional cost paid for overtime Current value is 5096 of normal salary LOST HOURS H 6 Cost on non used personnel due to production shortage HIRING AND LAYOFF COSTS H 7 If the PERSONNEL module is used this account also includes the cost of incentives for voluntary resignation and early retirement LOSS ON RE IMPORTED PRODUCTS H 8 It is the difference at standard cost of the value of products brought back from a foreign subsidiary to the headquarters TOTAL GENERAL EXPENSES H 9 4 5 6 7 8 TRANSPORTATION FEES H 10 Always paid by the headquarters IMPORT DUTIES F 11 Paid by the foreign subsidiary that receives the goods it is the total imported quantity multiplied by import unit fee This charge cannot be recovered in case of re importation of goods A
44. quarter 12 Choose the company logo a Lact done quarters Record your organization chart Negotiate eventual credit lines or common stock variation Take your first decisions DECISIONS e dme DA Check decisions Send decisions Chapitre X ERROR MESSAGES 169 Discover the l Business Game in the Guided Tour i Business Game E Cette pr sentation rapide vous explique les principes de la simulation les r sultats que vous recevrez les menus du jeu et leur utilisation Utilisez le site Web de pr paration pour connaitre la situation de votre entreprise et du march imprimer vos rapports analyser les chiffres du pass pr parer en quipe votre strat gie Version 1 c BG Consult Visite Guid e i Business Game And in the the i Business Game Tutorial i Business Game Tutorial i Business Game Business Simulation This tutorial does not cover the simulation model or the rules of the game that can be found in the User s Guide and the Guided Tour In this PowerPoint you can familiarize yourself with the handling of programs 170 i Business Game X INDEX User s Guide absenteeism 35 advertising 11 12 13 41 76 88 95 101 103 age pyramid 20 AQL 20 29 64 113 audits 29 auto control 31 34 B2B 12 banker 4 bonus 20 35 capacity 13 14 15 16 17 19 21 22
45. satisfaction or the dissatisfaction of personnel related to hiring or layoff decisions investments workload market shares SATISFACTION ON WORKING CONDITIONS This indicator shows the satisfaction or the dissatisfaction of personnel related to labour time training age of machines PURCHASING POWER Starting from quarter 2 this ratio measures all variations of net income of company s workers against inflation rate All salary elements are taken into account as salary bonus and profit sharing minus taxes on salaries ABSENTEEISM RATE of manufacturing people being absent during the quarter Manpower capacity is reduced accordingly and cannot be compensated by overtime NUMBER OF PERSONNEL CLAIMS See Claims reports Chapter IV THE GAME S REPORTS 61 HOURS LOST ON STRIKE Number of working hours with a production stopped due to strike PEOPLE UNIONIZED of workers affiliated to Unions These people could follow the Union recommendations in case of social conflict UNEXPECTED DEPARTURES Number people having resigned Corresponds to manpower turnover NATURAL ATTRITION Number of departures linked to age 62 1 Business Game User s Guide 9 Human resources Aging profile O Age range Number Salary coefficient 20 30 196 0 76 30 40 176 E 0 95 40 50 148 E 1 07 50 52 30 1 09 52 55 af 1 11 55 60 38 1 14 Ili 0 1 2 3 4 5 The manpower is broken down by age group Each age is a factor tha
46. screen and printed reports is similar This chapter therefore explains the content of these reports whatever the manner of obtaining them Reports at the corporate level or for subsidiaries are available from the two quarters 2 to the last quarter already played so early in the game the quarter 11 After simulation calculation and reports on simulated quarters are available but they are labelled SIMULATION AS REPORTS Qu 0 Corporate reporte Stock market LITT Market Competition Marketing Sales inventory Marketing decisions Marketing indicators m Manufacturing Decisions Report Costs Indicators Y Human Resources Decisions Social report Claims Age pyramid Indicator e Quality Decisions Report Costs Indicators E Finance Finance decisions Operating income Net result Retained income Treasury Balance sheet Financial indicators Chapitre III THE GAME S REPORTS 39 2 PRINTED REPORTS By using the Printer button contained in the reports displayed on the screen you open a web page that contains the report Then use the print function of browser to print this page w j q e FINANCE NET RESULT 50110 Income from investments 81255 Interests paid on loans 129875 Net financial results 121750 Change in currencies o Additional results 4 Net income before tax 62644 Tax rate 48 00 Tax on income 0 5 Net income after tax e If you w
47. share al Stock market share value all Price Earning Ratio al DIVIDEND PER SHARE 0 155 247168 450000 12159000 5 11041585 5 1 485 27 02 5 18 25 0 155 124366 450000 15344999 5 10984122 5 0 30 5 34 105 112 32 Dividend per share decided in this quarter US NET INCOME Net income in USA NUMBER OF SHARES Current number of shares released MARKET VALUE 0 155 120313 450000 11434500 5 10838217 5 0 26 5 25 41 5 96 27 A 0 155 55407 450000 14643000 5 10868712 5 1 245 32 545 WIN TEAM IN Peertech Inc Summer Ass BELFRAN Cor La 5eme Cor Six 0 15 197674 450000 14634000 5 10706734 5 2745 32 525 11 85 E 0 15 38501 45000 14444999 11001164 Total market value of the company calculated as the product of the number of shares by the current stock value Theoretically it would be the amount of money needed to purchase all common stock shares at current market value imagining that the Stock Market would not react NET VALUE This is total EQUITY of the company in US If figures approximately the company s real value It is also equal to liabilities minus debts EARNING PER SHARE Net income divided by number of shares SHARE VALUE Current value of the company s share on the Stock Market in US PRICE EARNING RATIO PER Share value divided by earnings per share This is a way to evaluate the potential of profitability when purchasing a share Chapte
48. strategy docu ment Close Request the download of your document It will be placed on your PC as all downloads from the Internet and then you can consult it 156 l Business Game User s Guide 3 Game s ranking Objectives Indicators Positions Ranking on objectives 2 Ranking Points Value Priority Alfa Romeo My Irish Pub Company 3 y Aueduio Company 4 BMW Company 5 Evolution mpany market value 800 Profit over turnover orldwide market share Sales plan accuracy ventory turnover Retained earnings d a a c 2 2 2 2 2 6 2 2 3 Satisfaction of personnel w a o N OO d a U C qi Qi d Qn d o Qno CO d cn D GO wu 0 WwW un CO cun tu A Quality cost vs sales The ranking of the game will be determined based on the results obtained for the objectives amp priorities of you ve 9 Copy decisions j Simulation chosen at the beginning of the session M wem Every quarter you can find out the score and classification E Benchmarking as well as the values obtained for each objective 49 Organization You can view e The place obtained on each criterion e Points scored on each criterion e The values obtained for each criterion for ranking e The priorities chosen by the competitors Chapitre VII USING THE PROGRAM 157 4 Competition analysis C Objectifs seulement 2 Return on equity 3 Company market value 5 Profit over turnover 6
49. where you see two working areas e Left The area Decisions for recording and posting decisions e Right The section Reports and Database In the lower part of each area you can display a chart by selecting 1t in the report or database 120 l Business Game User s Guide EN Checkecisions Organization chart Strategy ds E EPM CEPI Universe 1Team2 J Limit20 06 16 00 LO Simulation Objectives Juin 2013 J Current quarter 12 Left 30 d 8h 48min UA A 2 REPORTS are mE BU MN ee 79 NET RESULT Sales price Operating result Advertising budget Income from investments Interest on loans Product 36 Net financial result Change in currencies Image 36 Additional result Distribution 36 Net income before tax Companies income tax rate Distribution network Tax on income Distributor margin 96 Net income after tax Sales force Sales bonus 96 Previous sales Available for sales Send back to factory Sales plan Cnr co Fom Hij HAK O ue Xx a 260000 200000 300000 300000 240000 400000 180000 500000 120000 0 700000 2 3 4 5 6 7 8 9 10 11 12 2 3 4 5 6 7 8 9 10 11 INFORMATIONS ET MENU Game 39 Simulation HP Objectives The Selection menu is open clicking the button 3B Rankings 49 Benchmarking with the game s logo It gives access to various functions and or 4 Strategy 39 Organization information in the browser win
50. you need at least 8 quarters to get a result The calculation is the prediction values of this variable for the months remaining until quarter 24 Open the menu TOOLS QUANTITATIVE METHODS Select the location and domain of the variable to be analyzed Double click the variable in the list Select the method seasonal adjustment Select the range of quarters of the analyzed series Must be at least 8 quarters for assessing seasonality The time series analyzed in blue the trend line in green and the series resulting model in yellow are displayed on one graph The program displays a table showing the seasonal coefficient for each quarter The forecast is based on the trend line on which we apply the coefficient of the quarter Chapitre VII USING THE PROGRAM 147 4 EXPONENTIAL SMOOTHING a E uH ike E Global market USA 1690900 E 2404400 uj Marketing LI Actual values Smoothed ne 2112400 m Manufacturing gt ES 2078200 amp Quality ur 3200000 2123900 E Human Resources i 3000000 200900 b R amp D X Finance mon TM 2600000 EE France sl 2400000 2622700 am gel 2200000 Marketing 3224600 2000000 Finance Average sales price 1800000 Country s share in turnover 1400000 Country s share in volume 1200000 Defects raw materials 1000000 Global market B00000 Global publicity effort 800000 GNP 400000 Quarterly inflation 200000 Seasonality D Total sales volume Yearly inflation Result Smoot
51. 00 1800000 When the applied rate is a variable rate it will vary with the quarter prime rate the difference between the first rate granted and the prime rate remaining constant Chapitre II THE SIMULATION S RULES 2 If it is a fix rate it will remain constant and it will not be possible to renegotiate the rate during the credit line duration Nevertheless it could be possible to close the credit line in order to negotiate a new credit but with payment of penalty for early closing of the previous credit If the credit is negotiated during a quarter when you decide a significant capacity investment you will get a loan rate bonus According to the quality of the project file presented to the banker he could decide to grant you with a rate bonus but it could also impose a penalty if he thinks that the risk 1s too high k In addition if your short term debt ratio is exceeding a defined threshold the credit duration could be limited In this case the proposed rate will appear on the menu into brackets and this option will be disabled In all cases to get a new credit line or to renew a credit arriving at end you will have to negotiate it with the banker presenting a file to justify your request and the planned usage of the borrowed money In case of refusal on the whole credit request or on a partial amount your long term debts will be reduced accordingly and will generate additional short term debts The credit planned
52. 021319 5 15 H Q Variance on production cast Cost of overtime Cost of lost hours Hiring ar layoff cost Loss on reimported products Total overhead costs Transportation fees Import duties Advertising budget Research and development Inventory cost Sales administration cost Distributors cost Cost distribution network Cost of warranty Miscellaneous expenses 307945 7983 05 174000 o 60559 0 420000 300000 41328 226481 1979628 5 05 47635 115000 489928 5 Operating expenses Total charges 3190631 5 3680559 5 EBIT Operating result EBITDA 1811262 5 1196262 5 Some items in this report have only significance for the headquarters results They are marked with H If they are only available for a foreign subsidiary the marking 1s F Values are in local currency SALES Sales value sold quantity x unit price in this market COST OF GOODS SOLD Sold quantity value at standard cost GROSS MARGIN Generated by quarter s sales 1 2 VARIANCE OF PRODUCTION COST H 1 2 3 4 Chapter IV THE GAME S REPORTS 71 It is the difference between the actual real expenses for personnel raw materials and overhead and the corresponding value covered in standard cost This variance does not include the additional cost of overtime the hours lost for production shortage the hiring or layoff costs This account is balanced in each quarter The
53. 100 iterations if there is no convergence The program will also show PAYBACK period of your investment The calculation is repeated automatically when any element of the hypothesis is changed Be sure to provide a quarters range of your new capacity usage to have economic significance your investments are amortized over 10 years You can save the project with a number of hypotheses from 1 to 5 assumptions beyond the current hypothesis giving it a title example Project 1 These hypotheses remain stored and can be recalled to modify and then save another variation of your project To calculate a Return On Investment Use the menu TOOLS RETURN ON INVESTMENT A popup window is open Investments C 110000 34000005 x 2500000 5 2 You introduce your investment plan new capacity and quarters where this capacity is installed Use the button to add a slice to increase capacity Change the value created by default Use button to delete the line Vary the assumptions of quarters and capacity to see the impact on the calculation Expected sales H4 E Volume 100000 TEEE Fro a f z AC E e Enter the expected additional sales plan time range quantity NET margin by unit and country of sale Take care of entering margin in local currency e Use the button to add additional sales e Change the default values loaded first quarter last quarter sales growth in units country click on icon e Use
54. 14 39 Profit on sales 5 04 96 EBIT Consolidated 1748641 5 1196262 5 310244 1018182 d Quaterly depreciation 615000 0 Od EBITDA Consolidated 1133641 1811262 310244 E 1018182 d Earnings per share 3 33 Stock market share value 18 44 5 Market value of the company 11064000 Net value of the company 13873101 5 Goodwill value 2809101 5 Price Earning Ratio 5 54 End retained income 818601 Long term debt rate Short term debt rate Total debts rate LIQUIDITY value of inventory financial investments treasury short term debt SOLVENCY Equity total debts INDEPENDENCE Equity Long term debts Chapter IV THE GAME S REPORTS 81 AVERAGE INTEREST RATE ON DEBTS Average interest rate on total debts This report displays the values of these ratios and in front of each some pointers that show e the ratio level against usual business values e At left side the ratio is in red zone e on the right in the green zone That allows you to evaluate the status of your results RETURN ON EQUITY 4 x Last quarter income x 100 Equity PROFIT ON SALES Last quarter income Last quarter sales EARNINGS PER SHARE 4 x income in last quarter number of shares EBIT Consolidated Earnings Before Interest amp Taxes Cumulated operating income for headquarter and subsidiaries QUARTERLY DEPRECIATION Depreciation of industrial assets in this quarter EBITDA Consolidated Earnings Before Int
55. 27 28 32 35 45 47 49 51 55 60 71 72 76 79 83 92 96 104 105 109 149 150 164 166 Certification Audit 32 claims 59 CNQ 34 67 connection 126 COQ 34 67 corporate results 83 correlation 144 148 cost 49 costs 18 credit 27 107 credit line 26 credits 106 currency 25 28 74 85 data base 143 database 123 decisions 96 98 117 decisions in a table 121 defects 15 66 depreciation 22 discounted cash flow 149 distribution 11 12 13 22 23 25 28 41 42 44 72 76 87 95 101 102 distributor margin 23 dividend 28 documents 137 EBIT 72 81 EBITDA 72 81 error 116 158 164 Excel 138 139 exchange rate 74 exponential smoothing 144 147 export 13 FAQ 130 fidelity 12 13 final quality 29 31 financial charges 26 27 financial investments 27 Financial News 136 Financing 25 foreign subsidiaries 79 game session 160 general increase 20 35 GNP 11 85 graphs 141 Help 128 hiring 14 20 hours 47 ID and a password 119 import 22 indicators 157 inventory 18 investment plan 149 investments 15 16 17 22 IRR 150 151 ISO 9000 31 63 101 111 ISO certification 12 Language 126 layoff 35 layoff 14 20 learning curve 13 22 66 lignes de cr dit 164 linear regression 144 145 loan 26 loans 69 107 logo 132 INDEX machines 14 15 21 manpower 13 14 15 16 19 20 21 22
56. 29 0 95 157 24 1 07 30 4 1 09 37 5 1 11 46 T 1 14 As for other disciplines analyze the environment plan your policy and then decide Chapitre III 3 HUMAN RESOURCES SOCIAL REPORT PERSONNEL MOVES Manpower in quarter 1 1 Manpower in quarter Q Retirements Resignations Self wiled departures Early retirements Layoffs People hired Retirements planned in G1 Possible early retirements INCOME Basic salary social charges rate Average cost of salary Profit sharing Average yearly income Gross evolution of income Yearly inflation Net change COMPENSATION EXPENSES Profit sharing cost Bonus social expenses Cost of early retirements Euooooull 16 16 3 53 19 69 SOCIAL CLIMATE people unionized Number of personnel claims Days of strike Number of strikers Man days lost on strike Personnel turnower Absenteeism Purchasing power ENVIRONMENT Quarterly inflation Prices index Tax on personnel income Average income Average salary Average turnover Average labour week Average vacations weeks Unit cost hiring Unit layoff Cost of hiring people Self wiled departures Layoffs cost Total cost of personnel 38 l Business Game User s Guide IV THE GAME S REPORTS 1 AVALAIBLE REPORTS You will have various reports either dedicated to your organization or common to different teams These reports can be viewed on screen or printed at your request The form of reports on
57. 32 22 30 TREASURY AT QUARTER END 33 29 30 This value appears in the balance sheet It will never be below zero since a negative treasury is automatically balanced by short term loans 6 Balance sheet BALANCE SHEET O ASSETS LIABILITIES Treasury at quarter end 0 Tax on income Financial investment Short term debts Work in process Long term debts Inventory value End retained income 1984122 5 Total inventory value 4396102 Common stock 3 Affiliated companies 172967 Industrial assets Net value of 14070000 Total assets 19146089 Total liabilities ASSETS TREASURY 1 Treasury at quarter end FINANCIAL INVESTMENTS 2 Present total of financial investments e WORK IN PROCESS 3 Value at standard cost of goods produced in the quarter Chapter IV THE GAME S REPORTS 19 e INVENTORY 4 Value at standard cost of finished goods in inventory at quarter end TOTAL INVENTORIES 5 3 4 AFFILIATED COMPANIES 6 This value in US represents the translated net value of foreign subsidiaries This value is reported as INCOME RETAINED in the Balance Sheet of the subsidiary INDUSTRIAL ASSETS 7 Original value of the plant capacity based on the unit value of 30money 1 per unit capacity installed DEPRECIATION 8 Cumulated value of quarterly depreciation from the plant creation The yearly depreciation rate is 10 NET VALUE OF ASSETS 9 7 8 TOTAL ASSETS 10 1 2
58. 4 1884000 2481288 H E Balance E Net present value 24 95 452000 317024 1432000 2164265 25 95 452000 307790 980000 1856475 5000000 4000000 26 95 452000 298825 528000 1557650 3000000 27 95 452000 290122 76000 1267528 2000000 28 95 452000 281671 985856 1000000 29 95 452000 273467 712389 l 30 95 452000 265502 446887 0 1000000 l 31 9596 452000 257769 189117 2000000 32 9596 452000 250261 3000000 33 9596 452000 242972 4000000 34 9596 452000 235895 5000000 35 9596 452000 229025 6000000 36 42 252000 123967 37 42 252000 120357 4 On the yellow curve when the balance between the gross investment costs amp the gross sales incomes from margins is passing the zero level this quarter correspond to the payback period On the green curve when the balance between the gross investment costs amp the gross sales incomes from margins is passing the zero level this quarter correspond to the quarter when the project value become positive 152 l Business Game User s Guide While modifying the project parameters quarter margin country you will see the curves adjusted dynamically If you display the table of flows you will find for each quarter e The of usage of your new capacity sales new capacity o It would normal that the new capacity would not be totally used immediately when installed You could then modify your project to spread the increase ove
59. 6015 3217215 3318416 3419616 3520817 3522018 3723218 3824418 3925619 4025820 4128021 4229221 145 Applied to a variable it will give you the equation of the regression line fitted by the least squares method and the forecast based on this trend You can limit the range of the quarters of the analyzed series The calculation is the prediction values of this variable for the remaining months until quarter 24 Open the menu TOOLS QUANTITATIVE METHODS Select the location and domain of the variable to be analyzed Double click the variable in the list Select the linear regression Change the quarters range subject to analysis The bar chart represents the analyzed series The regression line is green The menu displays The average The standard deviation The variance The equation of the trend line 146 l Business Game User s Guide 3 SEASONALITY amp TREND I Ta 1 X I z Qj Ala Romeo a adjus From To z N Global market USA 2 1690600 1971519 El S Marketing E Actual walues B Trend m Seasoned 3 2404400 2051256 4 2112400 2130993 Manufacturin ra is 5000000 5 2078200 2210730 2036092 ny j 6 2123900 2290466 2071187 y Human Resources 4000000 T 2600900 2370203 i R amp D a 361100 2449940 3 Finance I i 2000000 9 2063000 2529677 E 26227700 2609413 BF n 3224600 2689150 i Marketing islas 2768887 X Finance 1000000 iced Average sales price 2928351 2648012
60. As BELFRAM Cor La 5eme Cor Sixt Fixed assets ll 14025000 14070000 14010000 14062500 14040000 14062500 Consolidated inventory LIB 4197446 4396102 4201150 4197371 4198461 4196747 Consolidated treasury iJ 0 285127 247117 0 100901 0 Common stock iil 9000000 9000000 9000000 9000000 9000000 Income retained ll 2041565 1984122 1838217 1866712 1706734 2001164 Consolidated loans iJ 6000000 6000000 6000000 6000000 6000000 6000000 Consolidated taxes if 252484 136668 132820 100843 119005 113897 This report represents the summary of corporate results published quarterly by each headquarter FIXED ASSETS Net value of industrial assets Gross value of plant capacity less depreciation INVENTORIES Inventory value and work in process value in the headquarters accounts TREASURY Treasury of headquarters at quarter end COMMON STOCK Value of capital represented by the total common stock shares of the company INCOME RETAINED Cumulative value of income after tax not distributed to shareholders as dividends LONG TERM LOANS Total of used long term loans on the three markets in US with foreign currency loans valorized at current currency rate INCOME TAX Cumulative value of taxes due in the three countries for the income of this quarter figured in US 84 2 Stock market report 1 Business Game User s Guide Dividend per share ail Net income all Stock shares m Market value of the compe ail Net value of the company ail Earnings per
61. BONUSES or PROFIT SHARING The basic salary and the different bonuses are not the only element of the salary cost you have also to pay social charges 28 5 The salary cost is also influenced by the age profile of your personnel You will follow it through the Aging profile showing the effects of your recruiting policy retirements or layoffs In the Social report you will see the social environment evolution as INFLATION RATE PRICE INDEX AVERAGE SALARIES AVERAGE LABOUR TIME AVERAGE TURNOVER Use those indicators to evaluate your own personnel s revenue position This will allow you to plan your company policy and make it a competitive tool 3 Social policy You can allocate an amount defined as a percentage of the salary charges to SOCIAL EXPENSES sport entertainment solidarity and you will decide on the TRAINING effort as a percentage of the salary This will influence motivation but also quality and productivity 4 Employment policy You have read before that you can decide within the limits of regulations and labour market capacity the requested manpower to produce the planned quantity and for your Quality staff The headcount evolution will also vary with retirements and resignations A bad social climate in a bear labour market will increase the TURNOVER you can compensate by recruiting if it is possible In any case it will be expensive If you need to decrease the headcount beyond the natural departures
62. CCEPTED YES or NO according to your decision to accept or not early retirement for people above the legal limit of 55 Early retirement occurs only in case of personnel shrinkage MONTH BONUS FOR SELF WILLED RESIGNATION That is the number of monthly wages given to people deciding to resign in case of personnel compression NATURAL DEPARTURES ARE COMPENSATED YES or NO to compensate or not the retirements and resignations 2 Social report PERSONNEL MOVES Production manpower Production manpower Retirements Departures Selt willed departures Early retirements Layoffs People hired Possible early retirement INCOME Basic salary Social charges rate Average cost of salary Profit sharing Yearly income Gross evolution of income Yearly inflation Net change COMPENSATION EXPENSES Salaries and charges Cost of profit shai Cost of bonus Social expenses Cost of early retirements Social report n E SOCIAL REPORT 625 SOCIAL CLIMATE 625 of people unionized 2 Claims from personnel 0 Days of strike 0 Strikers 0 Lost days on strike 0 Personnel turnover 2 Absenteeism 2 Change of purchasing power 38 ENVIRONMENT Quarterly inflation 7 33 Prices index 26 50 Tax on personnel income 6 913 Average yearly income 50 Average salary 15254 5 Average turnover 10 18 Average labour week 0 38 Average vacations 9 79 Unit cost hiring Unit cost layoff 2914625 5 37500 5 Cost of hiring people 625000 C
63. Certification 16 Certification 17 Pas d audit 18 Pas d audit If the conditions are respected you will get your ISO 9000 Certificate It will remain valid for one year At the end of this year you will have to realize a Recertification Audit that will check if the ISO conditions are still respected or if you have changed the conditions of your Quality Plan If you lose your certification you will have to go through this Recertification Audit without waiting the yearly cycle The audit has a cost corresponding to the work and to the certification commitment given by the certification authority These costs will be accounted in your operating results in the line Miscellaneous They will also be included in the Quality Costs e 15 000 for a Certification Audit e 5 000 for a Recertification Audit Beyond the costs related to the audits you will have to dedicate people to prepare the certification 3 people and to maintain it 1 people The positive impacts of an ISO 9000 Certification are perceived when the Certification is granted up to the time it is lost 5 Warranty If you adopt a low quality range for your products or if your planned quality decisions do not insure the requested filters you will have defective products in the sold quantity Part of these defects will be detected by your customers who will claim for replacement under your warranty policy Then you will los
64. Consider that some of those figures can have approximate values because it is sometime difficult to get very accurate data on market shares or advertising expenses of the competitors You will note in the historical reports that the competing companies are at the end of quarter 11 in the standard scenario in a very similar situation although the past evolution was different You can consult all the results of previous quarters The comparison between global marketing reports and the accurate internal reports about your own results will allow you to evaluate the accuracy of global reports Be careful That will represent a significant amount of data that you will have to analyze to extract the relevant information With these reports and using the decision aid tools for analysis and forecasting you will see that the total demand on each market varies essentially according to six factors Gross National Product Season variation Global advertising effort Research amp Development effects Average prices on market Global efficiency of distribution networks 12 l Business Game User s Guide Your competition position will be influenced by the gap between you and your competitors for prices R amp D advertising and quality You can also adapt your distribution policy and select decisions aiming to motivate your sales force You are working in a B2B activity In Business to Business your clients are industrial companies having
65. DVERTISING 12 Advertising budget in the country during this quarter in local currency RESEARCH amp DEVELOPMENT H 13 Paid by headquarters WAREHOUSING COST 14 Cost of warehousing related to the quantity handled in inventory at quarter end 72 l Business Game User s Guide SALES amp ADMINISTRATION COST 15 Those charges include the distribution network costs excluding incentives the investment in new network and the sales administration costs They also include the cost of customer service related to the volume of claims received This amount does not include the cost of products given for replacement of defective goods WARRANTY COST 16 That is the cost of products replaced under the warranty clause valorised at standard cost MISCELLANEOUS H 17 Includes e The fixed cost for a capacity investment project 100000money 1 e The cost of share purchasing or releases e The machine refurbishing expenses e The cost of ISO 9000 audits OPERATING EXPENSES 18 10 11 12 13 14 15 16 17 TOTAL EXPENSES 19 9 18 OPERATING INCOME EBIT 20 margin 3 charges 19 EARNINGS BEFORE INTEREST TAXES DEPRECIATION AMORTIZATION EBITDA 21 EBIT quarterly amortization see balance sheet or financial indicators Chapter IV THE GAME S REPORTS 13 3 Net result NET RESULT Operating result Income from investments Interest on loans Net finan
66. Dorm mare DUNCONCI jou ud rare 500 compa You wail tmom into mccount the economical genu anc politics ecient You will fire uneful fi information m mmch pumi in thom E IMARCIAL MEAT Ario thane information and bont hentai a 300 E France What you have to do at quarter 2 200 TO SELECT TOUR PRIORITIES ON OGEECTUVES E cen TO DEFINE THE STRATEGY AMING TO REACH THE OBUECTIWES AMO TO RECORD IT TO PREPARE A FIRST SET OF DEXISHONS TO EVENTUALLY MEGOTIATE CREDITS WITH YOUR DAMER Price index TO VALIDATE YOUR DECISIONES TO TRANSFER FOUR DATA TO THE GAME CONTROL 101 2 At quarter 12 you define your objectives 104 cur mitraio umm acid m km o cbmerowr Hum ycu wd Fin hanacacec 100 8 cu meg m priory bo Ha mar cbme roar Hume ycuo act T hr prioty omnim from Coa mart important ta 1 I bang tha mami of checia pan in EFE Eo 100 6 Tha garra poora wal F uncrina tha beer which Ai namch Hoa cramer macia objective To muccmed in El USA Moo pirim ahh ccu 5a tha higher priorities for your corgia wd bring amm poiria 100 4 ME Weg Oprean hum cc L ming par ohare 2 Magram Lat rumor z Raum cn aut z Maan act Quarter a a marha vim z Magram La umber 3 Pratt owr tumeur 3 Mairu Let Four gumira E oida marka zara a Magram Lat risa a Saat Dum ELE Finium o E comen C ta Inventory burra 1 M nirnium AVENIR Dice come I IT Alaro Tire 2 W rdrrum Maraton minos rara 57 Tata ction of perra L Maan Lert Four Guerin I Clum t comt vm maium Mi
67. ERFORM THESE TASKS The tasks related to your Quality decisions the decided production volume and the sold defective parts leading to the Warranty Service cannot be realised with the planned QC staff To know the minimum staff size use the Required button E018 ERROR ON SAMPLE SIZE FOR RECEIVING The sample submitted to destructive inspection must have a minimum size of 16 and the total lot size must be at least ten times the size of the sample E019 ERROR ON LABOR WEEK HOURS Must be between 32 amp 45 hours E020 THEWORKING TIME MUST RESPECT THE REGULATION Each company can decide its own labour time policy but the labour week cannot exceed the limit defined by the country regulation E021 ERROR ON YEARLY VACATION Defined as a number of vacation weeks E022 YEARLY VACATIONS MUST RESPECT THE REGULATION Each company can decide its own yearly vacation policy but the number of weeks must be equal or above the minimum limit defined by the country regulation E023 ERROR ON OF WORKERS SHARING THE MERIT BUDGET The merit budget is distributed to a population defined as a of the personnel and must be between 0 and 99 If this budget is not zero the percentage must be at least 1 E024 ERROR ON EARNING RATIO ALLOCATED TO PROFIT SHARING Must be between 0 and 100 E025 ERROR ON BONUS Defined in the local currency Can be zero and above E026 ERROR ON SOCIAL EXPENSES Between 0 and 10 of the total compensations 166 i Busines
68. F GOODS 3 Value at standard cost of transferred goods from one country to another with the sign corresponding to the direction TRANSFERS OF MONEY 4 Amount of money exchanged between countries translated with current exchange rate One country can only hold money in the local currency These money exchange values will not affect the consolidated net value DIVIDEND PAID 5 Chapter IV THE GAME S REPORTS 19 Paid by the headquarters to shareholders of last quarter this is the part of net income distributed INVENTORIES RESTATEMENT F 6 As explained here below that reflects the influence of exchange rate changes on inventory value INCOME RETAINED AT QUARTER OPENING 7 Equal to item 9 of preceding quarter CHANGE IN INCOME RETAINED 8 D 2 3 4 5 6 INCOME RETAINED AT QUARTER S END 9 7 8 This value is added to Common stock in Balance Sheet to calculate Equity COMMENT The debts of the subsidiary against the headquarters are not accounted for in the balance sheet as a debt but are included in the account retained income of the subsidiary 9 Treasury TREASURY ISSUES TREASURY EHTRIES Production overhead charges 265000 Value of 7766497 Raw materials purchase 647563 5 Money imported s0000 5 Production wer expenses 3601952 Income from investments 1625 3 Transportation fees 20645 Financial investements sale 03 Import duties 0 Long term loans usage 03 Advertising
69. Free repayment you can make a refund at any time without penalty but irreversible For loans to Fixed payments no early repayment is possible e Anticipated repayment penalty For credits with repayment at term if you pay in advance it is the penalty applied to the refund e Bonus on rate for capacity investment If INTHE SAME QUARTER you have recorded PREVIOUSLY an increase in capacity you receive a bonus rate Default is 0 5 e Bonus penalty granted by the banker Depending on the value of your financing project the banker will give you a bonus low or a malus depending on The estimated risk The nature of the project funded The quality of the project A late application leaving no time to prepare the documents requested may result in granting credit with a penalty LOAN S RATE Rate resulting from your choice and bonus penalty applied USE THE CREATE BUTTON TO RECORD YOUR REQUEST 110 l Business Game User s Guide Scheduled payments Scheduled payments fa ance as wirests Receives Reimbursed casnnow 10 0 10 150000 10 112500 10 112500 10 You see the schedule giving the cash flow where you can enter your data reimbursements e Quarter Each quarter in which the credit would be active the quarter final repayment e Balance This is the amount borrowed in this quarter It is on this basis that interests paid in the following quarter will be calculated For a revolving
70. M MODE Index Contents Index hama i Business Game EN V1 a Index e access o Sharing access on several workstation e after sales o Sales administration costs o Social report Aging profile n o Capacity investments o Investments costs o Production overhead o Return on investments e amortizing o Balance sheet e analysis o Operating mode e animation o Session s organization e AQL o Decisions Quality o Influence of production volumes on costs o Product costs o Raw materials quality e authorizations o Credit lines and long term loans e autocontrol o Quality figures o Quality in manufacturing e balance sheet o Balance sheet Contents Index Previous Next 2 CAPACITY INVESTMENTS That is the only way to increase the machine shop capacity The decision to invest in capacity is related to the possibility of additional sales with an offset of two quarters Production capacity Current Raise by Machines renewal Manpower The decision on investment taken on quarter Q does not allow you to produce more in this quarter Q than the available capacity of quarter Q 1 At quarter Q 1 the new capacity is now available but the additional manufactured products will only be available for sales on quarter Q 2 Then you will get the first cash flow related to your investment Each investment project will imply a fixed cost for the project study
71. MAKING 113 decisions taken Vary your decisions and you will see the table of probabilities being adjusted If the receiving inspection is active you will see a scale giving the probability of detecting defects Your decisions should be consistent with AQL selected You can choose to buy better materials AQL low but more expensive without control or materials of lower quality but subjecting them to more control filter MANUFACTURING QUALITY e QUALITY CIRCLES Number of active Quality Circles e TRAINING BUDGET of time of workers dedicated to training e 9 OF PARTS SUBMITTED TO AUTO CONTROL of manufactured parts checked on the production line by the workers A detected defective part can be corrected by retouching but not with a 100 yield Retouching consumes time and you can prefer to submit goods to final checks e RETOUCHING IS ACCEPTED YES or NO according to your decision to accept or to refuse retouching on defects detected during manufacturing process FINAL QUALITY e 9 OF SALES UNDER QUALITY ASSURANCE It is the part of your sales that you realize under a Quality Assurance clause This percentage corresponds to the parts submitted to final Q check 10 Poisson sampling method This method defines the rules of sampling to accept or reject a sample taken out of a lot according to the confidence level requested P probability to accept a lot It is the probability that the number of detected defects in the sam
72. MENT SHRINKAGE Possible early retirements for resignation Compensate natural dep LABOUR TIME WORKING WEEK Number of working hours per week currently applied in the company YEARLY VACATION weeks Number of yearly vacation weeks in your company COMPENSATION POLICY GENERAL WAGES INCREASE General increase of the hourly basic salary in This increase is applied in this quarter uniformly for all personnel This increase is equally without reference to age MERIT INCREASE of salary increase given to a selected part of personnel as merit recognition OF WORKERS RECEIVING MERIT INCREASE of people receiving the merit increase OF EARNINGS FOR PROFIT SHARING of net profit distributed to personnel as Profit Sharing This is calculated on basis of last quarter net income after tax BONUS GRANTED TO EACH WORKER In US that is the amount given individually to all personnel in this quarter only This bonus is taken into account to calculate the purchasing power evolution This bonus can be decided again in the next quarter Chapter IV SOCIAL POLICIES THE GAME S REPORTS SOCIAL EXPENSES COMPENSATION 53 Calculated as a percentage of total salaries this amount is used for social activities as entertainment sport cafeteria improvement of labour conditions TRAINING EXPENSES COMPENSATION Calculated as a percentage of time of workers dedicated to training EMPLOYEMENT SHRINKAGE EARLY RETIREMENT A
73. RCHILL A o Define and upload team s strategy o Define and input team s organization Language English Validate and send decisions to Change game s control You will receive information on the status of the session and on your profile as well as the list of tasks to be performed in this quarter In your profile was recorded that the language used by default You can change it Select the Language button amp select the flag corresponding to the language Your choice will be saved for the next connection To return to the other language log off and redo your choice by logging again Use Enter button to start your activity Chapitre VII Select your own picture USING THE PROGRAM 127 Browse Save Cancel If you connect your personal account and your photo is not displayed please upload your picture by clicking Change e Click on Browse e Select a picture available on your computer in format jpg png jpeg gif e Select a picture in identity card style with a average definition file size 50K et 300K e Move the frame and adjust the picture with the arrow in bottom right corner e Save your choice 128 l Business Game User s Guide 6 Using the online Help Help User manual a Guided tour aJ Tutorial a Online help ad F A Q Aid can be called either e Inthe Help Online Help menu e Byabutton on some menus e Inthe Help FAQ for answe
74. S amp S THATEQ Y suisedisideeiutetescusbetusunaEscueuxict ctoucs uic onous un aai cac Ue ds 91 Lo RK DAO N API E O O EEE SEO A a 91 2 MODICCH VES WETS IIMS id di ca 93 3a a AA O PH 95 VI DECISIONS MAKING oocccocccooccconcconnconncconononanonnnnonononanenanronnnonanenanrnnaronanenas 96 ly D cisions data entry decisions status il lll LUE e oU LOL Deae ade CRM 96 Ze DECISIONS Al COEDOPOEO Te Vel audes tato tont ona A An 98 8 i Business Game User s Guide 5 Marke ine NOCCISIONS A e o TEA TE TE 101 Ae CRAD GCE CISIONS ui stolen bes si a PD iSo Lo dins t Sonnet MD os Coa inna ahs acd 103 de Manuta unne deeso dosi habe Dodd o Ip dee CDS QUU 104 Ge binincialdeciStODS o Cd NUS cU MEM i ID dO cd D iU 106 ZEE HOD IO LING anew Cr add escala 107 D Credit ApDEOVdl duos ited ox retains RM Diam d dine aps tidem a DE Pep is Duda p cq SQ MNUEI 110 9 A E AS 111 10 Poisson Samp line methods biie 113 11 Personnel management decisi ns ci 115 12 Emors TM CCSS m a a a 116 13 Sending the decisions to game s control ss sssse0eseeeeeseseesnseeceeseesecsesscsstecesesensesnsnereseesee 117 VIL USING THE PROGRAM nc 118 A General TN OPIN AAA A A cons 118 1 Using the i Business Game 1 1 essere eene eene nennen enn 118 2 JLhesimiulatiom SSWOPKSDIEe tard lA 119 5 Bormaltne the WorkSpace arriendo die 124 A o AN DUE 125 5 Connection to 1 Business Game and language selection oooooonnn
75. Tools the database extracted from the i Business Game to Quantitative oa Return on Excel spreadsheets UU Methods investment Export data Therefore you can create e your own management indicators e your own analysis tools e your business models e your own graphics In TOOLS menu select Data export In the menu TOOLS select Data Extraction In the pop up window choose the source or sources of data e Database Y Database e decisions Decisions e reports Y Reports You can also select the range of quarters to be included From quarter To m E 1n the table Confirm your settings with the Proceed button Choix des donn es Proceed The program creates a Excel workbook The Download button will open a window to select the name and location of the Excel file Choix des donn es v Database W Decisions With the New button you ask another extraction w Reports From quarter To Download New 140 l Business Game User s Guide ana Mae a us a e Ma a Lud ame ros map a ee 08 BEE Ri i bieiil B a i m gt m4 a alla oda Pe Ead ui kaien nun a Ca e 5 P al M T fa a tum er mri as i der E Irenriiniri Parra finn rales Falak bari Kir Kilos pri par lrhans Finca la pride Talii o nbi miraria Ha ipime Tris at Recess aF SAT opua aiiin r liwin nm m ud e Hha esn farma Metre ei Aamir teed
76. agement Social policy Hours week a0 HH iroun Sam X Social expenses Vacations E salary policy Salary general increase 2 Special bonus e Profit sharing Workload evaluation Manpower workload rate 5 of overtime Workload rate limit MANAGING MANPOWER e PRERETIREMENT ALLOWED If box checked your decision is to accept early retirement for people above the legal limit of 55 Early retirement occurs only in case of personnel shrinkage e VOLOUNTARY DEPARTURE BONUS That is the number of monthly wages given to people deciding to resign in case of personnel compression e NATURAL DEPARTURES ARE COMPENSATED to compensate or not the retirements and resignations WORK TIME e HOURS WEEK Number of working hours per week currently applied in the company e YEARLY VACATION weeks Number of yearly vacation weeks in your company SOCIAL POLICY e SOCIAL EXPENSES COMPENSATION Calculated as a percentage of total salaries this amount is used for social activities as entertainment sport cafeteria improvement of labour conditions COMPENSATION POLICY e GLOBAL SALARY RAISE General increase of the hourly basic salary in This increase is applied in this quarter uniformly for all personnel This increase is equally without reference to age e BUDGET FOR MERIT of salary increase given to a selected part of personnel as a merit recognition e RAISE ON MERIT of people receiving the merit increase 116 l Business G
77. ame User s Guide e PROFIT SHARING of net profit distributed to personnel as Profit Sharing This is calculated on basis of last quarter net income after tax e SPECIAL BONUS In US that is the amount given individually to all personnel in this quarter only This bonus is taken into account to calculate the purchasing power evolution This bonus can be decided again in the next quarter WORKLOAD EVALUATION e MANPOWER USAGE RATE in 1s the relationship between actual hours and NORMAL hours regardless of possible overtime e OVERTIME in additional hours added to normal hours It is limited default to 20 but this may change Overtime are subject to extra pay default 50 e USAGE RATE LIMIT in 1s the ratio of total hours used and hours available taking into account overtime possible Obviously limited to 100 If the limit 1s reached you will either e reduce the quantities produced e hire staff 12 Errors in decisions Error move mouse over to get details VALUE S OUTSIDE LIMITS HEADCOUNT OF QC DEPARTMENT IS INSUFFICIENT TO PERFORM THESE TASKS If an error is detected in the recording or validation of decisions a window opens that lists or error s found s For more details see the explanation of the error messages When an error is still detected an a on a red background appears on the button corresponding to the faulty decision You can close the window error and end up with the button Check decisions
78. ant to get multiple printouts aa Quantitative sa Return on For common reports 3 Methods E investment e For company reports 4l Export data 4 Print For organization charts Display the printout selection menu in Tools Print O m JUSA A CL France B Morocco LJ world C Consolidation Stock Market C Country C Market C Competition m Marketing decisions T Sales inventory L Marketing _ Marketing indicators Manufacturing L Decisions L Social report L Human Resources Claims L Indicators L Age pyramid C Decisions C Report L Quality L Costs L Indicators L Finance decisions Ll Operating income C Net result L Retained income Treasury m Balance sheet L Finance indicators Quarter Group by s country domain Print Visualize 40 l Business Game User s Guide e Select the tab to choose the type of printout o Reports Select one or several country ies Select one or several report s to be printed You can select or deselect all repots in one domain Select the quarters range to be printed Select the sorting criterion Visualize the reports or launch the printing o Organization charts Select one or several company ies to display or print their organization chart This function is available starting in quarter 13 Reports Organization 3 _ Company 5 oH _ My Irish Pub Print Visualize Chapter IV THE GAME S REPORTS 41
79. apitre VII USING THE PROGRAM 119 2 The simulation s workspace The 1 Business Game is played in communication with an Internet server using an Internet browser as Internet Explorer Google Chrome Firefox Opera or Safari with Adobe Flash Player QX Wemamema ae e ne C ce Y Each user has received an ID and a password It connects to the game by the connection menu and the server displays the workspace of the game Switch Reports Menu Task list in this data base Selection quarter nit 24 02 16 00 Checkdecisions Organization chart Strategy 07 SAME Universit 2 Universe 1 Te t t A f Diversity F la z ae ee c9 yw 9 e Al os Simulation eft 1 d 4h 20min dawdgiems ag REPoRTS DECISIONS REPORTS o Selection in Y wora Selection in menu aj Marketing TE Corporate report menu decision UB Country reports Market S Marketing Marketing decisions Sales inventory pa R amp D m Manufacturing Z Human Resources gt Quality Manufacturing Decisions A Finance Indicators z Human Re Decisions Claims Indicators X Decisions Report Costs gt Quality e Indicators A Finance Finance decisions Operating mcome Net result Retained income Treasury Balance sheet Finance indicators At the top you see the context information and below the menu
80. are in volume uL Headquarter 13 Marketing Actual values ll Regression iff Manufacturing f BR GNP E Global publicity e ouam ae omes EM moron e of FR i Human Resources lll Average sales ei Offselo w Seasonality offselo RED oon Oc tu mh qn Result Global market 1 Currency rate Correlation Quarter GNP 2 EEN Global publicity effort 3 Defects raw materials publicity e Global market Global publicity effort Global R amp D effort GNP Quarterly inflation GNP l 15513 92 Seasonality Global publicity effort l 0 07 Total sales volume Average sales price i i 199514 86 Yearly inflation Seasonality 503656 63 Average sales price on man Seasonality 5 Independentvalue 8539061 Multiple correlation coefficient 0 903 Select the Correlation method This tool is particularly interesting to analyze the influence of variables on each other This will allow you to analyze and predict changes in variables such as market market shares the stock market value To apply for the calculation of multiple regressions you choose the dependent variable and the independent variables one to five Click on the selected dependent variable in the list of data base item Then drag amp drop the independent variables into the frame above the graph area For each independent variable you can request a time offset of one to four quarters ahead or behind This can be useful in judging the e
81. assuming that you respect a minimum threshold on several criteria covered by the plan 57 150 Granted Maximum AOL 56 Level of autocontrol Suppliers under QC s Training Audits Quality circles Sales under QA 96 Quality plan Plan approved Evaluation 32 l Business Game User s Guide If the ISO module is enabled and once you decide to go to ISO 9000 you will have to define your quality plan and have it validated This plan should be studied so that it leads you to a quality and cost consistent with your business strategy Once obtained the signature of the plan if you modify it it will again need approval by the auditor if you were already ISO 9000 and pay You will need some time to prepare for your first certification of about 6 months and to perform a Certification Audit You will see the steps of certification appear in the ISO status ISO certification lost You were ISO 9000 certified but conditions are no more fulfilled You record in your Quality Plan the minimum threshold for each decision as you think they should be maintained permanently If you cannot reach them immediately 1 e due to a lack of resources you disable the button ISO When possible you will reactivate it Another solution is to change these minimal values according to your current capacity to respect them You have to know that the decisions themselves have an impact and not the simple fact to flag
82. ation given by your board To go beyond you need a approval by the SEC e the purchase or sale of shares is done at current stock value in last quarter although the nominal value of the share is 20 8 Dividends You decide at each quarter to distribute or not a dividend per share The model evaluates the stock value of your share A constant dividend policy will obviously influence the stock market reaction An irregular dividend distribution will penalize the stock value But the dividends are not the only element that will influence the market behaviour 9 Currency rate In case of devaluation or revaluation of a local currency your net situation will be affected Your inventory can be re evaluated and for the headquarters the currency change effect will be accounted in the reports as EXCHANGE RATE CHANGE 10 The Stock Market At each end of each quarter the simulation model will evaluate the stock exchange reaction linked to your company results and decisions In United States the stock exchange market follows closely your quarterly results A good trend in your results for a long time will induce a regular share demand A dividend policy will also keep up the share value but this element is not the only one taken into account Your shareholders will also be sensitive to changes in the net book value of your company According to your planned strategy mainly if you put a priority on the market value of your com
83. cial result Change in currencies Additional result Net income before tax ompanies income tax rate OPERATING INCOME 1 Equal to the item 20 in the operating income report INCOME FROM INVESTMENTS 2 These interests of financial investments correspond to the placement at last quarter end INTERESTS PAID ON LOANS 3 Interests paid on long term and short term loans of previous quarter NET FINANCIAL RESULT 4 2 3 CHANGE IN CURRENCIES 5 These profits or losses correspond to the net result change linked to the local currency value change against the currency of the country of the headquarters The variation comes from the revaluation of the financial assets and inventories of the foreign subsidiary For more details read the remark at end of this section ADDITIONAL RESULT 6 This value is calculated to balance the equity and the liabilities in balance sheet That corresponds to the correction linked to rounding of decimal values NET INCOME BEFORE TAX 7 D 4 5 6 TAX RATE S of taxes on company income TAX ON INCOME 9 Charged to the net income 6 at current tax rate and only in case of positive income There is no tax credit in case of loss NET INCOME AFTER TAX 10 6 7 74 1 Business Game User s Guide REMARK ON CURRENCY CHANGES e The inventory handled by the foreign subsidiary represents a value in the headquarters currency where the product is manufac
84. cisions and the resulting sales This model cannot pretend to represent the whole real business life It will have realistic reactions for the global market market shares and financial results of your company but it is obvious that any simulation model is more simple that reality Do not look for a truth known in the figures for each country They have only been chosen to represent different economic or political environments As in reality changes in these environments could occur You will be notified and will have to consider when planning your future decisions You might be tempted to thwart the model by taking extreme decisions implausible that you never would take in real life Know that the program checks the reasonableness of decisions and penalizes those extreme policies Moreover much of the educational interest of the game would also be affected You are reading this user s manual It will help you to personally learn what the company is that you are going to manage You will find all the rules governing the simulation Your are taking the management of a company that has an history You have some market shares and a financial position translated in the company reports The animator has given you access to reports and data file about the past to allow you to analyze your status The environment in which you work is uncertain You will survey economical ratio as GNP interest and tax rates currencies and market size To reduce th
85. cost overhead TOTAL STANDARD COST The difference between the standard cost of products destined for each market domestic or export is linked to additional tasks mainly packing and changes to fit local norms For the same reasons the American products cannot be exported to be sold in foreign countries If the simulation includes the use of the QUALITY module the real cost of raw materials will vary with the decided quality level for purchased items AQL the sampling policy for receiving inspection the scrapping level in manufacturing due to bad workmanship All those elements described in the section QUALITY MANAGEMENT can lead to variances Continuous efforts of R amp D to improve your product will also enable you to reduce the cost of manufacturing by optimizing the work time as well as the raw materials purchasing The effects of volume will appear in two manners modifying the manpower time per unit and on the unit cost of the purchased raw materials e According to produced total volume including all countries for example a company which invested and which thus produces more will see its unit cost price dropping On reverse way under use of the capacities would lead to an increase in these unit costs with a insufficient coverage of fixed costs e According to the volume launched for one country You could thus decide to concentrate the quarter production on only one single country even if it means to store these prod
86. credit balance it can move up or down For other credits the balance decreases gradually as the refund is made e Rate Rate applied to this quarter on the balance amount e Interests Interest paid during the quarter e Received This is the amount collected by the company during this quarter For a revolving credit facility where you can enter the amount you wish to receive more of what you used in the previous quarter For other credits only the amount received at the opening will appear The impact will be reflected in the balance e Reimbursed This is the amount reimbursed by the company during this quarter For the current quarter and beyond you can enter a new amount in three cases The revolving credit The repayment at TERM with prepayment with penalty Free reimbursement e Cash flow Combining what has been received and repaid 8 Credit approval When the credit line is still in status Requested the button Banker will allow him under his signature to grant or deny credit possibly applying a bonus malus on the rate Bankers signature Password Bonus Malus on rate Note that if a credit request has not been granted at the end of the quarter it may be deleted by the administrator of the game when processing the quarterly model with predictable consequences on treasury Signature Cancel Chapitre VI DECISIONS MAKING 111 9 Quality decisions Quality staff Required 25 el Quality in
87. dow in the game window or a j separated tab or in a pop up window The list of functions will Tools vary with the active game s phase and the current quarter 42 Quantitative az Return on Check decisions Strategy 3 Methods T investment Organization chart X Export data AB Print Documents On top of window you see a list of tasks planned to be h AR ED H a IF uni gt ww Newspaper m Your weis performed during this quarter Tasks could be a Parameters iy Schedule e Selection of objectives Help Strategy definition CIN Report to shareholders d User manual uy Guided tour Checking decisions uy Tutorial uy Online help Simulation ay FA Sending decisions Defining organization chart Chapitre VII USING THE PROGRAM 121 EPM CEPI Universe 1 Team2 Limit20 06 16 00 Juin 2013 Currentquartert2 Left 30 d 8h 29min The Game s status indicates e the current mode o PREPARATION before the start of the game session Read only mode o REAL MODE quarter in progress waiting decisions o DECISIONS LOCKED the game control processes your decisions New quarter data entry 1s disabled but you can access to reports e your universe and your team and its name e the current quarter e the date amp time limit for this quarter and a countdown OS aise A DECISIONS ge Quality Above the Decisions area you see buttons used for decision making When decisions ar
88. e currency of the country e Click the cell in the table corresponding to the selected type of reimbursement and the loan term If the rate displayed in the box is in this term is not accepted because your debt in the short term does not allow it If fixed the rate is based on the prime rate of this financial quarter in this country It will remain fixed throughout the loan If the rate is variable it will be calculated quarterly based on the prime rate of this quarter a fixed rate as a function of the loan duration The rate displayed is the current quarter value e Possibly adjust the credit period Without exceeding the expected duration in the column selected this allows you to adjust the duration This will happen if the banker wants to limit its risk Environment amp financial status e Current prime rate The prime rate set in the market report is the basis for variable rate and fixed rates offered at the conclusion of the loan e Long term debt ratio This is the long term debt the company reported Vs equity e Short term debt ratio This is the short term debt the company reported Vs equity Chapitre VI DECISIONS MAKING 109 Loan rate adjustments e Anticipated repayment allowed For credits with repayment at term you can use the check box The rate will be reduced but you will pay a penalty on the part repaid Credits reimbursement for revolving is free and credit remains available up to his end For loans to
89. e made and paid as well as audits planned for the next 4 quarters QUALITY PLAN CONTENT These are quality standards that you impose at your corporate group level There are lowest and highest levels of quality that your Quality decisions must respect Your Quality Plan should be chosen in line with your overall strategy RAW MATERIALS QUALITY e AQL MAXIMUM This is the highest level of material defects that can be delivered by your suppliers in e PURCHASING UNDER QA This is the lower level accepted for the of providers working in Quality Assurance e NUMBER OF YEARLY SUPPLIERS AUDIT Minimum number of annual audits at suppliers in QA MANUFACTURING QUALITY e OF PRODUCTION UNDER AUTOCONTROL This is the minimum level accepted for the of the components subject to autocontrol by the worker e MINIMUM RATIO TRAINING VS COMPENSATIONS This is the lower level accepted for the of time devoted to workers training e MINIMUM ATTENDANCE TO QUALITY CIRCLES This is the lower level accepted for the annual number of Quality Circles involving a worker FINAL QUALITY e MINIMUM SALES UNDER QUALITY ASSURANCE This is the lower level accepted for the of finished products undergo a final inspection before sale Chapitre VI DECISIONS MAKING 101 QUALITY PLAN ASSESSMENT When you select one of the elements of quality plan you will see the progress on the scale ranging from red to blue You will also see a level corresponding to the combination of the
90. e quarter 2 mixing all forms of remuneration and after influence of the inflation 2 Objectives weighting Let s consider a universe where NT teams are competing For each objective criterion you choose a WEIGHT that represents the priority you assign to your own strategy In a session where you aim to each X objectives this priority is in the range from Priority 1 Highest priority WEIGHT X Priority X Lowest priority WEIGHT 1 You can only assign the same priority once to a criterion For each criterion the model will compute the number of points attributed for your performance against your competitors 1 for the worst team NT for the best team NT being the number of team in competition The scratch score is based on the sum of points allocated for those X criteria The weighted score is based on the product of the scratch points by criterion multiplied by the priority you have selected This rule puts emphasis on success when reaching the main objectives and penalizes unplanned performance Example The session is organized for 5 companies The number of aimed objectives is 6 You have put as first priority Return on Equity by granting it a weight of 6 You are second on this criterion to which controls it the game has attributed a weight of 3 You obtain to the scratch classification of 4 points for your second place To the weighted classification you will obtain 4 x 3 x 6 72 points You choose therefore
91. e sales quantity you will have to pay the charges related to a larger customers service staff and to the replaced goods Indirectly you will also pay for a poor image in your customers opinion 34 l Business Game User s Guide under warranty x 40000 2 3 4 5 6 F 8 3 170 1 12 13 14 15 16 TF 6 Figures on Quality You use around 30 different suppliers for your raw materials The received lot size 1s 2000 units You need one material unit per unit of finished goods A Quality Circle group is on average 10 people A Quality Circle spends 10 hours per quarter to work You need 1 100 hour per unit to perform the auto control and the retouching time is 60 of normal manufacturing time Please read the Quality Report to follow the detected defects at several levels and to plan your Quality strategy The financial and commercial results will reflect the effects of your quality results on your company performance In the Quality Report the COQ Cost of Quality will point out the charges related to tasks decided to improve the quality and the CNQ Cost of Non Quality resulting from defects scraps and warranty You will have to balance COQ and CNQ to optimize the return of your actions Sum of COQ amp CNQ is TOC Total Quality Cost Quality staff Required 22 A Quality in procurement Suppliers audits Suppliers under QC 96 40 Number of audits eupplieurs QA AQL 36 2 2 H Confidence level Receiving inspection
92. e to a country you will select the country flag in the dropdown list You can open or close the list of decisions in a domain with the or button Advertising budget publicity on distribution 8 8 E publicity on image 12 12 12 2 publicity on product 80 80 80 Export back 0 0 0 ye epee Wibolexskera Wiola Wholeakes Wholecdes Clicking on the Graph icon will display a siad 20 20 20 20 the variation of this decision Sales force 0 0 0 S alesmen bonus 0 0 0 Sales plan 0 0 0 ish Marketing ab Marketing You can browse the quarters for quarter 2 up to the current quarter b EXD Research and development RAD on communication R amp D on product RAD on quality HB Manufacturing 122 I Business Game User s Guide REPORTS AREA EROS aa ms T TE Nt 08 You choose the report with the buttons or in drop down list The proposed list of reports 1s related to a location and a domain The country icon appears if the report is available for several countries The Print reports button open the report selection menu The button Database changes the display mode of this area The first time you click on a domain s button you get the list of available reports 1 e REPORTS Y Human Resources Decisions Social report Claims Age pyramid Indicator The button display the list of all available reports Then click on the selected report button to open it REPORTS
93. e uncertainty at the beginning of the Game or along all the quarters you will have access to computer tools They are based on several management techniques allowing you to analyze the past and to do forecast correlation or simulations You will get various reports in list form or graphics IT IS ESSENTIAL TO REALISE WITH YOUR TEAM THE ANALYSIS OF THE PAST From this analysis we suggest each team before the real Game starts to prepare the policy you will adopt to reach the objectives that you will priorities The list of open objectives can be adapted to each game s session Typically these objectives could be e market shares e growth of financial reserves e return on equity e earnings per share e stock market value of your company You will rank these objectives according to your own priorities 4 l Business Game User s Guide You will define your strategy and will have to adopt all along the Game a behavior aimed to reach these objectives that can be different than your competitors choice Some of the decisions will be submitted as in reality to negotiation and approval of Game organizers playing the role of banker or Securities amp Exchange Commission You will also manage your relations with the shareholders It could be requested to write a report to shareholders on a quarterly or on annual basis It will synthesize the company status and you hope and plans for the future You will also use the animators as con
94. eation phase Beyond these costs of administration of the distribution you will have also to support the expenses of distribution corresponding to the operation of the sales force Chapitre III THE SIMULATION S RULES 23 8 Efficiency amp cost of distribution networks You have the choice between three modes of distribution e The wholesalers who will sell your product but also products of competition e The exclusive agents which in the range of product which is your will sell exclusively your products e A privately owned network of which you control the costs corresponding to the number of salesmen of your sales force If you work with distributors of the type 1 or 2 you will have to give to them of distributor margin applied to the selling price of the product By increasing their margin you will increase their motivation but your costs of distribution will increase in a linear way With your own network 3 you decide number of salesmen Their effectiveness will vary with the volume of market which they will have to address therefore of their number but also of of bonus on wages that you will give them The monthly wages of the salesman are of 2500 in the USA 2250 in France and of 6000 Dirham in Morocco In the menu of decisions data entry you see appearing of bubbles of colour which vary from white to black with intermediate levels in yellow green and blue You see colour changing according to variat
95. ects of productivity and volume MATERIALS COSTS Vs VOLUMES MATERIALS COSTS Vs VOLUME Saving due to total volume Saving due to volume on country saving on purchasing costs Saving or overcost Standard materials cost Materials cost with AGL Final materials unit cost Materials are purchased each quarter based on volumes produced during the quarter SAVING DUE TO TOTAL MANUFACTURING VOLUME If positive that is the percentage of saving on materials costs thanks to total volume produced in quarter all countries combined If negative this is the to be added materials price due to weak volume SAVING DUE TO VOLUME ON COUNTRY If positive that is the percentage of saving on materials costs thanks to the volume produced for this single country If negative this is the to be added to materials prices due to weak volume SAVINGS ON PURCHASING COSTS Chapter IV THE GAME S REPORTS 91 This is the total of dollars saved or paid for materials costs compared to standard cost according to decided production volumes SAVING OR OVERCOST GLOBAL saving or over cost materials purchased thanks to volume STANDARD MATERIALES COST This is the contribution of material cost in the calculated standard cost for each country MATERIALS COST LINKED TO SELECTED QUALITY This is the unit cost of materials linked to the quality selected Quality Assurance level and AQL FINAL MATERIALS UNIT COSTS This is the
96. ed in United States produces the quantity needed for the domestic market and the foreign sales Those products although similar have to be adapted to the specific requirements of French or Moroccan market that can have different norms or local usage Therefore their costs therefore their prices can be slightly different These special products can be re imported in USA in case of excess inventory but the product for domestic market cannot be exported The product manufactured in a quarter for export will be available for sale on next quarter The same delay occurs when the products are re imported You work with one single product type as your competitors Nevertheless you can make your product more competitive increasing your Research amp Development effort and adapting your Quality policy which could be the basis of an ISO 9000 certification You will be able to act on the cost price of your products and thus on your margins while acting on your wage costs your purchases of raw materials and manufacturing volumes d Marketing information You can act on five parameters that will influence the global market and your market share e The sales price The advertising budget The Research amp Development The distribution network The product s quality The influence of those factors will vary obviously with the competitors decisions and economical environment Thus an increase in advertising effort for one c
97. eeeeeeeeeeeee nennen 24 FINANCIAL MANAGE MEN E a a 25 l no GANS i Emu 25 PEN ire he EDEN A 25 5 Longand medium tera IO AIS eii iaa 25 A IMI CNT OS TET Lr 2 3 Emancial UT BIST mmm 21 6 Paconcompdby SMC OTIS issernida i a d d 2 Le Companys SALTOS RU 28 Se DIMAS P 28 a A M 28 10 a A cT 28 OUALITY MANAGEMENT oerien OEE E E E EEEE eoe e e Tes Eoo eU eode 29 I Raw m terials quality PTT 29 2 AAA a e o uum 31 O A E 31 4 SO 9000 Certification optional ssseeseeeeeeeseeeeeeeeeeeeneen nnne mene nnne nnn nnn n nennen 3 SES AB AIM AREE a e re O Pr E A 33 6 Pigures IA E O A o ER O E II A 34 MANAGING HUMAN RESOURCES 25 5 150 sccssvesscescces socensts essa cess EOM NUS ber gees esM iua ES eu 0s 35 IE NO A A 35 P NEME Eoi Ms AUN POMO a oia 35 Chapitre II TABLE OF CONTENT 7 Ou OS 35 Ae Employment pole ias 35 IV THE GAME S REPORTES cnica 38 ls FAVALATBLERERORTS nada ai cortadas 38 2 IPRINTED REPORTS o o I IU EE 39 B MARKETING REDORTS ai ii 41 b Report on lt Narketino gt de cistonS aigen latencia ore Eni sa Salat Ea Onat 41 A RA CNLOMES ain teaiuisa cadeuiasianshiaiaouzuisauanshsassedevsadvansealdnuzvisasanshsasselavsadvaussialaniavisssaushsessedaviadeaned 42 de Markens INGICALOIS MT
98. efects from final check Customers claims USA Raw materials receiving inspection RAW MATERIALS DEFECTS MEASURED It is the o of defective raw materials detected in the materials submitted to receiving inspection by sampling Vs total volume SELECTED AQL This is the maximum of defects accepted in raw materials received from the suppliers 66 l Business Game User s Guide Autocontrol DEFECTS MEASURED of defects measured in products submitted to autocontrol The autocontrol is also applied to parts that have been retouched DEFECTS CORRECTED Within parts being detected as defective by autocontrol this is the of parts that have been corrected SCRAP AFTER AUTO CONTROL Scrapped parts if retouching failed or if retouching not decided Final Q Check amp warranty PRODUCTION CHECKED This is the of finished goods submitted to final Q check If the control is performed it is applied to all parts Products sold under Quality Assurance are obligatory submitted to this final control DETECTED DEFECTS This is the of defects measured in final Q check Beyond these defects detected amp scrapped some defects will remain in the finished goods that will be sold since a partial control has been done and because the test is not 100 reliable learning curve CUSTOMERS CLAIMS SALES Customers can obtain a replacement of your defective products under the policy of warranty The wrong products can be manufactured
99. ement and the interest are combined and paid at every month by quarter Reimbursement at the beginning is smaller and interest is higher Along partial reimbursement the interest will decrease in parallel with the balance due The loans rates are granted to the companies when the credit line is open They will be calculated according to several parameters e The prime rate in the market where the loan is granted as displayed in marketing report You select the country where you want to get the loan e The total debts ratio of this company short and long term loans combined Vs equity e Credit duration e Type of reimbursement General information Status Requested Duration months Current prime rate 8 Country USA Start quarter 12 Long term debt ratio 74 Quarter for Amount E lu 16 Shortterm debtratio 19 Loan mode and duration Reimbursment Variable rate 3 6 m 6 12 m 12 24 m 24 Revolving Yes 8 5 9 9 5 Repayment at term No 7 5 8 8 5 Free repayment No 8 9 Fixed payments No 7T 8 Changes on the rate Anticipated repayment allowed v Bonus on rate for capacity investment 0 gt Anticipated repayment penalty 2 Bonus malus granted by the banker 0 Mi y Loan s rate 8 5 scheduled payments Qtr Balance Rate Interests Received Reimbursed Cashflow 1800000 0 1800000 0 1800000 1800000 36000 0 0 1800000 36000 0 0 1800000 36000 0 0 0 0 360
100. ence level of sampling Probability to detect selected defect rate 10 4 00 Yes 0 96 95 63 64 l Business Game User s Guide OF SUPPLIERS UNDER QUALITY ASSURANCE The percentage of suppliers under Quality Assurance defines the percentage of raw materials purchased under Quality Assurance The AQ level insures a better regularity of the selected quality level A raw material under AQ is more expensive NUMBER OF ANNUAL AUDITS SUPPLIER It is the number of annual audits for each vendor under AQ These audits are mandatory to insure that the Quality Assurance agreement with your supplier is correctly respected REQUESTED QUALITY LEVEL AQL This is the maximum of defects accepted in raw materials received from the suppliers RECEIVING INSPECTION ACTIVE YES or NO if you use or not a receiving inspection by sampling LOT SIZE OF RAW MATERIALS Size of the raw material batch received from your supplier This quantity is imposed 2000 units SIZE OF SAMPLES That is the number of parts taken as sample for receiving inspection The receiving inspection is destructive SELECTED CONFIDENCE LEVEL It is the number of defective parts found at receiving inspection in the sample and from which the whole raw material lot will be rejected PROBABILITY TO DETECT SELECTED DEFECT RATE According to you sampling decisions this is the probability calculated with Poisson law to detect the defects corresponding to the selected AQL
101. ent which sets out the playing rules explains the reports details the handling of different programs describes the organization of the session explains the error messages Chapitre IX SESSION S ORGANIZATION 161 You can review if you have any doubt by accessing it through an index For preparation it is not necessary to read everything you have to read the introduction and chapter III which describe the rules of the simulation You have to understand the articulation of the reports described in Chapter IV to know what your accounting structure is and to exploit the reports you receive today It is also necessary to understand how to define your objectives and your strategy For the rest know what tools are available without really learn to use them and you will see that the manipulation of the program is simple and intuitive and you have a HELP online when in doubt C Using the game in preparation mode JV Questionnaire tn EPM CEPI Universe 1 Team 1 Limit 19 06 00 00 EJ Way EPM cpr Juin 2013 PREPARATION Left 28 d 12h 45min EOS diate sg sorgere sT Before the game session you will access the website of the game in the Preparation mode Early in the game session you will switch to Real mode Mode preparation is intended to e You discover the business you run and the markets in which it operates You will have a three year history Familiarize yourself with the simulation software and
102. ent age during next quarter POSSIBLE EARLY RETIREMENTS Number of people who will be between 55 and 60 during next quarter and therefore who would be candidates for early retirement Chapter IV THE GAME S REPORTS 55 SOCIAL CLIMATE SOCIAL CLIMATE people unionized 10 00 Number of personnel claims 1 Days of strike 0 Number of strikers 0 Man days lost on strike 0 Personnel turnover 0 00 Absenteeism 2 59 Purchasing power 2 29 PEOPLE UNIONIZED of workers affiliated to Unions These people could follow the Union recommendations in case of social conflict NUMBER OF PERSONNEL CLAIMS See CLAIM REPORT DAYS OF STRIKE Number of working days with a production stop due to strike NUMBER OF STRIKERS Number of people in manufacturing following the strike MAN DAYS LOST ON STRIKE Number of labor man days lost for manufacturing due to strikes PERSONNEL TURNOVER of personnel having resigned in last quarter This value is translated in a yearly ratio Resignations are influenced by social climate in the company its economical and social positions and also the status of labor market competitors situation salaries hiring ABSENTEEISM of manufacturing people absent during the quarter Manpower capacity is reduced accordingly and cannot be compensated by overtime PURCHASING POWER Starting from quarter 2 this ratio measures all variations of net income of company s workers against inflation rate A
103. er of your strategy you will analyze the position of competitors On this basis you prepare your plan and adapt the decisions of the quarter You submit these decisions to a simulation and can evaluate various scenarios If the scenario predicts an increase of one of your lines of credit or a variation of your capital you should request the intervention of banker Do it early and thoroughly prepare the case for its approval All non approved requests credit line will be rejected and your cash will suffer Once your decisions are ready you validate them and send them to the control of the game All this in a limited time will be announced on the main menu of the game Be aware that the game speeds up a quarter to the next Chapitre IX SESSION S ORGANIZATION 163 E The role of the animators The Game administrator has several roles e He uses the Universe workstation from which the simulation control is performed He distributes the results and Financial News e He will assist you with his advices o using the program market information rules of the game quantitative methods principle of ISO 9000 strategy definition OO OOOO This information is free of charge The Game administrator will push you to discover by yourself the major part of the answers He will refuse to answer to a question which would give you an abnormal advantage on competitors Some question will lead him to give the same information to all teams He wil
104. erest Taxes amp Amortization Cumulated operating income for headquarter and subsidiaries plus amortization STOCK MARKET SHARE VALUE Value of share on stock market MARKET VALUE OF THE COMPANY Market value share value x number of shares NET VALUE OF THE COMPANY Book value of company Liabilities Debts GOODWILL Difference between market value and book value of the company Price Earning Ratio PER Share value divided by earnings per share This is a way to evaluate the potential of profitability when purchasing a share INCOME RETAINED 82 l Business Game User s Guide From balance sheet That correspond to the equity increase without bringing external money therefore an increase or decrease of net value of company and the capability of autofinancing of investments TOTAL DEBT RATE Total of debts LT and ST Vs Total Equity LONG TERM DEBT RATE Long term debts consolidated Vs Total Equity SHORT TERM DEBT RATE Short term debts consolidated Vs Total Equity YOU CAN SHOW GRAPHICS FOR ALL VALUES OF THESE REPORTS By moving the mouse over the values shown when a chart is available the label or value color changes By clicking you will see a chart of evolution by quarter and the corresponding graph Chapter IV THE GAME S REPORTS 83 G COMMON REPORTS 1 Corporate results published Corporate report n E RESULTS PUBLISHED BY HEADQUARTERS A V WIN TEAM IN Peertech Inc Summer
105. ertising budget publicity on distribution 5 publicity on image publicity on product Distribution type Sales force Salesmen bonus usi Marketing 8h Marketing a R amp D Research and development RAD on communication R amp D on product R amp D on quality P Manufacturing F 136 l Business Game User s Guide B Financial News Displays or prints the Financial News for the quarters where it is available The Financial News will give you useful elements of economic conditions or events that will impact the simulation To select a quarterly News click the number corresponding quarter in the dropdown list at the top right of the page Che Financial News WELCOME TO THE i BUSINESS GAME cu aa lar m s aos Curmecy F3 LEA Hin BT 10 ET 2 ors LO The Donar narra mom rro ap rom eee cn Da A ae Gare cra y Grad Ue mni une by mavens Qumran EOE univernitien mn compari in Damm in ranca ee E E T m LO un in foraign countries ooo MO LOA 113 FECI Ts jr uz Ram an arch Chee lea from tha original modal Pair OU EI ha ban pez al Har ara ara Ey berai mih bota nues tara eck ee Fae hie keg om hh eva ot GDP incarmcirob with tha pogra The Gumi Gera mom rerom on marian production finance Par anc quel TEGETE ares bo oacacipa yur Saco mi Ha Zornarr Gare m cea wing La Boo compr capa bo hag ha deion pocarr anc bo mbrebes the Gye pes imn om ee TTT Tou mra paying mao c hee ci Gare
106. es It seems possible to maintain this productivity level without difficulty for machine being less than two years old Beyond this age the maintenance charges increase and then you will need more manpower to achieve the same production level The investments to increase capacity will obviously influence the average age of the machines It is also possible to maintain the productivity by refurbishing partly or totally the machine shop The cost is 1 Dollar by refurbished unit capacity In the production report you will find the information needed to manage the productivity e Average age of machines e productivity ratio 1 corresponds to a better productivity e Number of hours per unit produced for each market The cost variance resulting from a productivity decrease will appear in the operating results in the account VARIANCE ON SHOP OVERHEAD The refurbishing expenses have no effect on fixed assets net value The following graph shows the evaluation of productivity decline Vs average machines age i e for an age of 4 10 years you will need 10 additional manpower for the same production volume Productivity Vs machines age 1 2 1 15 1 1 Ratio 1 05 2 24 28 32 36 4 44 48 5 2 Years T Machine capacity At the simulation beginning your available manufacturing capacity is 600000 units This capacity can be partly or totally loaded for the production of each quarter The production could al
107. es turnover 87 sample lot size 29 sampling 20 29 113 scrap 18 29 scrapping 15 scraps 66 season 11 seasonal adjustment 144 seasonal variation 144 seasonality 146 Selection menu 120 seniority 14 shares 70 shipment 22 shop variance 15 short term loans 27 79 simulation 18 97 social charges 35 social environment 35 spreadsheet 16 standard cost 18 19 20 21 stock exchange 28 strategy 3 4 12 28 32 34 35 93 95 99 100 133 149 153 154 160 161 162 163 strike 18 35 59 strikes 36 tax 28 Team master account 126 TQC 34 67 training 31 35 transfer money 25 treasury 27 75 Treasury 78 172 vacation 35 variance 71 variances 20 21 volume 19 21 50 i Business Game User s Guide warranty 33 work in process 18 working hours 115 working time 14 INDEX 173 BG Consult 78450 CHAVENAY France support i businessgame com
108. es will have an impact on your net margins and it will thus be necessary that they are in coherence with your pricing policy volumes and the positioning of your product The effectiveness of the networks will follow a learning curve An effort of communication targeted on the distribution will make it possible to accelerate the improvement of the effectiveness of the network Potentially the effectiveness of the exclusive agents and the privately owned network is higher than the effectiveness of the wholesalers But that will also depend on the efforts of publicity the granted margins the size of sales force and the bonuses granted to the salesmen By changing network initially you will undoubtedly lose certain effectiveness and certain faithful customers could pass to competition But of the constant efforts will allow you to return to an equivalent effectiveness then to exceed it When you modify your distribution network you have to support initial charges the highest one corresponding to the creation of your own network Whatever is the new type of distribution you must jointly invest in advertising If not adequate your distribution network change would be inefficient 4 Manufacturing At each quarter you decide the parameters that will define the product quantity available for sales for short and medium terms but also your inventories and work in process Those factors are The production capacity The manufactured quan
109. f the whole received lot Accepting the use of defective parts in production will lead to scrap in manufacturing process scrap at final acceptance and will finally lead to defects in finished goods when the filters are insufficient to avoid defects and therefore clients claims and replacement of defective goods under the warranty clause That will also affect your market share 30 1 Business Game User s Guide Raw materials defects MATERIALS Selected AQL Scrap at receiving Remaining raw materials defects Retouching Machines Scrap in production Vendors under QA Suppliers audits Receiving inspection MANUFACTURING Autocontrol Training Quality circles Experience Remaining Mfg defects FINAL Q CHECK Scrap at final Defects in finished goods SALES Replaced Customers claims Warranty service defective good Chapitre III THE SIMULATION S RULES 31 2 Quality in manufacturing It will be obviously influenced by your R amp D effort which will improve the product but also the manufacturing process where the search for quality is embedded in the design process The expertise of your personnel their motivation and your training effort will also influence quality Quality in manufacturing Quality circles 0 Autocontrol level 36 o 30 E Training budget 1 Retouching A You can act directly or indirectly on the quality resulting from your manufacturing process
110. factors e Manufacturing and purchase volumes Salaries and more generally real expenses related to manpower Working time R amp D effects Quality policies and more specifically the scrapping Evolution of raw materials prices 22 1 Business Game User s Guide 4 Capacity investments costs To increase the production volume you must increase the machine capacity Overtime or machine maintenance can only influence the manpower needed to produce but in any case the production is limited to the machine capacity To increase the capacity you will pay 30 per additional unit Each investment project will also cost you a fixed fee of 100 000 corresponding to engineering and project overhead This fixed fee is independent of the size of Capacity increase The variable unit investment cost 30 is accounted in the value of the fixed asset and will be depreciated The fixed fee 100 000 is accounted as MISCELLANEOUS EXPENSES in the quarter of the investment and will affect immediately the operating result The depreciation charge is 10 per year The maintenance expenses have no influence on depreciation YOU CAN USE THE DISCOUNTED CASH FLOW MODEL TO EVALUATE THE RETURN ON INVESTMENT FOR YOU PROJECT see chapter VII 5 Warehousing costs They are evaluated on basis of inventories at the end of the quarter As explained other where they can vary quickly over a certain threshold 6 Shipments import fees The shipment expen
111. ffects of persistent or delayed these variables on the dependent variable The program calculates and displays the correlation coefficients and if the matrix is not singular realized the matrix inversion then will calculate the coefficients of the linear equation results of multiple regression So you get the mean standard deviation and correlation coefficients between dependent and independent variables and the term independent of the equation Chapitre VII USING THE PROGRAM 149 H Return on investments As the game progresses you will be asked to consider Tools investing depending on your strategy translated in your a Quantitative Return on plans EI Methods investment Generally to finance these investments you will have to H Export data Print consider borrowing or capital increase You will have to A E present your request to the banker who will ask you for a 1 business case justifying the loan Of course you will have to present your sales forecasts and the corresponding production plans but you will also evaluate the investment plan best suited to the financial point of view e is it better to invest once in a significant capacity increase but then some of this capacity could be underutilized waiting for additional sales which would saturate e oris it better to capacity increases in several slices gradually according to sales growth but in this case each time undergoing the fixed cost inves
112. hing coefficient This is a simple smoothing which you can choose the coefficient You will get results of the smoothed series The time series analyzed and the resulting series model are displayed on the same graph You can limit the range of the quarters of the analyzed series The calculation is the prediction values of this variable for quarters until the past quarter The exponential smoothing method is simple you start with an old value and you see a new value to calculate a smoothed by applying a smoothing coefficient X Smoothed value old value smoothing coefficient X new value old value Open the menu TOOLS QUANTITATIVE METHODS Select the location and domain of the variable to be analyzed Double click the variable in the list Select the method exponential smoothing Select the range of quarters of the analyzed series Optionally change the smoothing factor between 0 and 1 The blue bar chart represents the analyzed series The smoothed variation is in purple 148 l Business Game User s Guide 5 CORRELATION Quantitative Methods Method Correlation Fromquarter j2 H To n E Global market USA 1690900 1602863 2385300 1957943 2238800 2088640 2026600 2180777 2178900 2297767 2913800 2630379 i 2413700 2592695 3 Finance 3000000 A f France 2000000 2281700 2705553 2571100 2644184 Headquarter uve Ss Marketing P Finance Average sales price Country s share in turnover Country s sh
113. ication TO CANCEL THE ISO 9000 CERTIFICATION PROCESS Use the button Cancel ISO ISO 9000 CONDITIONS AL i i c i 150 conditions ISO Plan approved Plan respected Measured defects 4 2 gt 3 5 Q Preparation delay e You must comply with four conditions to obtain the ISO 9000 Certification The preparation period of six months must have elapsed since the quarter where you start the ISO The Quality Plan was signed by the ISO auditor Quality decisions meet ALL the thresholds defined in your Quality Plan The manufacture of the previous quarter generated defects exceeding an acceptable threshold 3 5 which is still quite high ISO STATUS The ISO process includes several steps e SO not decided ISO in progress must be 6 months before undergoing the first audit ISO delayed ISO Certification Audit ISO refused audit has detected that a condition was not met ISO Accepted Audit Certification or Recertification was successful ISO Lost at least one condition is breached 100 l Business Game User s Guide e ISO Cancelled you stopped the ISO 9000 process To get the approval of the Quality Plan after having introduced you are requesting approval It will be granted or not by the Auditor ISO Certification audits plan Audits planifigss H1 12 Pas dal 13 Pas d audit 14 Certification 15 Certification 16 Certification 17 Pas d audit 18 Pas d audit You know the ISO audits that you hav
114. ies This manual includes examples based on a standard scenario It is possible and even probable that the Game animator proposes a different scenario The values displayed in this brochure will then be different Furthermore some modules as QUALITY or PERSONNEL are optional It is possible that you will not use it The Game organizer will inform you and will give you on the Web site the real figures of the scenario you will follow In this manual The elements which are susceptible to vary from the standard scenario are shown in brackets as USA The optional elements are identified with Chapitre II THE SIMULATION S RULES 11 Ill THE SIMULATION S RULES A SELLING amp PRODUCING 1 The Market p S You are working on two markets USA and FRANCE On the domestic market the US market you have all your production facilities The currency is the dollar On foreign markets FRANCE and MOROCCO your activities are limited to sales The currencies are euro and dirham You are not currently working on the Moroccan market You can enter into it during the Game according to your objectives It is a new action ground with a high GNP growth where the first competitors entering to the market can have significant results You can also decide to leave a market but it would be very expensive to come back You have valuable information in the Marketing report for each quarter that you will analyze carefully
115. igher when the AQL will be low Quality in procurement Suppliers under QA 96 0 Number of audits AQL 96 8 Confidence level Size of control sample E Receiving inspection Level of raw defects 1 2 Jb 470 6 Dh 10 12 Probability of detection 0 0 0 1 05 34 11 175 236 39 4 If you select a specific AQL level you can secure the regularity of supplies quality through a QUALITY ASSURANCE policy with your supplier It must be joined width a strong preliminary qualification from the supplier and must be validated periodically through QUALITY AUDITS Quality Assurance will guarantee a better respect of requested quality level Whatever 1s the selected AQL some defective parts will still be delivered You can decide to set up a RECEIVING INSPECTION with a sampling procedure This is a destructive control You will have to decide the sample lot size the size of the received materials order is imposed 2000 units A high sample quantity will lead to a higher reliability of the inspection but will cost a lot due to scrapped materials in control Sixteen is considered to be the minimum sample size and that the lot size must be at least 10 times that of the sample A too small lot size would be statistically unacceptable The used sampling method explained in chapter VI is based on the Poisson method You will select the requested confidence level which is the amount of defects detected in a sample leading to rejection o
116. ill receive the answer or another message from the control o If the Messenger window is open the message is immediately displayed o Ifthe Messenger window is closed you are warned by the red frame displayed on the Messenger button Open it to see the message e Received messages are displayed on the left side of the menu 132 l Business Game User s Guide 8 Identification amp organization chart ame Company name Logo a Y Team members A a Company s name amp logo Name and logo Organization chart Company name Logo SU In 12 quarter you can view and edit your Company name that is the name of your group and the organization of your team After treatment of 12 quarter data will be frozen but you can ask the control of the game to change them Enter the new name and logo They will be save when you close this window By clicking on Edit button you can update the logo of your business by choosing a new one from the catalogue amp clicking on the icon selected Chapitre VII USING THE PROGRAM 133 b Team members Documents uy Newspaper uy Your universe ay Parameters ay Schedule The list of your teammates and of members of all teams is recorded by the game s control with or without their pictures You can display them selecting Your universe in the main menu If a picture is missing ask to your teammate to record his picture when he connects
117. in past quarters and have been kept in stock This does not necessarily represent the total of bad sales because customers do not require replacement of all the bad parts 3 Cost of quality QUALITY COSTS CHQ COSTS ON NON QUALITY Manpower for retouching Cost of scrapping Retest after retouching Customers service Cost of warranty Total non quality cost COQ COSTS OF QUALITY Cost of raw materials scrapped Cost of autocontrol Cost of Quality Circles Cost of quality department Total COQ Total quality Cost Cost of non quality CNQ MANPOWER FOR RETOUCHING Cost of personnel dedicated to retouching after Auto control Chapter IV THE GAME S REPORTS 67 SCRAPPING OF FINISHED GOODS Value at standard cost of parts scrapped after final Q check RETEST AFTER RETOUCHING Cost of production hours spent to test again the products after retouching AFTER SALES SERVICE Cost of administration of sales related to the processing of customers claims and warranty processing excluding replaced goods COST OF WARRANTY Value at standard cost of goods replaced after customers claims for defective goods TOTAL CNQ Total cost of Non Quality This is the sum of the five items above This represents only the measured costs Some indirect penalties as loss of market share are not easily accounted These costs are related to weaknesses in your procurement policy in your manufacturing process and final acceptance Probably
118. ion e Of the distributor margin for the wholesalers or exclusive agents e Among sellers and among their sales bonus for privately owned network If white or yellow levels are probably low purple or black levels are undoubtedly abnormally high Expenses corresponding to these levels can be estimated in the simulation of results W Network efficiency Xx 1 34 1 128 1 28 1 24 UN 3 4 5 B Y B8 g 10 11 2 mu 24 1 Business Game User s Guide Summary of costs may vary with the session s scenario PRODUCTS FOR US MARKET 1 00 4 50 PRODUCTS FOR FRENCH MARKET PRODUCTS FOR MOROCCAN MARKET MANPOWER COST 9 00 hour 13 5 hour 4320 man 500 man 2000 man MACHINE CAPACITY 30 additional unit machine refurbishing COST IN A PRIVATE DISTRIBUTION NETWORK Basis salary for salesman in USA 2500 Basis salary for salesman in France 2250 Basis salary for salesman in Morocco 6000 D WAREHOUSING 10 of standard cost year Cost of ISO 9000 recertification audit Chapitre III THE SIMULATION S RULES 25 C FINANCIAL MANAGEMENT 1 Money transfers You can move money from a foreign subsidiary to USA or back from USA but you cannot transfer money directly between France and Morocco There is up to now no money transfer limitation In the decision set up menu you select the destination of transfer you will key in the amount of
119. is created in Requested status When signed by the banker the status will be switched to Granted A credit remaining in requested status and not approved will be discarded at quarterly processing of decisions When the finance module is active and when the type of credit allows you to do it you decide quarter by quarter the level of loan you use on each credit line This is a way to optimize the credit cost according to the granted rates If the finance module is inactive the credit amount is negotiated globally If your capacity of running into debts is increasing the proposed rates for new credit will take you results into account Then you can use this leverage effect as an element of your financing policy to improve your competitive position In ALL cases the value entered in credit and loans represent the TOTAL used and not the quarterly variation ALL FINANCIAL CHARGES LINKED TO SHORT TERM AND LONG TERM LOANS ARE DUE IN THE QUARTER FOLLOWING THE QUARTER WHERE THE LOAN HAS BEEN USED Except for reimbursement with a constant monthly fee 4 Short term loans You will have to control your treasury level A high treasury level is a high amount of sleeping money If the treasury is insufficient the model will compute automatically the amount of short term loans needed to avoid having a negative treasury These short term loans will lead to financial charges well above the regular loans and paid in the ne
120. is for ranking of the game The facilitator may request that the classification is based e The value of the last quarter played e On the average of the last four quarter e On the average for the quarter 12 that is to say since the opening of the game It is possible that the animator sets a different weight for each criterion This weight combined with the priority chosen by you on each goal will be used to award points The sum of points will be used to establish the ranking of the game The following list gives the definition of possible objectives You check in the menu Objectives the list which is applied to your session 9 l Business Game User s Guide NO amp Objective Definition ____________________ It 1s the sum of earnings after tax of the headquarters and affiliates corrected of the currency s value for the last four quarters divided by the current number of shares It is the sum of earnings after tax in the three countries Return on equity during of 4 last quarters divided by the equity such that 1t was during these quarters It 1s the product of the number of released shares by the Market value of the company G value of this share in stock market Unit value of the share in stock market at the end of the quarter Sum of net benefits after taxes in the three countries Profit on sales G divided by the turnover with the influence of currencies of the quarter It is the global mar
121. it sharing distributed in the quarter in US BONUS Total cost of distributed bonus in this quarter in US This budget is only distributed in case of positive net income in last quarter SOCIAL EXPENSES Cost of social expenses in the quarter in US COST OF EARLY RETIREMENT Cost of early retirement bonus in the quarter in US COST OF HIRING PEOPLE Expenses in quarter to hire personnel This amount includes all personnel hiring including Quality Staff people in USS COST OF DEPARTURES INCENTIVES Cost of incentives paid to encourage resignation to avoid layoff in money 1 COST OF LAYOFF Cost of real layoff in the quarter in US TOTAL COMPENSATIONS Total cost of all personnel related expenses in US 3 Personnel claims d Human Resources HUMAN RESOURCES CLAIMS PERSONNEL SATISFACTION Number of claims A strike notice has been presented Number of strike days Number of strikers Man days lost on strike people unionized Global satisfaction Satisfaction on salary Satisfaction on job security Satisfaction on working conditions PERSONNEL CLAIMS Personnel is astonished by low shop workload Company results are worrying Personnel claims for a labour week hours decrease Chapter IV THE GAME S REPORTS 99 PERSONNEL REACTIONS NUMBER OF CLAIMS Number of personnel claims presented in this quarter The personnel can react to a permanent situation or to a pot situation He can disapprove the
122. ket share sum of the three countries Total ket sh IM Total marketshare M in the quarter Oualivilucesdho Im Ratio expressing the quality in connection with the y price of products sold during this quarter It is the sum of difference in absolute value in the three Accuracy of sales forecast countries between estimates of the plan of sales of the quarter and values realized residual client fidelity after the influence of the Customers fidelity evolution of prices the quality and the ratio quality price Indication of performance of a team against its Competitive ratio competitors used to share the market not assigned to faithful clients 11 Share of sales realized to the export Earnings per share 10 It 1s the sum since the quarter 2 of decrease of bad personnel while in the same period of at least Continuity in manpower e nd l 12 E UE equivalent hiring have been realized This penalizes the enterprises that hire after layoffs or that lay off after hiring It is the difference between the complete real expenses 13 Variances and the standard cost Total quantity of stocks at the end of the quarter Q 1 5 Hourslost P Hours of manpower lost by lack of production 16 Usage rate of the machines produced quantities Vs the capacity of machines available for the production It is the evolution of the position retained income since the second quarter until the last played quarter
123. l Business Game Business simulation USER S GUIDE 2 l Business Game User s Guide l Business Game User s Guide Business simulation Version 1 i BUSINESS GAME Copyright c BG CONSULT English version Fourth edition August 2014 This manual corresponds to the version 1 c of l Business Game The 1 Business Game is the property of the authors Patrick HERMESSE amp G rald HERMESSE and their beneficiaries It can be played through a licensing agreement between the user of programs and BG Consult Game programs and manuals may not be copied for any purpose other than backup To contact the game s author E mail support i businessgame com Chapitre Introduction to Business Game l INTRODUCTION TO 7 BUSINESS GAME You are going to play a BUSINESS GAME For several quarters you will be at the head of an industrial society faced with fluctuations in several markets and facing competition You will select your objectives you will define your strategy aiming to reach them Then you will translate the strategy into operational decisions For each Game quarter you will make decisions on COMMERCIAL FINANCIAL and PRODUCTION matters You will also manage the QUALITY and the PERSONNEL policies The computer uses a model that simulates the reactions of markets reacts to the balance between competitors and all the financial social technical and stock market consequences of your de
124. l also be a banker or SEC You will present him your financial needs He will judge the validity of your plans and will decide to help you or not to take the risk He will push you to work as a real team to understand before deciding to open your imagination He will try to avoid you to make technical errors which would abnormally influence the Game results 164 i Business Game User s Guide IX ERROR MESSAGES E001 THE STOCK MARKET CANNOT ABSORB THESE SHARES You try to increase your common stock over the limit that the market can accept for this current quarter Please call the SEC representative for additional details E002 INVENTORY DOES NOT COVER THE MOVED QUANTITY You try to re import a quantity from a foreign country but this quantity is not available E003 VALUE S OUTSIDE LIMITS A typed value is outside the accepted range The limit can be defined by the game rules the scenario or by a likelihood test Please correct E004 PRICE INCREASE EXCEEDS ALLOWED LEVEL Your new sales price exceeds the limit of regulations The limit s value is displayed in error window E005 PURCHASED BACK SHARES EXCEED ALLOWED QUANTITY You can only buy your own common stock shares in the limit defined by market constraints and SEC recommendations that you have negotiated E006 MONEY MOVES ARE FORBIDDEN The money transfers are controlled Please limit the decided amount at displayed value E007 EXPORT EXCEED IMPOSED LIMITATION You try to
125. ll salary elements are taken into account as salary bonus and profit sharing minus taxes on salaries 56 l Business Game User s Guide SOCIAL amp ECONOMICAL ENVIRONMENT ENVIRONMENT Quarterly inflation 0 30 Prices index 106 40 Tax on personnel income 14 00 Average income 14966 5 Average salary 0 07 Average turnover 0 00 Average labour week 38 00 h Awerage vacations weeks 400 Unit cost hiring 3000 3 Unit cost layoff 500 QUARTERLY INFLATION Inflation rate for the quarter in in the country of headquarters PRICES INDEX Index of retail prices Index of quarter two is 100 TAX ON PERSONNEL INCOME Average rate of taxes on personnel income in 96 AVERAGE INCOME In US the average value of total salary income for all personnel in your industry AVERAGE SALARY In US the average value of basic salary AVERAGE TURNOVER Average resignation rate in your industry The resignation of your personnel can be a consequence of your own social policies or of your company s health The global status of the industry will also influence the turnover For personnel also you are in competition AVERAGE LABOUR WEEK Average work week in your industry AVERAGE VACATIONS weeks Average number of yearly vacation weeks in your industry UNIT HIRING COST Average unit cost to hire one worker in US UNIT LAYOFF COST Average unit cost to dismiss one worker in US Chapter IV THE GAME S REPORTS COMPENSATIONS INCOME Ba
126. long quarters or with legal regulations For the time being a quarterly 10 change in manpower level seems to be possible The changes in working time will also obviously influence the manpower capacity If you hire people the new personnel are immediately available for production in the current quarter The productivity will vary with the pyramid of ages and the seniority with the disengagement consecutive to your social policy and with the labor market conditions The estimated unit times by product for each country are e USPRODUCT 0 5 hour unit e FRENCH PRODUCT 0 6 hour unit e MOROCCAN PRODUCT 0 7 hour unit These standard times will change e g with the volumes produced for each country the productivity related to the age of the machine the experience and the staff training like his motivation Efforts of Research and Development will also make it possible to improve the costs of manufacturing of the product both for the unit times of production but also on the raw materials involved Despite the use of overtime if your production plan exceeds the available capacity the simulation model will automatically reduce the decided quantities to the possible level All the figures presented correspond to the figures of quarter 12 They can vary during the simulation Chapitre II THE SIMULATION S RULES 15 6 Productivity These unit values are based on a normal productivity in a shop equipped with recent machin
127. money to be transferred in LOCAL CURRENCY of the country sending it That could correspond to money transfer to finance an investment in the distribution network or to take advantage of interesting capital investment rates ines of credits PEO eee ee SEC Wi Granted Revolving 8000000 10 00 W Hide closed credits Request a loan Delete During the transfer the amount is immediately translated in the currency of the destination country using the current currency rate 2 Financing the company At the time when you take over the company management your balance sheet will show a capital and retained income but you will also have debts long term or short term Most likely you will need additional resources to finance your plans Financing will have two sources e Capital increase e Long term loans In both cases you could be pushed to justify your request for credits or shares release either to the banker either to the Security Exchange Commission 3 Long and medium term loans e Ifthe Finance module is not active long term credit are revolving You can at each quarter execute all the moves reimbursement or money calls while the total net result of the move remains inside the allowed amount Then no negotiation is needed since you stay inside this credit allowance 26 l Business Game User s Guide The loan rate identical for all teams is variable equal to the prime rate in the quarter in the co
128. mp ADMINISTRATION COST 8 Expenses of customer service including claims processing and warranty processing This amount also includes the cost related to distribution network opening or change MARGIN GRANTED TO DISTRIBUTOR 9 To wholesalers or exclusive agents NETWORK OPERATING COST 10 Cost of privately owned network INVENTORY COSTS 11 All cost related to handling of goods in inventory as warehouses insurance MISCELLANEOUS EXPENSES 12 Includes fixed cost for each capacity investment project charges on share purchases or sales machine refurbishing costs ISO 9000 audits CAPITAL EXPENDITURES H 13 Cost of quarter investments related to capacity increase TAX PAID 14 Amount paid equal to tax on last quarter income DIVIDEND PAID 15 Dividend decided in last quarter MONEY EXPORT 16 Chapter IV THE GAME S REPORTS 17 Money sent from this country to headquarters or from headquarters to subsidiary INTERESTS ON LOANS 17 Interests paid on last quarter debts both for long term loans and short term credit to cover treasury requirements FINANCIAL INVESTMENTS 18 Increase of money placed as financial investment REFUNDING ON LONG TERM LOAN 19 Decrease of long term loans REFUNDING ON SHORT TERM LOANS 20 This eventual change is related to the final value of the treasury at quarter end If the treasury would have been negative on last quarters a short term credit was automatically open to cove
129. n m Check decisions Chapitre VI DECISIONS MAKING 97 After correction the value will be displayed again on light gray background and these decisions are in status VERIFIED DECISIONS GS e utem d E 3 In the button bar of decision making you will see a red exclamation point indicating that an error exists in this domain DECISIONS DATA ENTRY IN RESULTS SIMULATION MODE To perform a simulation of results you choose from the tool menu f a Check decisions mulation Simulation In the window Reports a watermark SIMULATION will appears You modify the decisions you want to submit the simulation calculation Do not forget to enter your Sales plan You correct any errors detected by Check decisions IF THERE REMAINS ERROR THE SIMULATION CALCULATION WILL BE REFUSED To launch the calculation use the button Simulation If the calculation succeeds you receive the following message and you can consult the various reports on which you will see the watermark SIMULATION You can then further modify one or more decisions and start a new calculation simulation complete OK Value of sales Cost of goods sold Gross margin Variance on production cost Cost of overtime Cost of lost hours Hiring or layoff cost Loss on reimported products Total overhead costs u S va e mC Operating expenses Total charges Operating result Column J V Show data Y Zero S
130. networks you see the number of salesmen and of bonus on wages which are granted to them 2 Sales amp inventories Th Sales inventory SALES INVENTORY QUANTITY 126499 QUARTER S CHANGES Inventory at quarters beginning Entries of finished goods 451639 Quarters sales 552847 Quantity served under warranty 25291 Goods exported back to factory Inventory at quarters end 0 AVAILABLE FOR NEXT QUARTER Work in process Quantity reserved for warranty 10665 Goods imported back 0 QUANTITY 457483 Available for sales 446626 05 VALUE 3179576 3105454 All amounts in this report are valued at standard cost effective during the quarter For foreign countries the standard cost is adjusted by the current currency rate INVENTORY IN THE BEGINNING OF QUARTER 1 This 1s the residue of unsold products in the previous quarter ENTRIES OF FINISHED GOODS 2 This is the quantity produced and exported in the previous quarter The sum of INVENTORY AT QUARTER S BEGINNING and these ENTRIES OF FINISHED GOODS less the amount reserved for warranty service represents the amount that was available for sale in the quarter shown except when you have re imported products QUARTER S SALES 3 Quantity sold in that market QUANTITY SERVED UNDER WARRANTY 4 Amount returned to the client under the warranty policy This quantity corresponds to the position 8 of the previous quarter but limited to quanti
131. nfluence of volumes etc It should come as no surprise that the production can be automatically bound when computing simulation or while processing the model quarterly 106 l Business Game User s Guide 6 Financial decisions Hide closed credits Request a loan Delete e FINANCIAL INVESTMENTS This is the TOTAL amount of investments in each country in local currency And not the variation in the quarter e MONEY TRANSFER to o France or Morocco Funds exports dollar from the U S to overseas o U S from France or Morocco to the U S in local currency e LINES OF CREDIT This is the list of lines of credits recorded in that country By default appear only active lines in the quarter You can display the lines closed by checking or not the Hide closed credits In the table are displayed e The status of the credit line GRANTED The credit line was granted by the banker and is active If it was used in the previous quarter it cannot be cancelled REQUESTED The credit line was requested by the company but has not yet been signed by the banker COMPLETED The credit line was repaid and or expired e The type of reimbursement REVOLVING the credit line may be used freely up to the amount Withdrawals and refunds are free REPAYMENT AT TERM the credit line can be used from the agreement and its terms until the next quarter excluding any prepayments FREE REFUND the credit line can be used from the agreement and its
132. ngle quarter It will therefore limit or postpone certain decisions for compliance with the limitation noted RAW MATERIALS QUALITY e 9 OF SUPPLIERS UNDER QUALITY ASSURANCE The percentage of suppliers under Quality Assurance defines the percentage of raw materials purchased under Quality Assurance The AQ level insures a better regularity of the selected quality level A raw material under AQ is more expensive e NUMBER OF ANNUAL AUDITS SUPPLIER It is the number of annual audits for each vendor under AQ These audits are mandatory to insure that the Quality Assurance agreement with your supplier is correctly respected e RECEIVING INSPECTION ACTIVE YES or NO if you use or not a receiving inspection by sampling e SIZE OF CONTROL SAMPLES That is the number of parts taken as sample for receiving inspection The receiving inspection is destructive e CONFIDENCE LEVEL It is the number of defective parts found at receiving inspection in the sample and from which the whole raw material lot will be rejected EFFICIENCY OF RECEIVING INSPECTION Level of raw defects 1 ag Jb Ah 6 0 10 12 Probability of detection 0 0 0 1 05 34 11 1 236 39 4 PROBABILITY TO DETECT SELECTED DEFECT RATE It varies with the size of the samples submitted to destructive testing the confidence level used and the fault level of the lot The POISSON LAW gives the probability of detecting a defective batch according to the Chapitre VI DECISIONS
133. nnality factors in the data base QUESTIONS RELATED TO THE RULES OF THE GAME What is our product How to know the economical conditions on the 3rd country What to do if the personnel of production is insufficient What to do if the personnel of Quality staff is insufficient Are the decisions used for simulations the same ones as the real decisions Why the earnings per share are they different according to the repart or the posted menu What are the indicators that can visualize in the analysis of competition What does the manufacturing variances include How is it made that my customers are always dissatisfied whereas improved my quality Chapitre VII USING THE PROGRAM 131 7 I Business Game Messenger Menu Checkdecisions decisions Use the button Envelope to open the window i Business Game Messenger which allows you to exchange messages with control of the game other choices of recipients could be offered Beginning of the session your animator will explain how to communicate with him with your banker etc This communication may vary according to the logistics of your session E I BusinessGame Messenger From Contro You are welcome OK thank you IK In the Messenger window e In the lower type the text of your message that you send to the game s control amp send it with the button e Messages sent are displayed on the left side of the window e When you w
134. nnnnnnnnnnnnncnnnononononnncnnnnnnnnnnnnnnnnnnnos 126 5 Usma the online Help its 128 a eBusiness Game Messen Ger dsc 131 5 Identification e OPPantzatlom ebat dosis 132 9 Decision display ii table Tm 135 B Financa IN CWS adiaiiis eisa sa iaee 136 C Business Game doCume nts ai ead aaa 137 D Usine the data HER A ti 138 E Transferrine data to Exc RI SU Ea s euer e EN E eae seu dE 139 F BHSUOSS PEGDIHCS tt 141 G Onanttauve methods A at n dac nd ME iE 144 i ncIpleS a deed eiie O O E CU SE O IN 144 2 LINEAR REGRES SON ti alte 145 9t SEASONAL EI ES TREND ista 146 As EXPONENTIALSMOOTHING aid 147 MEE OH UNIS EE 148 H Renin on DHVOSUDIOHIS Sans a A A aa 149 L UTE TATIUS 153 A ER 153 Zi DUAL ENTRO 154 SEE N 156 ds NL snacosaueaanaissesoatanlacnanal saccadaninenamehsasentendaegscusdasss 157 Jo INCASE OF ERROR e tao e D 158 VII SESSION S ORGANIZATION ooocooccconcccoccconnconcnnnancnnnrnnnnnnanennnronannnanrnnano 160 A ANA P1 ERR Y 14 UCNE ssor A ini 160 B Preparne a SESSION e RE ONUS SRI A E 160 Chapitre II TABLE OF CONTENT 9 C Using the game in preparation mode iaa 161 D How to play a QUIN A e a dida 162 E The role the annalo S aone A AN adage eee 163 PX ERROR MESSAGES 2 1 iS 164 10 l Business Game User s Guide IMPORTANT REMARK This simulation relies on a SCENARIO that defines the market conditions economical environment countries and the starting position of the compan
135. nt the machine productivity The productivity factor only affects the manpower required but not the machine capacity Beyond this productivity effect actual hours will be also influenced by volumes Productivity Vs machines age 1 2 1 15 1 1 Ratio 1 05 2 24 28 32 36 4 44 48 5 2 Years 50 l Business Game User s Guide MANPOWER COSTS Vs VOLUMES MANPOWER COSTS Vs VOLUME saving due to total volume 0 07 To Saving due to volume on country 1 53 0 66 0 00 Total hours saved 4322 h Saving or overcost 1 33 Final Manpower unit time 0 52 h 0 64 h 0 74 h SAVING DUE TO TOTAL MANUFACTURING VOLUME If positive that is the percentage of saving on manpower time thanks to total volume produced in quarter all countries combined If negative this is the to be added to unit time due to weak volume SAVING DUE TO VOLUME ON COUNTRY If positive that is the percentage of saving on manpower time thanks to the volume produced for this single country If negative this is the to be added to unit time due to weak volume TOTAL HOURS SAVED This is the total of manpower hours saved or consumed compared to standard time according to decided production volumes SAVING OR OVERCOST GLOBAL saving or over cost on manpower used for manufacturing thanks to volume FINAL MANPOWER UNIT TIME This is the actual unit time taken into account for manufacturing results combining eff
136. ntry amp decisions status At the opening of a new quarter the decisions of the previous quarter are renewed e with the exception of salary decisions release of shares or investment in capacity e so you can change some decisions without having to enter all values Decisions are in status INITIALIZED The decisions of the past quarters cannot obviously be modified DECISIONS DATA ENTRY Simply enter a new value by introducing it into the appropriate field Take the example of a change in sales price Before modifying the value is displayed on a light gray background Sales price After the typing with the Enter or Tab the value is taken into account and is displayed on a blue gray background It is recorded in the database of the game even if it has an error These decisions are in status RECORDED Sales price You can enter several decisions in various menus before submitting them to a control To verify the decisions use the If the decision contains an error it will appear on a red background a will Check decisions appear on the button bar and an error window or explain the anomalies detected VALUE S OUTSIDE LIMITS 17 HEADCOUNT OF QC DEPARTMENT IS INSUFFICIENT TO PERFORM THESE TASKS These decisions are in status ON ERROR The list of errors is at the end of the Guide By clicking on the line in error you open the input menu where you can change the decision Correct the error and reru
137. ome GROSS NATIONAL PRODUCT Last known GNP measured ESTIMATED GNP FOR NEXT FOUR QUARTERS Forecast on next four quarters GNP based on last quarter trend 86 1 Business Game User s Guide WORLDWIDE MARKET WORLWIDE MARKET IN UNITS Approximate total market potential This quantity is related to customer demand and can be higher than total sales UNITS OF COUNTRY MARKET of this country market in units Vs worldwide market WORLWIDE SALES TURNOVER Approximate total market potential This value is related to customer demand and can be higher than total sales TURNOVER OF COUNTRY MARKET of this country market in value Vs worldwide market MARKET TOTAL TOTAL MARKET DEMAND 1 Approximate total of demand in units in this quarter TOTAL ACTUAL SALES 2 Approximate total of sales in this quarter A difference between 1 and 2 can come from lost sales due to product shortage TOTAL SALES TURNOVER Approximate total value of sales in this quarter Chapter IV THE GAME S REPORTS 87 4 Market competition o A ev WIN TEAM IN messin Inc Summer Ass BELFRAN Cor La 5eme Cor Six Distribution type Wholesalers Wholesalers Wholesalers Wholesalers Wholesale Estimated sales volume i 621000 590900 553300 476800 3783 Lost sales volume ail 0 0 0 0 0 Market share all 20 06 19 08 17 87 15 40 15 34 12 22 Sales turnover Jj 79177505 75339755 70545755 60792008 60575255 482332 Market share on t
138. ompany will not lead to the same result if it is isolated or joined with a similar effort of all companies in the market Chapitre II THE SIMULATION S RULES 13 The publicity budget can be broken down between different axis e Product promotion e Company image improvement e Distribution network support This balance between different axis could be changed along the time to fit the various situations as e Opening of a new distribution network e Loss of market shares e Changing your product positioning e In addition the customer s fidelity and the remanence of the publicity and R amp D effects will push you to analyze the combination of those parameters through a correlation method Efforts on Research amp Development can be balanced between e Product improvements aiming to increase competitiveness or and cost e Intrinsic quality improvements e Publicity communication efficiency At the beginning of the simulation you are selling in USA and FRANCE through wholesalers You can decide to work with exclusive agents or create your own distribution network This will improve your efficiency but the involved cost will be higher When you work with wholesalers or exclusive agents you will be able to increase their effectiveness in their granting higher distributor margins For your own network you will be able to motivate your sales force by reinforcing it and while giving higher bonuses to salesmen Of course these choic
139. osts of departures 20667 Layoffs 0 Total cost of personnel 3097952 54 l Business Game User s Guide PERSONNEL MOVES PERSONNEL MOVES Manpower in quarter Q 1 Manpower in quarter Q Retirements Resignations Selt wiled departures Early retirements Layoffs People hired Retirements planned in G1 Possible early retirements ad These figures are related to direct people in manufacturing excluding management and quality staff MANPOWER IN QUARTER Q 1 Total of direct workers at end of last quarter MANPOWER IN QUARTER Q Total current number of direct people available for the quarter production RETIREMENTS Number of people having left the company this quarter having reached the legal age 60 RESIGNATIONS Number of people having resigned during this quarter This number is taken into account to calculate the turnover SELF WILLED DEPARTURES In case of personnel compression that is the number of people choosing to leave the company with the incentive bonus given to promote voluntary resignation EARLY RETIREMENT Number of people between 55 and 60 having left the company in early retirement LAYOFFS Number of people being dismissed due to personnel compression PEOPLE HIRED The difference between Q 1 and Q increased by the retirement and departures The hiring may have been limited by the condition of the employment market RETIREMENT PLANNED IN QUARTER Q 1 Number of people who will reach the retirem
140. pany you can influence the stock exchange behaviour releasing new shares or buying back your own shares You will find information in the Game data base to perform stock market analysis Chapitre II THE SIMULATION S RULES 29 D QUALITY MANAGEMENT Reminder USING THE QUALITY MODULE IS OPTIONAL Quality Management is one of the essential dimensions of modern industrial activities The Business Game illustrates the main notions related to ISO 9000 and shows the relations between your Quality results the Marketing policy and financial results For each quarter your Quality decisions will concern three areas e quality of raw materials e quality in manufacturing e final quality acceptance You can also decide to prepare and apply for an ISO 9000 certification defining your Quality Plan and proving its respect through regular ISO audits This certification process has a cost but it could lead to a positive impact on your marketing performance and on your clients fidelity 1 Raw materials quality The raw materials quality will first depend upon the quality level you request from your suppliers It is measured by the AQL Acceptable Quality Level That is the worst quality level you can accept Therefore that is the percentage of defective parts that would be detected by a sampling process at receiving This AQL is normally guaranteed by your supplier The price of the purchased materials will be h
141. ple is equal or below the confidence level selected for the sampling plan The calculation is done using the Poisson method Poisson function P p e PP np ct Pn Probability to have exactly r defects in a sample of size n n Sample size It must be at least 16 and this size must be less or equal to a tenth of the whole lot p Defects level for the lot This method assumes that the value is fewer than 10 C Confidence level Beyond c defects in the sample it will be rejected The table here below gives the probability to find c defects or less in the sample Example n 125 c 5 defects 4 114 l Business Game User s Guide np 125 0 04 5 The table shows that the probability to find 5 defects or less is 0 616 Use the following table to know the Poisson coefficient 1000 x probability of c or fewer occurrences of event that has average number of occurrence equal to np ss aso e p ei 3 a sm se sw 29 Sw 5 005 005 097 000 202 s 763 sm 076 004 009 EM 463 731 964 857 947 983 603 7er ses ses 988 se 998 744 942 977 992 997 475 668 se 009 960 se so 590 153 867 936 720 844 921 476 651 791 0 ee T 941 e j ast E se 7e wr e Chapitre VI DECISIONS MAKING 115 11 Personnel management decisions danpower management Compensate natural attrition Voluntary departure bonus o Preretirement allowed Work time man
142. previous quarter e CAPACITY INCREASE It is the increased capacity that will be added to the existing capacity to be used for the production of the next quarter e RENEWAL OF MACHINES This is the modernized machine capacity during the quarter expressed in units of capacity that are renewed The machine age will be reduced to O for this renewed capacity e MANPOWER This is the direct labour available for production of the current quarter Department staff quality is not included in this number You may be limited by the available availability on the labour market Chapitre VI DECISIONS MAKING 105 EVALUATION OF WORKLOAD e MACHINES USAGE RATE in is the ratio between total production and the current capacity Obviously limited to 100 e MANPOWER USAGE RATE in 1s the relationship between actual hours and NORMAL hours regardless of possible overtime e OVERTIME in additional hours added to normal hours It is limited default to 20 but this may change Overtime are subject to extra pay default 50 e USAGE RATE LIMIT in 1s the ratio of total hours used and hours available taking into account overtime possible Obviously limited to 100 If the limit is reached you will either o reduce the quantities produced o hire staff NOTE THE RATINGS OF CHARGE Utilization rates shown for the quarters simulated may be approximate since the simulations renew elements of the previous quarter fault level productivity and i
143. r IV THE GAME S REPORTS 85 3 Country market report The marketing reports are common to all teams They show sometimes approximately the status of markets and competitors in the three markets You will also find the major environment indicators as currency rates GNP tax rates and prime rates This MARKET REPORT is available for each of the countries MARKET REPORT ECONOMICAL ENVIRONMENT Currency rate Prime rate Short term loan rate Financial investment rate Companies income tax rate G GNP 1 Worldwide market Total worldwide sales Country s share in volume Worldwide sales turnover Country s share in turnover MARKET TOTAL Global market Total sales volume Total sales turnover COUNTRY S ENVIRONMENT for each country CURRENCY RATE Current value of local currency Vs the value of the headquarters country currency US FINANCIAL PRIME RATE This yearly rate is used to calculate the interest on long term loans in the quarter This value can vary on every quarter and is used on the whole amount of loans at the end of the quarter This prime rate is also the basis for the short term rate and financial investment interest rate SHORT TERM LOANS RATE Yearly interest rate used to calculate the charges on short term loans at the end of this quarter FINANCIAL INVESTMENTS RATE Yearly rate used to calculate the profit on financial investment at the end of this quarter COMPANY INCOME TAX RATE of tax on companies inc
144. r several quarters e The gross value flow income expenses for this quarter e The same value but discounted with the selected rate e The balance of gross flow cumulated since the first quarter of investment o Inred balance remain negative o In green when income compensate expenses o The quarter when the value are switched from red to green correspond to the payback e The balance of discounted flow cumulated since the first quarter of investment correspond to the net value reached at each quarter o Inred the net value remains negative o In green when discounted incomes compensate discounted expenses o The net value of last quarter corresponds to the NPV of the project compare hypothesis S XJ eae eT na sis Ji Choose hypathesis to compare AT Project 1 AT Project 2 Yearly cost of capital 06 12 12 IRR internal rate of rentability 17 95 18 0356 HPV net present value 10133605 4839305 Payback after 16 15 Investments 12 2110000 12 80000 14 20000 You can view and print a comparison chart which will include the contents of various assumptions and expected profitability This could be useful in negotiating a loan with your bank Chapitre VII USING THE PROGRAM 153 l Objectives amp strategy In quarter only 12 you will have access to modify the table that determines the choice of objectives and priorities that you assign From the quarter of 13 the update is disabled but you have access in cons
145. r the treasury requirements If the requirements disappear the corresponding credit is partly or totally refunded SHARES BUY BACK 21 Payment at last quarter s stock market value of the company s shares purchased by itself TOTAL TREASURY ISSUES 22 Sum of items 1 to 21 TREASURY ENTRIES TREASURIES ENTRIES Cash from sales 7766497 5 Money transfers 250000 Income from investments 1625 5 Financial investments sold 03 Long term loans usage 03 short term loans usage 657047 Common stock shares release 0 TOTAL ENTRIES 9775969 5 TREASURY STATUS Treasury at quarter opening 03 Het change 03 TREASURY AT QUARTER S END 03 SALES 23 Correspond to the quarter sales that are always paid totally in the same quarter MONEY TRANSFERS 24 Value in local currency of money transferred from a foreign country INCOME FROM FINANCIAL INVESTMENTS 25 Income resulting from financial investments of last quarter 78 l Business Game User s Guide FINANCIAL INVESTMENTS SOLD 26 Decrease of financial investment from last quarter LONG TERM LOAN USAGE 27 Increase of usage of long term credit lines SHORT TERM LOAN USAGE 28 Increase of usage of short term credit to cover additional treasury requirements COMMON STOCK SHARES RELEASE 29 Money resulting from sale of common stock shares TOTAL ENTRIES 30 sum 23 to 29 TREASURY AT QUARTER OPENING 31 Equal to item 31 of last quarter s treasury report TREASURY NET CHANGE
146. ram displays a graph showing according to the method e blue bars for the data set analyzed the green line showing the linear regression the yellow line giving the expected seasonal variation the purple line giving the prediction smoothed the red line gives the prediction based on the correlation by multiple regression You can also display the values of the data analyzed and the values calculated by the method chosen Chapitre VII USING THE PROGRAM According to the selected method you will see more results such as the equation of the linear trend line a table giving the coefficients of the seasonal factor for the quarters coefficients correlation rates the values of the multiple regression LINEAR REGRESSION E Global market USA de a Marketing B Actual values B trend m Manufacturing we Quality E Human Resources y RED E Finance A fl France E i Marketing 3 Finance Average sales price Countys share in turnover Country s share in volume Defects raw materials Global market Global publicity effort GNP Quarterly inflation Seasonality Total sales volume Average 2357010 Yearly inflation Standard deviation 427847 Variance 1830526849000 Trend line 1699206 101201 x Quarter Oo co cJ Ch A d Lo Ro 1690900 2404400 2112400 2078200 2123900 2888900 2361100 2063000 2622700 3224600 2002808 2104008 2205208 2306410 2407610 2508811 2510012 2711212 2812413 2913613 3014814 311
147. reas from the top When you open a chart it is linked to the menu from which it was posted If you return to this menu the graphic will be displayed again Chapitre VII USING THE PROGRAM 125 4 pop up windows Some functions in the software will open a pop up window The workspace is therefore disabled up to the closing of this window This will be the case for example displaying the score display and selection of priorities of objectives display evolution in objectives and indicators quantitative methods calculating return on investment company organization chart communication with the animator display and the creation of credit lines Close this popup window to reactivate the workspace i BG ame Tools Documents Heip reverse 1 Team 2 urrent quarter 12 2 Send decrssons Juarter end 24 6 10 7 Omin gt DECISIONS REPORTS LA T uj um de X L Objectifs seulement 2 Return on equity 3 Company market value 5 Profit over turnover 6 Worldwide market share 7 Price quality ratio 8 Sales plan accuracy lg win Team INTERNATIONAL B Peertech Inc E summer Associates Company Bj BELFRAN Corp I L 5eme Compagnie B sixa 126 l Business Game User s Guide 5 Connection to i Business Game and language selection Identifiant email Mot de passe Any activity on the 1 Business Game goes through this connection menu The menu s language is selected according to the default lang
148. ring Quality Human Resources R amp D E Finance B d France i Headquarter Marketing p Finance MN Morocco i Headquarter Marketing Country s share in turnover Countrys share in volume Defects raw materials Global market Global publicity effort GNP Quarterly inflation Seasonality Total sales volume Yearly inflation Xi mm oo O U wn o From 2 HH To 12 H 1 690 900 2 385 300 2 238 800 2 026 600 2 178 900 2914000 2 413 700 2 281 700 2 571 100 3 169 400 want to see the world your group or individual countries Then select the domain available for this choice the elements relating to the country marketing production You will then see a list of possible variables and you choose one of them by double clicking on its label By double clicking successively on other lines you can overlay multiple variables if their magnitudes are compatible To remove a variable click the red Cross 144 1 Business Game User s Guide G Quantitative methods 1 Principles They will help you analyze past data to understand the reciprocal influences of variables on each other or predict the future They are applied on the variables recorded in the database Choose the method best suited to the analysis that you perform and interpret the results with a critical mind Tools Quantitative E Return on To use these methods use the menu TOOLS QUANTITATIVE
149. rren arg nos rar 12 Chapitre VII USING THE PROGRAM 137 C Business Game documents Game programs automatically generate Web pages that Documents give access to different information a Newspaper a Your universe a Parameters a Schedule This information will be enriched from quarter to quarter Hel Available documents will be read with a browser such as em f Internet Explorer or Firefox ou Adobe Reader P User manual uy Guided tour E Tutorial q Online help Depending on network configuration and your choice of animator the Web pages content may vary Qj FAQ Bucnsce Gama PE E Q PARAMETERS SELECTED FOR YOUR SESSIKON SCENARIO Univ arcs 1 The following values summarize the major constants listed In chapter HT of the usere guide The guide shows default values of a standard scenario which could be different In the scenario of the session yau will play The values of this parameter sheat correspond to end of Quarter 11 and will therefore be applied In quarter 12 Other information as financial rates salary casts maton rate or GNP are avallable In several reparte accessed on the preparation disketiae or in printed reporta Your game session Session titie Fast season You belong to Universe 1 Number of teams competing in your Universe E Finance simulation ls active Yes Quality simulation le active Yes 150 2000 simulation IE active Yoo Human Resources simulation ls active Yea a a tua USA 3
150. rs to frequently asked questions In the Help window in the tree pane on the left you work in two modes e The mode Content where a page choose among the topics presented e The mode Index where you find the keywords giving access to pages In the right window you will see the selected page Underlined texts are links to navigate from one topic to another Links Previous and Next you can go back or to move to next page MODE Content Contents Index i Business Game EN V1 a Contents e Table of content e i Business Game principles e Simulation s rules o Simulation rules o Selling The market The market Your company amp your products Marketing information o Producing a Manufacturing Manpower Productivity Machines capacity Capacity investments Export amp work in process Productivity o Managing costs Costs a Product costs Manpower cost Production overhead Investments costs Warehousing costs Shipment amp import duties Sales administration costs Taxes a Costs summary o Financing Contents Index Next 2 Table of contents i Business Game V1 a Game structure and symbols SIMULATION RULES GAME REPORTS OBJECTIVES amp STRATEGY DECISIONS MAKING USING i Business Game software ERROR MESSAGES FAQ Use the Content mode to select a page in Help directory Use the Index mode to select a page through a keyword BG CONSULT 2012 Chapitre VII USING THE PROGRA
151. rter 96 publicity on product P Marketing e your corporation J Marketing Advertising budget if Manufacturing e a country ifa Manufacturing Available for next sales d Quality e Quality Efficient publicity Z Human Resources i I Human Resources Entries of finished goods R amp D Domains will be a R amp D Inventory at quarter end Finance e your company in a country 3 Finance Quantity served under warranty A France marketing A fi France Quantity sold i Filiale Filiale Sales plan Marketing production 5 Marketing Sales price S Finance e quality Finance M e e human resources E Mercer Filiale f Filiale Marketing e inance Marketing Finance Finance Click a domain to get a list of variables that are available Then double click on an item to see 1ts evolution r nCumul From megas ora 2 E nta E 32 1n 32 EX Wk cioe X 4104 sanoe en s 10 QuaMis vaidus Dont Miercs ghal l HN 430700 0002 1001009 00000 14D2000 1202000 Cams Fom 2 w 2 Check the Show Data to see the table of values of the variable chosen You can select multiple variables for display in the same graph or the same table The graph will be significant if you combine variables whose ranges of value are consistent You can close the display of a variable by clicking on the corresponding red Cross Chapitre VII USING THE PROGRAM 139 E Transferring data to Excel You can send a large number of reports data or data from
152. s your highest priorities More your goal receives a high priority more it will weigh in your ranking This method of ranking favours continuity Those who succeed by chance on certain criteria that they had neglected are penalized Continuity with those who pursue their goals while neglecting others have an advantage By analyzing the significance of criteria you will find that some are correlated or antagonists By spreading your weight you can spread the risks or instead focus on the interrelated criteria You will see in this list that you should aim to maximize or minimize certain objectives You could earn more or lose more 154 l Business Game User s Guide The model will calculate each quarter the value obtained on each of these objectives and results will form the basis for ranking Control of the game may request that the value taken into account on each target is based on a different time period e on the value of the last quarter played e onthe average of the last four quarters e onthe average from the quarter 12 since the opening of the game It is possible that the control have set a different weight for each criterion The higher is the weighting amp the greater is the success of this goal more you will get points 2 Strategy Starting the session in quarter 12 you will have to define and save the strategy you adopt to achieve the objectives chosen In the task list of the quarter you will see
153. s Game User s Guide E027 ERROR ON OF COMPENSATIONS ALLOCATED TO TRAINING Between 0 and 10 E028 ERREUR SUR LA PRIME D INCITATION AU DEPART VOLONTAIRE Between 0 et 36 months E029 QC STAFF INCREASE EXCEEDS MAXIMUM You plan to increase the Quality Staff to be able to manage the planned decisions but the manpower market does not allow you this increase within one single quarter You should spread the increase over several quarters and change some of these decisions E030 REDUCING QC STAFF EXCEEDS MAXIMUM POSSIBLE IN THIS QUARTER You are trying to reduce the size of the staff quality to cut costs but this decrease can not be done on a single quarter E031 INSUFFICIENT CAPITAL AFTER SHRES BUY BACK The cumulative share repurchases leads you to an unacceptable capital Review the number of action to reduce your share number decrease E032 YOUR SALES FORCE IS ABNORMALLY LOW You must properly cover your sales territory and the number of sellers is introduced abnormally low E033 YOUR SALES FORCE IS ABNORMALLY HIGH You must properly cover your sales territory but the number of vendors introduced is abnormal E034 ERROR ON QUALITY CIRCLE NUMBERS Between O and 20 The number of Quality Circles will lead to a higher need of QC staff to animate the Circles E035 Your equity is incompatible with the planned dividend Your Board of Directors has decided to refuse the planned dividend since your equity level is too low E036 Your recent result
154. s are incompatible with the planned dividend Your Board of Directors has decided to refuse the planned dividend since your results of last quarters are too low E037 Exported quantities exceed quota Limit the exported quantities to the specified quota E038 REFURBISHING CANNOT EXCEED INSTALLED CAPACITY Set this value down equal or lower than current capacity E039 ERROR ON THE OF THE WAGES GENERAL INCREASE Defined as a percentage of basic salary it must be between 0 and 15 Chapitre IX ERROR MESSAGES 167 E040 INCOHERENT LEVELS OF SAMPLING SIZE AND CONFIDENCE LEVEL The sample must contain at least 16 pieces and must be smaller than 1 10 to check the lot The confidence level is the threshold of defective products from which the lot is rejected It obviously cannot exceed the sample size E041 ERROR IN PLANNED SHARES NUMBER Check if the requested value is realistic and negotiate it with the game administrator playing the SEC role E042 IMPOSSIBLE TO EXPORT BACK amp TO PRODUCE IN THE SAME TIME You try to return products to the factory from a subsidiary and have decided to produce destined to the same subsidiary 168 i Business Game User s Guide Assign priorities to objectives Total since querer 12 Last quarter Total since querer 12 Labios quais Last quarter Last quarter Variation since quare 12 Define and record your strategy Choose your company name D 6 Aa h Y b a Total since
155. s involved in your company activity The definition of these costs and the logic relating all costs together are included in the chapter II describing the different business reports You will have access to a result simulation_that will allow you taking into account your decisions and sales plan to know the forecaster cost level following realistic rules close to the model rules even if some approximation can affect the simulated results This will allow you to avoid spending non productive time and tedious tasks preparing your decisions Nevertheless even using this easy tool to prepare the decisions it is necessary to know the cost structure explained in this chapter That will help you to determine your sales prices control your margins plan your treasury but also to avoid the trap of a simulation result used without critical analysis Chapitre III THE SIMULATION S RULES 19 1 Cost of products You use aSTANDARD COST system There are three components in the standard cost of a product e the manpower cost e the materials cost e the production overhead expenses These standard costs were estimated based on a production of 600000 units and a capacity level of 650000 units It was assumed that the ratio of total export was 12 to 1 The costs presented in the table below correspond to the typical volume of production based on which standard costs are calculated You will probably have to produce more or less than the volumes
156. s used for simulations the same ones as the real decisions Why the SERES ze share are gis different according to the report or the posted menu 160 i Business Game User s Guide VIII SESSION S ORGANIZATION A Session s structure SESSION SCHEDULE Preparation phase INTRODUCTION BRIEFING OBJECTIVES amp 0000005 QUARTER nd FINAL The game session is usually preceded by a preparatory phase which begins a few days before the session itself During the session the first day is devoted to e explain the rules e guide your thinking about the objectives and strategy e prepare the decisions of 12 quarter The time allotted for this quarter will be long enough since the first quarter is often a quarter where investments are numerous and involve budget requests Subsequently the time given for subsequent quarters will be reduced At the end of the session you will prepare the debriefing session during which you present your results and the animator of the game will give you his feedback on your team and on the session B Preparing a session For the session you receive preparation instructions and access codes to use the website i Business Game where you will find e The User s Guide The team members The agenda of the session The parameters of the scenario in which you will play The history of your company Do not be scared by the volume of documentation The User s Guide is a reference docum
157. ses are charged to the headquarters The unit cost of 0 25 is due for each unit transported for USA to foreign market or back to USA IMPORT FEES The unit import fee of 0 20 is paid by the foreign subsidiary in any country These import fees are not reimbursed in case of quantity brought back to the headquarters market 7 Sales amp administration costs They have mainly two parts e Some fixed costs related to sales department structure nearly flat but which can vary for different sales levels according to sales volume global level distribution network type and learning curve position of the distribution network e The variable component is linked to sales volume and cost of customer service processing your client s claims These costs cover e Order processing and invoicing e Order processing logistics e After sales processing taking in charge customers claims et product replacement logistics Furthermore it appears that those costs are influenced by the continuity of your presence on a market To access to a new market or to come back to a market you will have to pay a higher cost corresponding to the network set up You can change the type of an existing network The set up costs vary with the network type They are obviously lower for wholesalers intermediate level with exclusive agents and higher for a privately owned network Cost can be higher but efficiency is also different and cost will decrease after the network cr
158. set of two quarters The decision on investment taken on quarter Q does not allow you to produce more in this quarter Q than the available capacity of quarter Q 1 At quarter Q 1 the new capacity is now available but the additional manufactured products will only be available for sales on quarter Q 2 Then you will get the first cash flow related to your investment Each investment project will imply a fixed cost for the project study 100000 This expense is taken as a miscellaneous cost charged to the current quarter and not depreciated The cost of capacity increase is 30 per additional unit This amount is taken as fixed assets and depreciated on a linear basis over 10 years 2 5 per quarter 18 l Business Game User s Guide 9 Export inventories The total planned quantity for products manufactured in a quarter covers the quantity intended for domestic market and foreign market s In case of production scrap or shortage due to strike the lost quantities will affect equally all the markets on which you work The product units manufactured in a quarter will be available for sales in the next quarter once the quantity reserved for warranty has been deducted The same rule is true for foreign markets In the reports the domestic or exported quantities are included in the Work in process You will find in the production report and inventory report all the information on production work in process and a
159. sic salary 7653 Social charges rate 20 50 Awerage cost of salary 9 03 5 Proftt sharing 1445 Average yearly income 140373 Gross evolution of income 2U07 Yearly inflation 2 60 Net change 4 67 BASIC SALARY Basic salary in your company US SOCIAL CHARGES RATE 57 to be added to basic salary and paid by the company to calculate the total cost of salaries assuming that you multiply the basic salary by the ratio linked to age of people Social charges are not applied to bonus and profit sharing AVERAGE COST OF SALARY Combination of basic salary age coefficient and social charges in US PROFIT SHARING Value of profit sharing bonus given to each worker in US AVERAGE YEARLY INCOME Individual average total income including salary bonus and profit sharing in US GROSS EVOLUTION OF INCOME of the yearly evolution of average gross salary YEARLY INFLATION of inflation measured on last four quarters NET CHANGE of yearly net average revenue evolution in US PERSONNEL EXPENSES COMPENSATION EXPENSES Salaries and charges 4125603 5 Cost of hiring people Profit sharing cost 1252805 Self willed departures Bonus 0 Layoffs cost Social expenses Total cost of personnel Cost of early retirements 0 SALARIES amp CHARGES Total of quarterly cost of salaries including bonus and profit sharing in US 03 0 3500 4313513 3 58 l Business Game User s Guide PROFIT SHARING COST Total of prof
160. so be limited by an insufficient level of manpower The fixed costs related to the available capacity are due even if the capacity is not completely loaded Be aware of these fixed costs if you maintain an idle capacity for a long time You can increase your production capacity at any time but never reduce it You have to plan correctly the capacity the manufacturing plan the inventories and the yield to be sure that your sales plan is covered despite the offset between the quarter when you invest the quarter of manufacturing and the quarter for sale Do not forget that quality defects can lead to scrapping and quantity used for product replacement under warranty 16 l Business Game User s Guide Insuring the balance between sales plan manufacturing plan manpower plan capacity investment and finance will allow you to optimize the cost related to the manufacturing equipment and therefore to increase your margins The usage of a spreadsheet program as EXCEL will help you to prepare these plans and do the follow up all along your company s life Chapitre II THE SIMULATION S RULES 8 Capacity investments Production Finished goods decision in inventory Available Capacity Capacity investment decision 17 Cash Investment is the only way to increase the machine shop capacity The picture illustrates that the decision to invest in capacity 1s related to the possibility of additional sales with an off
161. staff function e With the button with a red cross X you delete the current box As a symbol you can group several responsibilities in a single box 1 e Finance amp Human Resources With the Green boxes you can share the responsibility between several teammates A team member can appear in several boxes Francois BERTHON Vincent CAMMILLERI Florence DJIEDOM KAMGANG Ferdi KARAOZ Quentin TROMONT In each box you can e change the title of the box by placing the mouse on the old title not for the top box that includes the company name o Typically a box title would be Marketing Production Finance Human resources e You can also choose the title of the position by placing the mouse on the current title and selecting the title from the dropdown menu o Chairman CEO Director Deputy manager Manager o If the list of team members is registered you click on the picture to designate the person responsible for this function If his photo is available it will appear in the box Chapitre VII USING THE PROGRAM 135 9 Decisions display in table DECISIONS sj Marketing Clicking on the Table button you can view a table that lets you see the decisions of several quarters Click on the or to expand or consolidate lines The arrows to the left or right will sweep the quarters of the past and the current quarter DECISIONS ER Decisions overview Gd PE Corporate dE Marketing Adv
162. sted Bars Pie Show data 4 x Lines Quarter 11 A BE Market fare _1 2 3 s se Pie chart 20 18 20 19 Display the values table 21 20 21 21 8 19 18 20 Select the 11 81 11 81 quarter 14 43 14 43 14 10 14 10 Some variables are displayed solely for your team Y ou select the variable by clicking on its value When the report shows values of a variable for the various competitors such as market share you have two choices e byclicking the graphic all which follows the title you get the values of all teams for example for a pie giving the market share of a quarter e by clicking one of the values you display the evolution of this value for the team selected Chapitre VII USING THE PROGRAM 143 Ligne JAffcherdonn es C Cumul From 2 HH to 7E men Part de march CA a2 Part de marche CA 16 ME ELUSA x 2 s Sees Part de marche CA HL ELUSA x Part de march CA You will also get a table giving the values of teams throughout the quarters Graphs related to the Data Base are selected while pointing to variables in the simulation data base DATABASE l Choose the location of data you gt Peertech Inc Average sales price Select location domain Show or hide the data value table Click to close this graph WL USA i Headquarter s Marketing mf Manufactu
163. sultants to get additional information or advice You will find in the Game Web as in the Financial news a significant volume of information Sharing the various tasks in your team you will analyze them and then react e My objectives Profitability Growth Company value e My strategy to reach objectives Marketing Finance Personnel Decisions to implement my strategy Price distribution RED a Investment m Salaries e Simulation model markets competition results sales net income stock market value Analyzis Chapitre Introduction to Business Game 9 WHAT ARE OUR OBJECTIVES Don t think that reality can be as easily mastered as it is possible in the simulation We want to illustrate by practice some management methods in various disciplines as marketing production finance and optionally quality or personnel We want to show you as they are interdependent and to push you to plan your decisions in a coherent way The complexity of your business will lead you to work in teams to analyze the results prepare your plans make the decisions and eventually modify your tactic Organize your team as you want Each member can specialize or share all major decisions but whatever your choice is never forget to work as a team You will translate your choices publishing the organization char
164. t for your company In principle you will use the English version of the programs If your school uses the bilingual version you will also have access to the French version In this case you can also use the French manual that will give you the same information GOOD LUCK 1 Business Game User s Guide Ill TABLE OF CONTENT gt gt INTRODUCTION TO 7 BUSINESS GAME eere 3 TABLE OF GONTEND 2 52 40 59004125020 aM CV dax e uad sNaQEKR d AVR P EMR d DVaM ELM RCUE LEER NES 6 THE SIMULATION S RULES cuina ia 11 SELLING PRODU CING E SRREU 11 ECOLE CU APR OA o E E E E E E N 11 2 Xout company your PLOGUCIS mirta torera triias 12 SEMIS PP IOS NR 12 nn A E EAA 13 PPP o CO A 14 A e e e PS O E E 15 Ts teo o AAA o nn E GO o N SEEN 15 ore ra a NIS A A 17 D 0 A E reos SUR EOS PdesDRUERR IDE 18 IQ eL 18 MEME S 6616 0 0 01 Ue NE meet 19 2 MOPON Meg IRE DIETER 20 Ss JAJManubacturins oyeron 21 Ay ACAPACIEY Hive SUD HS COSUS iio 22 o as o o m 22 D SMI 6s por eiii 22 I Sales amp administration COSS oii OO I 0 o D 0070 LT 22 8 Efficiency amp cost of distribution NMEtworkKS oooooonnnnncncnnnnnncncnononononnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnrnnnnnnnnnnnnnnos 23 9 Summary of costs may vary with the session s scenario sssssssssssssse
165. t is applied to the wage workers of this age The salary decided in the decisions for staff is an average salary When hiring the model evaluates in which age group new employees are recruited focusing on younger This can be advantageous for wage cuts but can lead to problems of quality and or productivity if you do not give adequate training If you have any resignations it will be rather middle aged workers already experienced that will be the first to go For older beyond e 55 years they are potentially those who can retire early if you plan decrease in employment only The retirement age is normally 60 years Chapter IV THE GAME S REPORTS E REPORTS ON QUALITY 1 Quality decisions QUALITY DECISIONS QUALITY MANAGEMENT OC Staff ISO Status RAW MATERIALS QUALITY Suppliers under OA Yearly audits per supplier Requested quality level AQL QUALITY IN MANUFACTURING Training expenses Seniority of workers ntrol hours uching after autocontrol Quality management NUMBER OF PEOPLE IN QUALITY STAFF Number of people performing the quality tasks not included in shop headcount SETUP AN ISO 9000 CERTIFICATION Status of ISO 9000 process Raw materials quality RAW MATERIALS QUALITY 5 of suppliers under Quality Assurance Yearly number of audits by vendor Requested Quality level AQL Lot size of raw materials received Receiving inspection active sample size for destructive receiving inspection Confid
166. t quarter taking into account the amount reserved for warranty service See the report SALES amp INVENTORY The difference between the amounts realized and decided corresponds to scrap and strikes QUANTITY SCRAPPED This is the number of units launched in production that have been refused in the final inspection QUANTITY LOST ON STRIKE This is the number of units launched in production that could not be produced due to strike action Chapter IV THE GAME S REPORTS 47 MANUFACTURING HOURS TOTAL ACTUAL HOURS This 1s the sum of hours intended to produce train production staff devoted to participation in Quality Circles amp to retouch defects found on the autocontrol and autocontrol time itself PRODUCTION Sum of quantities produced in each country multiplied by the unit time required to manufacture the product in each country This takes into account the evolution of productivity linked to the average age of machines and the impact of training and working climate within the company The unit time also varies with the volumes produced TRAINING Number of man hours spent on training QUALITY CIRCLES Number of man hours devoted to participation in Quality Circles RETOUCHING Number of man hours devoted to the correction of defects found during the self AUTOCONTROL Number of man hours devoted by a worker to control 1ts own production OVERTIME Production hours not covered by the normal work week normally 40h HOURS LOST
167. t server This server can be a local server on PC a server in your Intranet or a hosted server maintained by the creators of the simulation In this case use the URL play i bgame com This server will provide access to the database operated by the software It can enable sharing between several schools and several sessions in a session several universes and several teams The username and password received direct you automatically to your company You access the site of the game with a browser Internet as Internet Explorer Google Chrome Firefox Opera or Safari IN ALL CASES YOU INSTALLED THE SUPPLEMENT Flash Player developed by Adobe Make sure you have a recent version The game can be used on PC Mac and Android tablets It will not work on Ipad that cannot have Flash Player When connected you will see the workspace of the game Some choices will open a new tab without closing the main window of the game You can perform a shared access with multiple connections in parallel in windows on the same workstation or in different tabs or on multiple workstations BUT ONLY THE MASTER WORKSTATION ASSIGNED TO YOUR TEAM WILL BE AUTHORIZED TO UPDATE AND RECORD YOUR DATA This may be useful in the preparation phase of the game which will take place probably outside the school In the game session you will share this analysis but the final decision shall be in a position assign to the master of the team Ch
168. tacked From 2 Hoh HAK e WR Operating result x 600000 400000 D i B Ii 0 a m 200000 400000 800000 98 l Business Game User s Guide SENDING THE DECISIONS Your decisions are prepared and contain no error You have completed your work WHILE RESPECTING THE TIME LIMIT You report to the control of the game that your decisions are ready by clicking on You confirm then your decisions are then made available to the control of the game and go to status SENT Question If control of the game has not yet processed your decisions you Validate decisions for quarter 18 can cancel the sending by haai After modification you will send again your decisions When control of the game will start processing the quarterly model decisions will go into status LOCKED and will no longer be changed 2 Decisions at corporate level Stockholder management Number Current Dividend 1 5 of shares Authorized SEC Approval S0 Policy ISO status Certification was lost Cancel ISO Maximum AGL el Level of autocontrol suppliers under QC 6 Training Audits Quality circles Sales under QA 96 Quality plan Evaluation SHAREHOLDERS RELATIONS e DIVIDEND PER SHARE It is the dividend allocated in the quarter to shareholders for each share defined in US e NUMBER OF SHARES AUTHORIZED Itis the TOTAL amount of authorized shares of your company If you want to change
169. tandards defined in the Quality Plan e The level of defect in the previous quarter to the output of your production line is below a threshold unacceptable e The period of six months for preparation has passed On the menu a thumbs down on red background means you re not ready and he should probably delayed the audit The thumbs up on a green background means that the conditions are met Click the thumb to see the respect of the 4 conditions 112 I Business Game User s Guide Quality staff Number of people needed to perform the various tasks linked to decisions of your quality management To know it use the Required button and you will be informed of the necessary staff Quality staff 22 H Required 22 A y m Y Total staff ent Suppliers audits JC 40 Number of audits oy pplieurs QA 2 2 E Confidence level Receiving inspection mple Receiving inspectio Final control Quality circles ring Defects analysis 0 2 E Autocontrol level 936 y Customer claims processin a fjs Retouching B H ER Trainers ISO Management M o2 WwW fF oa a M U ow M Sales under Quality Assurance 75 46 Management ification was lost Audits planification ISO condi The number of people who will be indicated is the minimum necessary Nothing prevents you based on your plan to go beyond this recommendation If you increase the size of the staff quality the labour market may affect your ability to do so in a si
170. terms until the next quarter and be partially reimbursed without penalty FIXED PAYMENT Chapitre VI DECISIONS MAKING 107 Principal and interest are repaid by quarterly deadlines fixed e The credit amount This is the amount requested granted when opening credit e Credit Rate This is the annual rate agreed If the rate is variable it is marked with e Start This is the opening quarter of the line of credit from which money is received by the borrower e End This is the closing quarter of the credit line Full refunds will be completed if it is not already done in the following quarter By pressing the Details button you will know the detailed situation that this credit The Delete button is used to cancel a line in the status Requested or Granted and for the current quarter or subsequent quarters A credit line that has been already used cannot be cancelled TO ASK FOR AN ADDITIONAL CREDIT PRESS ON ASK A LOAN e TOTAL ACTIVE CREDITS This is the TOTAL amount of credit lines used during this quarter 7 Requesting a new credit To finance the activity of your business you have several ways e The equity capital and reserves e The long term debt e The short term borrowings For long term loans you must apply to the bank for lines of credit in one or more countries Initially in the game you have a revolving credit of 6000000 in the USA You can perform any movement on this loan borrow or repay witho
171. the ISO button as active But every time you change the content of your Quality Plan you will be obliged to get a new approval Your quality plan should be defined in coherence with your global strategy It must respect a minimum efficiency threshold to be eligible for approval zs Sales under Quality Assurance 13 46 Certification was lost Audits planification SO conditions ca ISO Plan approved e Plan respected G Measured defects 4 2 gt 3 5 55 Preparation delay The first ISO Certification is granted through a Certification Audit This Audit will check if the conditions are respected e The preparation lead time is completed e The Quality Plan is recorded having an efficiency level suitable for certification and if requested has been signed by the game controller e The Quality Decisions respect the minimum threshold imposed by the Quality Plan e The level of defects in finished goods produced in last quarter is below the acceptable threshold Chapitre III THE SIMULATION S RULES 33 Quality in procurement Suppliers under QC 96 40 Number of audits AQL 96 2 2 H Confidence level size of control sample Receiving inspection Quality in manufacturing Quality circles 0 2 H Autocontrol level 96 Training budget 2 Retouching Sales under Quality Assurance 75 Certification was lost Audits planification SO conditions 12 Pas d audit 13 Pas d audit 14 Certification 15
172. these fixed costs are only flat in a specific capacity range Those expenses are due even if the full capacity is not used They are mainly related to the shop machine maintenance The fixed overhead includes non productive people manufacturing management and some operating expenses not linked to production volume All exceptional costs as social expenses profit sharing or bonus are accounted in the real manufacturing expenses as the Quality Control overhead or scrapped products cost All those elements can lead to manufacturing variances The variable overhead costs are linked to the manufactured quantity and to the balance between domestic production and exported goods For an available capacity of 650000 units loaded with a production of 600000 units including 50000 units for French market the estimated overhead costs per unit are 1 25 1 80 1 80 for the US French and Moroccan markets When the production capacity or the production scheme changes or the real costs are different the standard cost is only an approximation of the real costs The difference is reported as MANUFACTURING VARIANCES Those standard costs are used to valorize the inventories and work in process When the production capacity or the production scheme changes or the real costs are different the standard cost is only an approximation of the real costs The difference is reported as MANUFACTURING VARIANCES These variances are linked to various
173. this authorization change the value and get the SEC approval e CURRENT NUMBER OF SHARES Itis the TOTAL amount of released shares of your company ISO POLICY Chapitre VI DECISIONS MAKING 99 You can but it is not mandatory impose to your group factories to be ISO 9000 certified You may also manage your decisions on the quality menu without implementing the ISO 9000 certification process All these decisions can be planned in a Quality Plan resulting in minimum that you impose on each of the decisions relating to quality If the ISO module is enabled and once you decide to go for ISO 9000 you will have to define what is your quality plan and have it validated This plan should be studied so that it leads you to a quality and cost consistent with your business strategy You will need some time to prepare for your first certification about 6 months and undergo a Certification Audit This period will allow you to adjust your quality staff to the tasks arising from your decisions You will set yourself the values of your plan as they should be cruising speed If you can not reach them immediately due to lack of resources ISO certification could be delayed The alternative is to change these minimum taking into account your ability to meet them Be aware that these are decisions that produce the effects not only obtaining the ISO certification TO START THE ISO 9000 CERTIFICATION PROCESS Use the button Start ISO certif
174. tity The exported quantities The manpower 14 1 Business Game User s Guide e The machine refurbishing Furthermore the available quantity for sales will depend on your production yield Manufacturing defects will imply retouching lost time scrapping Read the chapter related to Quality You will see that the Quality decisions will influence the yield Some social events and absenteeism can also lead to production losses or to a lack of productivity The productivity will also vary with people s motivation and training To produce you will need two resources e the capacity of the machines which you will be able to increase by your investments e the manpower which will be able to vary according to various factors such as the experiment the social climate the age of the machines the effects of volume 9 Manpower Your workers having a similar professional qualification are currently working 40 hours weekly Therefore at each quarter the manpower availability is 480 hours per man The overtime allows you today to get an additional activity of 20 However you cannot exceed the quantity corresponding to the shop capacity but only produce more without hiring people You will find in next pages the hourly cost rate and the supplement for overtime You can adapt your manpower level to your manufacturing plan hiring people or deciding on layoffs This will be limited by the labor market conditions which can vary a
175. tment Hypothesis COMPUTED ROI Project 1 4 Name Number of iterations 14 NPV net present value 1013360 Project 1 IRR internal rate of rentability 17 95 Payback after 16 quarters me Add Compare E Balance Net present value Project 2 P 4 Settings Yearly cost of capital 96 5000000 Investment unit cost 30 l 4000000 Fixed cost per investment 100000 3000000 Investments 2000000 12 a 34000005 1900000 14 e 80000 E 25000005 9 B 1000000 y Expected sales des Volume 100000 i y lt gt 3000000 T Unit margin 4000000 Volume 80000 l ex 5000000 s F Unit margin E ba E 6000000 You will have to show the expected return on the time range when your investment will bring additional margin To compare the profitability of these various assumptions you have a model of DISCOUNTED CASH FLOW You record your investment plan e new capacity and quarter in which this capacity is installed e expected additional sales quantity quarters range net margin per unit IN LOCAL CURRENCY and country of sale Based on a discount rate you choose the program will calculate the net present value of profit arising out of your plan NPV NET PRESENT VALUE and INTERNAL RATE OF RETURN IRR ie the discount rate which set the net present value to zero 150 l Business Game User s Guide The calculation of IRR is made by iterations It could stop after
176. to the control of the game the policy you intend to follow to achieve your goals in the areas e COMMERCIAL pricing advertising R amp D distribution e PRODUCTION investments storage e FINANCE method of financing dividends e QUALITY materials QA control e PERSONNEL hiring wages social For this you will analyze the past and define with your TEAM your future strategy and plans that support it before the end of the quarter 12 Remember that to achieve your goals it will require a balance between all your businesses and in particular ensure the quality and personnel management policy Some criteria so that your strategy is well thought e The strategy must provide for a medium to long term without neglecting the actions you have to lead quickly to start to apply your policy e Your strategy should give an overview of your policies in various areas of your management process e We should find the actions you plan to do WHAT but as far as possible with a quantification HOW MUCH and positioning in time WHEN e If possible consider alternatives especially to be able to respond to the strategy of your competitors and thus counter the risks that you perceive Strategy document r mz Download Word template j E Download Powerpoint template You havent uploaded any strategy document Upload a new document Upload Close 96 1 Business Game User s Guide VI DECISIONS MAKING 1 Decisions data e
177. ts location world country You have a column for each quarter By selecting one or more variables it is easy to insert graphics You can also enter formulas to create your indicators and your dashboard or perform your analysis Chapitre VII USING THE PROGRAM 141 F Business graphics The graphs of 1 Business Game come from various sources e Inthe workspace e Graphs on decisions e Graphs from reports e Graphs from data base e In popup windows e The ranking and score The values of the objectives The benchmarking between teams Quantitative methods forecasts correlations The discounted cash flow ROT Some specific graphs will be explained while describing the pop up windows Click on icon DECISIONS P ETE r3 Sa E da SC to display meer Advertising budget the graph Distribution network Distributor margin Use shift Sales force key to Sales bonus Previous sales 610091 cumulate items Ta ez Send back to factory lt Sales plan me L a Move the couman JC Y From 2 Ere 12 EZ triple bar hudort 2E 380000 up down to 300000 340000 adjust the MON 300000 size of graph pm 260000 240000 220000 200000 Check the 100000 160000 box to 140000 El i J display the 1 data table Click to close the graph Graphs related to decisions are selected from the decisions menus When moving the mouse on
178. tured This value corresponds to the value at quarter s beginning when the exchange rate is re evaluated e The net result change linked to the revaluation of inventory is Revaluation value in local currency old rate 1 x inventory value at quarter beginning in local currency new rate e The exchange difference will appear in the net result of the subsidiary On consolidated results it will be offset by the revaluation of the subsidiary net value in the headquarters accounts e The value of AFFILIATED COMPANIES in the last quarter balance sheet of the headquarters represents a value in foreign currencies In case of revaluation that will generate a profit or a loss in the headquarters account multiplied by the ratio between new and old exchange rate 4 Evolution of reserves amp retained income RETAINED INCOME Net income after tax Income from affiliates Transfer of Money transfer realized Dividend paid Inventories restatement Begin retained income Change of income retained End retained income This report shows the evolution of the company s net value and for its affiliates Some figures are only related to headquarters They are marked with H For values only related to foreign subsidiaries F NET INCOME AFTER TAX 1 Equal to item 10 of NET INCOME report INCOME FROM AFFILIATED COMPANIES H 2 Total of Income retained values of affiliated companies translated with current currency rates TRANSFER O
179. ty Final raw materials unit cost MANUFACTURING STANDARDS HOURS PLANNED PER PRODUCED UNIT Working time planned to be spent by direct people to produce one unit intended for each market The displayed value is the standard value but can be influenced by other factors as training or motivation and volume but these additional influences are not reported in these figures STANDARD COST Working time planned to be spent by direct people to produce one unit intended for each market The displayed value is the standard value but can be influenced by other factors as training or motivation and volume but these additional influences are not reported in these figures Standard cost manpower Chapter IV THE GAME S REPORTS 49 Manpower cost included in standard cost STANDARD COST MATERIALS Raw materials cost included in standard cost STANDARD COST OVERHEAD Manufacturing overhead included in standard cost management energy amortization PRODUCTIVITY Average machines age 4 37 Productivity ratio 1 044 Actual hours by unit 0 531 h 0 637 h 0 743 h PRODUCTIVITY AVERAGE MACHINES AGE It is the average age of all the machine shop equipment in year and fraction of year You can influence it through investment in capacity and refurbishing plan PRODUCTIVITY RATIO Manufacturing overhead included in standard cost ACTUAL HOURS BY UNIT Working time spent by direct people to produce one unit intended for each market taking into accou
180. ty available for this guarantee RE EXPORTED FINISHED GOODS 5 It is in a foreign subsidiary the quantity picked from the stock to be returned to the headquarter INVENTORY AT QUARTER S END 6 Remaining in stock 1 2 3 4 5 Chapter IV THE GAME S REPORTS 43 WORK IN PROCESS 7 Quantity produced and exported during the quarter that will be available for sale the next quarter QUANTITY RESERVED FOR WARRANTY 8 Amount to be levied on PRIORITY from available inventory to replace defective products sold to customers GOODS IMPORTED BACK 9 In the U S it is the quantity shipped by foreign affiliates AVAILABLE FOR SALE IN THE NEXT QUARTER 10 is equal to 6 7 8 9 When you define your Sales Plan to a simulation calculation the expected sales will be limited to that quantity 3 Marketing indicators MARKETING INDICATORS USA France Morocco Market share 16 34 0 00 Market share on turnower 16 00 0 00 Price Quality ratio 0 78 Customer fidelity 29 37 Marketing mix efficiency 16 33 Product positionning 604 Network efficiency 1 36 1 3650 Unit cost for distribution 3 20 Export performance Lost sales by overpricing 0 00 Inventory turnover 1 1 00 MARKET SHARE IN VOLUME Market share globally and in each country calculated on the basis of units sold MARKET SHARE IN SALES TURNOVER Market share globally and in each country calculated on the basis of sales values
181. uage used in your browser If you cannot make it work check your Internet connection and the availability of Flash Player Each participant received a User ID usually email address and password In his profile was recorded that his language used by default This personnel account will provide access in read only mode to all functions of consultation and analysis but it will not give access to functions as updating decisions data and getting simulation results Each team will receive a Team master account with a username and a password known by its members Except in the preparation phase this account only will be able update decisions and simulation results One single session could be open with the same account The program will memorize the last Userid used yo access to the Game If you stay in the same browser session the next connection will give automatically access to the same userid and the same language To use another account or another language close and reopen the browser session and access again to play i bgame com Type your Userid amp your password amp click on Enter You will this the welcome menu Welcome to i Business Game I Business Game Welcome Winston CHURCHILL 3 You are playing in universe 1 wersity ELLO w June2013 Picture You are logged on read only mode E mail Current quarter is 12 wcQdowningstreetuk Your due tasks are First name Winston p o Setteam s objectives Lastname CHU
182. ucts whose unit cost will have been optimized 2 Manpower cost Currently each worker performs 480 hours per quarter equal to 12 weeks with 40 working hour per week The average hour rate is 9 The direct cost for a normal presence is therefore 4320 for a quarter The overtime hours are paid with a bonus of 50 13 5 The hiring cost and layoff charges are respectively 2000 and 500 IF YOU USE THE PERSONNEL MANAGEMENT MODULE In this case the hourly cost includes the basic salary This level will vary with the decided general increases or the merit increases The starting level is 7 33 You must add the social charges which are 28 5 Then the average salary cost is 8 92 This salary varies with the age and the coefficient related to the age classes are displayed in the age pyramid in the social report Your hiring policy will therefore influence the average hourly cost The other salary components as bonus or profit sharing will not affect the standard cost and will be accounted for in the manufacturing variances Chapitre II THE SIMULATION S RULES 21 3 Manufacturing overhead They include a fixed component and variable component of production overhead costs The fixed overhead include e depreciation e overhead linked to production capacity e miscellaneous production expenses Costs Variance Variable costs Fixed costs Production In fact the measured overheads in the past show that
183. ultation with the objectives of your competitors Objectives Indicators Ranking Priority N Objective Weight Optimization Based on Top 1 Earning per share 2 Maximum value Last quarter 2 2 Return on equity 2 Maximum value Last quarter 3 3 Company market value 2 Maximum value Last quarter E 5 Profit over turnover 3 Maximum value Last four quarters E 6 Worldwide market share 3 Maximum value Last quarter 6 8 Sales plan accuracy 1 Minimum value Average since quarter 12 rj 14 Inventory turnover 1 Minimum value Average since quarter 12 8 17 Retained earnings 2 Maximum value Variation since quarter 12 9 25 Satisfaction of personnel 1 Maximum value Last four quarters Bottom 31 Quality cost vs sales 1 Minimum value Average since quarter 12 1 Objectives The example shown is not obligatory the list of objectives for your session This list of goals is imposed You will assign a priority to each goal and you will have to follow them throughout the game TO CHANGE THE PRIORITY OF YOUR GOALS 12 quarter only The objectives are displayed in descending order of priority If you want to change the order click the associated target line and keeping the mouse button down mount the line up or the line down and release the button to drop the target to the level desired drag amp drop To chose them analyze deeply the meaning of classification criteria Adopt and stick to a policy that meet
184. unit cost of purchased raw materials for each country including the basic price the influence of quality and the impact of volumes This unit cost is used to evaluate the manufacturing variances and the treasury moves 4 Manufacturing indicators Indicators n E PRODUCTION INDICATORS e Machines workload rate Usage ratio of normal hours Overcost on overtime Productivity Defects in finished goods USAGE OF PLANT CAPACITY of machines capacity used during this quarter OF USAGE OF MANPOWER CAPACITY of the normal available labour hours used in this quarter OVERTIME Overtime hours compared to normal hours PRODUCTIVITY RATIO This is the coefficient resulting from the aging of machines As you get older they require more setup time so more manpower FINAL DEFECTS RATE Of defective products out of production taken into account in assessing compliance with ISO certification REMARK ON THE SIMULATION Utilization rates shown for the quarters simulated may be approximate since the simulations renew elements of the previous quarter defects level productivity effect the volume 52 l Business Game User s Guide D REPORTS ON HUMAN RESOURCES 1 Human resources decisions HUMAN RESOURCES DECISIONS LABOUR TIME Working week Vacation weeks COMPENSATION POLICY General wages increase Merit increase of merit increase Profit sharing on earnings Bonus SOCIAL POLICIES EMPLOYE
185. unt the social events to find the necessary workforce see production report Department quality staff is not included in this number MAINTENANCE CAPACITY REFURBISHED It is the amount of machine capacity units being renovated in the quarter The age is reset to zero 46 l Business Game User s Guide 2 Manufacturing report Report PRODUCTION REPORT MILL ERA AAA USA France Morocco QUARTERLY PRODUCTION Total production decided 600000 Production decided Morocco 450000 120000 Total actual production Actual production Morocco 118581 Scrapping of finished goods Moroc 1077 Prod lost on strikes Morocco 13 342 MANUFACTURING HOURS Total manufacturing hours Total achieved hours Training hours Quality Circle hours Hours for retouching Autocontrol hours Overtime Hours lost Normal available hours Total available hours WORKLOAD OF MANUFACTURING Machines workload rate Usage ratio of normal hours Overcost on overtime Usage ratio of total hours QUARTERLY PRODUCTION TOTAL LAUNCHED This is the total amount determined for all countries QUANTITY LAUNCHED BY COUNTRY This is the amount decided for each country to be available for sale in next quarter ACTUAL PRODUCTION This is the total of finished goods completed for all countries PRODUCED BY COUNTRY Number of successful finished goods for the domestic market and export These quantities will be available for sale in the nex
186. untry where the credit is granted Prime rate is displayed in marketing report When negotiating another credit line with the banker he could impose a time limit for the credit line The financial charges coming from the loans Short term and long term are paid in the next quarter At start of the game your credit line is 6 000 000 in USA without time limit Beyond this credit line you must negotiate other credit lines with the banker e Ifthe Finance module is active you will have to choose between four types of credits 1 revolving You can at each quarter execute all the moves reimbursement or money calls while the total net result of the move remains inside the allowed amount Then no negotiation is needed since you stay inside this credit allowance Rate of loan will be variable varying with market prime rate 2 Repayment at term you get the whole amount of loan in credit opening quarter This amount will have to be reimbursed in the quarter following the credit quarter limit Nevertheless paying a slightly higher rate you could get the right for early reimbursement partial or total Then the reimbursement will be irreversible 3 Free repayment free but irreversible you will get the total amount while opening the credit the last reimbursement for the balance being due in the quarter following the end of the credit Partial reimbursements are possible without penalty 4 Fixed payments the reimburs
187. urnover jj 20 00 19 00 17 00 15 00 15 00 12 00 Approximate sales price fp 12 75 12 75 12 75 12 75 12 75 12 7 Approximated publicity bud Lig 196000 164000 194000 169000 191000 167000 Approximated R amp D iil 3000005 2820005 3060005 3060005 2790005 29100 ISO Status Not requested Not requested Not requested Not requested Not requested Not request The marketing reports are common to all teams They show sometimes approximately the status of markets and for all competitors in the three markets DISTRIBUTION Type of distribution network used by the company this may be e Wholesalers e Exclusive agents e Own network SALES units Approximate quantity sold by the company LOST SALES units Quantity of sales that the company has lost due to shortage of products available for sales The global market and your competitive position should allow you to sell more Or your sales price is too high and your clients are decreasing their purchased quantities MARKET SHARE of sales Approximate market share in units in TURNOVER Approximate sales turnover in local currency MARKET SHARE turnover Approximate market share value in SALES PRICE Real current price in local currency 88 l Business Game User s Guide ADVERTISING Approximate advertising budget in local currency R amp D Approximate Research amp Development expenses in the headquarters budget in US Although this expense is
188. ut the total borrowed exceeding the credit line which was given you If you want to expand or open a new credit line you have to ask the banker who will ask for justification e Objectives e How to use borrowed funds e Financial analysis of the company e Return on investment When you enter your decisions in a level of borrowing that carries them beyond the granted level the program will signal the anomaly You can without waiting for contact with the banker apply for new credit line It will be accepted by the machine allowing you to perform simulations result with the level of borrowing planned HOWEVER THIS CREDIT REQUEST WILL BE TAKEN INTO ACCOUNT BY THE MODEL AFTER APPROVAL OF THE BANKER OTHERWISE IT WILL BE CANCELLED 108 l Business Game User s Guide General information Status Requested Duration months Current prime rate Country USA Start quarter 1 Long term debt ratio Quarter for ie 16 Short term debt ratio Amount 1800000 Loan mode and duration ncimbursment Went 36m ttm Gam 2 Revolving Yes 95 9 9 5 Repayment at term No Free repayment No Fixed payments Changes on the rate Anticipated repayment allowed A Bonus on rate for capacity investment 0 i gt Loan s rate 8 5 scheduled payments 12 1800000 8 0 1800000 0 1600000 O 36000 36000 36000 E 36000 You have requested a new credit line in this displayed country e Select the country e Enter the amount in th
189. vailability for sales The total exported quantities cannot obviously pass beyond the total manufactured quantity On the other hand you can decrease your available inventory in foreign subsidiaries by exporting these quantities back to the domestic market They will be available for sales in next quarter Then they will be accounted in the domestic inventory for sales on next quarter but the standard cost difference between the foreign and the local products will be charged to Profit and Loss in the account LOSS ON RE IMPORTED QUANTITIES The shipment costs are always paid by the headquarters The current level is 0 25 per unit To import the products in the foreign country you must pay import fees currently 0 2 euro or 0 8 dirham per unit They are charged to the foreign subsidiary and cannot be recovered in case of re importing some products In the reports the FINISH GOODS and WORK IN PROCESS are valorised at actual standard cost of the quarter The FINISHED GOODS inventories imply warehousing charges that can represent 10 to 20 of the value of goods over one full year This rate includes the warehouse itself and the inventory administration Beyond a certain threshold this rate can be much higher because you will be obliged to rent additional warehouses Those critical levels are around o 375000 units for USA o 35000 units for FRANCE or MOROCCO B COSTS This section explains the calculation rules of several cost
190. xt quarter A good financial planning using the simulation tool and a spreadsheet will help you to optimize your treasury level 5 Financial investments If you have unemployed treasury you can make financial investments at a rate generally 1 5 below the local prime rate The financial income related to these investments is credited to the next quarter results The rates can vary from one to another country and for the different quarter A good survey will allow you to take advantage of some opportunities 6 Tax on company s income 28 l Business Game User s Guide The tax on company income is currently e 48 in USA e 40 in France e 30 in Morocco This rate is applied on net income before tax The tax is due in each quarter generating the income and therefore will be reported as a debt in the Balance sheet but the reimbursement will be made on the next quarter A negative income will obviously generate no tax but gives tax credit 7 Company s shares A company can release new shares to finance its activity It will be also possible to buy back their own shares but all those moves will be submitted to the following rules e afee of 5 of the total value of the operation is taken as a commission e the quarter amount of shares trade is limited This limit can reflect the market capacity to absorb your new shares or to offer the amount of shares you want to buy back e Releasing new shares is limited by the authoriz
191. you can use an EARLY RETIREMENT policy if you use people who meet the age conditions of 55 You can also try to put emphasis VOLUNTARY DEPARTURES giving some financial incentives Finally you will have to decide LAYOFFS which meet the possible regulations constraints You also can to compensate or not the natural departures as retirement or resignation 36 l Business Game User s Guide All those headcount decreases are expensive and a better planning and a motivating policy would help you avoid to use these extreme decisions COMPANY S HEALTH COMPETITORS COMPENSATION POLICY LABOUR CONDITIONS EMPLOYMENT SAFETY PERSONNEL Unionized people rate Productivity Claims Turnover Absenteeism The overall social policy will be translated in a social climate motivation unionized personnel unions influence absenteeism turnover and over a threshold to personnel claims and strikes The personnel claims can be global or more focused on employment security salary policy or working conditions Working in a healthy company which invests which respect both shareholders and personnel interests will improve the climate and indirectly your results During every quarter The Social Report the pyramid of age and the report on CLAIMS will inform you about your personnel s behaviour Age pyramid HUMAN RESOURCES AGING PROFILE Age range Number br Salary coefficient 20 30 190 29 0 76 190

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