Appendix2_E_GM2_12_0
Contents
1. 6 Group work Analysis of results Decisions for Period 7 Group work results General game Conclusion analysis of 1 4 Special Events During the Game During the game you can launch some events in order to create additional challenges or provide more support for the participants Whether you use them or not depends on the characteristics of the particular game Some Proposals 10 11 12 Strike influenza epidemic Decrease production capacity person New competitors Cut into the company s market share Increase in possible quantity and costs of dismissals Increase maximum number of dismissals e g 500 along with an increase in dismissal costs about 30 thEuro Mandate severance packages Reduction of unnecessary manufacturing capacity in the industry The difference whether it be a loss or gain between the net book value and the proceeds from sales of machines will be entered as extraordinary income by the instructor News from the Department of Labor Increase minimum rate for supplementary personnel expenses to 45 Pension protection Increase the percentage contributed to pension reserves e g from 6 up to 8 Decreased prices for input materials parts as a special offer in one period e g decrease of 20 In the period in which Product 1 is newly launched you as the simulation facilitator may buy the remaining stock of Product 1 old as a foreign customer for a special price fo2. Increases in The costs of input materials parts 3 Wages and salaries 5 Other variable costs of production because the company is now obliged to take back old copiers Product 1 now 100 Euro unit Product 2 now 250 Euro unit Renovating the administration building costs the company 3 0 mEuro Should bulk buyers be supplied 4000 units at 2975 Euro Increase of wages and salaries over 8 periods Wages and salaries total costs in Period 0 Wages and salaries of production staff total costs in Period 0 Decrease in the exchange rate TOPSIM General Management II Instructor s Manual Appendix II Product 1 Market 1 3 Product 1 Market 2 50 Exchange rate 1 40 Taxes 55 Received from customers in the current period 75 Product 1 Market 1 Product 1 Market 2 Product 2 Market 1 5 33 60 Exchange rate 1 35 Taxes 55 Received from customers in the current period 85 Product 1 Market 1 2 0 Product 1 Market 2 17 5 Product 2 Market 1 50 0 Product 2 Market 2 75 Exchange rate 1 30 Taxes 55 Received from customers in the current period 85 16 49 34 13 Page 19 Evaluation of Market Results Please use Instructor s Reports and Il Examples INSTRUCTOR S REPORT I MARKET RESULTS MARKET Old ADVERTISING
3. Disadvantage It is influenced not only by the participants own abilities but also by the behavior of competitors With games running parallel to one another the current situations in the other games play a large role It can be that a group in a game made substantial errors from which the others profit In another market it can be that the groups engage in a merciless price war which dilutes all gains b Success value a term used specifically in the game to demonstrate the degree of the company s success measured by the company s profitability and planning accuracy A high degree of planning accuracy a minimum number of out of line situations shows an understanding of how decisions are related how to plan for the long term how to anticipate the actions of competitors and how to use the reports available Taking planning accuracy into account as a measure of success tempers the emphasis on profits c The share price of the company is significant as it reflects the value of the company and encompasses several important factors TOPSIM General Management Il Instructor s Manual Appendix II Page 11 1 7 Management Simulation Preparation Checklist This checklist applies particularly to the facilitation of management simulations executed in special conference spaces e g seminars run in hotels possibly in a network and not in an environment in which the planning game has been permanently installed RSP Onoaanrwn a
4. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 e Laser printer Minimum of 500 pages paper Back up toner Cable to connect computer to printer Transparencies for laser printer Power bar Seminar facilitator s computer with planning game already installed Backup computer Seminar facilitator system installation diskette 2 backup copies User system installation diskette and backup copy Transfer diskettes if the seminars are taking place in different rooms without computers networks Ensure that the period in which the planning model should be available was correctly identified during initialization Blank diskettes LCD Display Projector Laser pointer Overhead projector and back up lamps Reports for the users describing the initial situation Copies of handouts describing the scenario for the seminar Copies of decision sheets Copies of instruction materials Instruction materials documents Materials documents to introduce the seminar Copies Checklist for first periods goals strategies shareholders meeting group projects Felt tip pens Overhead projector transparencies Flipchart Colored note cards to write on or post on the board Office materials folder fasteners hole punch etc Blackboard White board Camera and film Video camera and videocassettes Seminar facilitator s manual Calculator Aspirin TOPSIM General Management Il In
5. Group work with the simu Analysis of results Discussion of different ways to proceed and measure results lation model Coming to decisions and testing them on the computer Instructor s Guidance of group Simulation of period results Instructor led teaching Session Discussion Group work with qualita tive tasks Presentation techniques E g Conception and implementation of branding concepts Holistic thinking with GAMMA Role playing Preparation of presentation s General The groups present their evaluation results Summary of The instructor presents the game overall result Normally between 4 and 8 periods are simulated over a period of 2 to 5 days TOPSIM General Management Il Instructor s Manual Appendix II Page 1 1 2 Flow of Instructor s and Teams Activities Instructor Become acquainted Teams with their company and the rules of the game by using the The instructor introduces the planning game participants manual using the introductory transparencies Decision sheets and economic predictions for the 1st period are provided to teams Eo o ooo Different ways to proceed and to measure results are discussed Teams come to decisions and complete the decision sheets 1st period Teams decisions are entered the period is simulated and results reports are edited Instructor led discussion of the results teaching s
6. in the lower part of the report entitled Production Lines Environmental Technology The ratings of the machines themselves can only be improved by purchasing new production lines with better ratings to replace the ones with poor ratings e Our production volume of Product 1 was equal to the capacity of our production lines but the utilization of the lines was only at 90 This question typically arises when Product 1 new is launched Product 1 new only needs 90 of the capacity units required for Product 1 old Miscellaneous A firm has practically failed and continues to compete against the others in order to spoil the market for the others Possible solution A member from the team with the top company can be assigned as the new chairman of the board of the failing company This can result in a high learning curve for participants Or The company can be declared bankrupt and the instructor can switch the company off so that it is no longer active in the simulation More Technical Information Transfer of the participants decisions The decisions of the participants are read by the instructor s system from a floppy disk or from the network but are not shown in the instructor s decisions form Most probable reason The instructor s system already simulated the period before the decisions were read refer to the information line The program does this by reading the user system s preset decision data for the following pe
7. session Organization of group work and decisions Period 1 Group work Analysis of results Period 1 Marketing Plenary session Decisions Establishing goals Lecture discussion on topic of contribution margin Plenary session Decisions Period 3 Contribution margin Reports available New product development P1 new Group work Creating marketing concepts for Copy New Group work Presentation Plenary session Analysis of results and Decisions for Period 4 strategies for the 8 periods Planning Model 1 available Group work Market 2 opened Group work Introduction to principles of Problem solving using method holistic thinking Plenary session of holistic thinking on computer Plenary session and group work Page 5 Lecture discussion on topic of Financial Accounting P L Balance sheets Financial statements Plenary session Analysis of results Period 4 Plenary Decisions Period 5 Planning Model Il possibly available Group work Lecture discussion On topic of human relations factors of cooperation Plenary session Analysis of results Period 5 Lecture discussion Economic and investment calculations Plenary session Analysis of results Period 7 Plenary Decisions Period 8 Group work Preparation of Stockholders meeting Group work Stockholders meeting Plenary Decisions for Period The groups present their
8. 0 minutes to create the company s brand Plenary session Presentation of the concepts developed Branding concepts are evaluated by the participants Each participant has his her own grading sheet to evaluate all teams except for his her own The seminar facilitator collects the results and enters market share corrections for the next period Afterwards the instructor evaluates the groups results and if possible the evaluation is conducted by an external expert Professional Stock Broker Purpose Execution a b c Each participant is encouraged to examine the situation as well as the scope of their own company and that of their competitors This approach forces them to make a detailed analysis Once Period 4 has been completed Presentation of the task Each participant receives 5mEuro imaginary to be invested in shares of any companies in the game The company that is the most attractive to investors wins the Company of the Year award and receives 2 mEuro in Extraordinary Income A tangible prize might also be awarded e g 20 bottles wine In any case the prize must be attractive another example everyone can put cash into a pot which is then granted to the winner Each participant is provided with reports on each company Participants can make use of reports that inform on the overall results market research reports and reports on the industry 15 minutes is the allotted time for examining repor
9. 5 MarketRiskPrem amp x 5 5 The RMS penalty Long Term Corporate is set at 2096 Loan Preferred Interest Company Beta Factor Rate c5 10 0 100 100 1 00 100 100 Planning Quality Value per Index Point mEUR 0 5 Active From Period 0 isl Print X Cancel Help Reduce the interest rate on loans from 13 0 96 to 8 and the RMS penalty from 20 to 0 TOPSIM General Management II Instructor s Manual Appendix II Page 14 Modification of decisions IBl x Company 1g Period p Sales Product Development Purchasing Production Financing Planned Figures Purchasin Product 1 Input Materials Parts Units 30000 Set the amount to be purchased to 0 Production Product 1 Production Volume Units 40000 Production Lines Type A Type B Type C Investment Number of New Lines 0 0 0 Disinvestment Number of the Line Maintenance mEURiLine 15 0 0 0 0 Rationalization mEUR Line 0 0 Process Optimization mEUR 0 0 Training mEUR 05 Investm in Env Plants 1 5 ur Staff Prod Staff Hired Dism Costs Isl Print X Cancel 7 Help Recommendation Save such settings either as a game version see File menu current simulation state should be saved as a version or on disk so that you can call it up quickly if needed L5 DRE lol B x Company 15 Period 0 Sales Product Development Purchasing Production Financing Planned Fi
10. SALES REVENUES POTENTIAL SALES RESULTS New co PRICE Rel EUR FCU mEUR Factor Units mEUR Units PRODUCT 1 N d 3050 4 0 12 5 353 30598 12 4 93 32 I3 1 28815 4145 MARKET 1 N 2 2798 7 0 21 9 5 1 62402 25 2 174 60 24 5 62402 24 8 N 9 2730 9 0 28 1 52 65178 26 3 177 94 24 9 75978 30 2 Oo 4 3000 6 0 18 8 4 5 45146 18 2 135 44 19 0 42555 16 9 Oo 5 3000 6 0 18 8 4 5 44208 17 9 132 62 18 6 41671 16 6 o S 2884 32 0 100 0 4 5 247532 100 0 713 92 100 0 251421 100 0 PRODUCT 1 N i 2300 1 0 22 2 3 2 16912 TRA 52 51 79 2 3810 6 1 MARKET 2 N 2 2098 2 5 55 6 6 5 4860 22 3 13 76 20 8 35101 56 0 N 3 2030 1 0 22 2 2 9 0 0 0 0 00 0 0 23799 38 0 Oo 4 0 0 0 0 0 5 0 0 0 0 0 00 0 0 0 0 0 Oo 5 0 0 0 0 0 5 0 0 0 0 0 00 0 0 0 0 0 o S 2255 4 5 100 0 EPI 21772 100 0 66 28 100 0 62710 100 0 PRODUCT 2 1 9900 2 0 52V 4 5 3500 31 8 34 65 93359 6140 21 8 MARKET 1 2 9000 05 14 3 255 2500 22 22 50 21 6 8387 38 0 3 9360 1 0 28 6 31 5000 45 5 46 80 45 0 7555 34 2 4 0 0 0 0 0 5 0 0 0 0 0 00 0 0 0 0 0 5 0 0 0 0 0 5 0 0 0 0 0 00 0 0 0 0 0 9 8 9450 3 5 100 0 6 7 11000 100 0 103 95 100 0 22082 100 0 PRODUCT 2 1 7300 2 0 66 7 5 5 0 0 0 0 00 0 0 6020 40 2 MARKET 2 2 6850 0 25 16 7 247 0 0 0 0 00 0 0 7133 5T 3 7200 0 5 16 7 2 8 0 0 0 0 00 0 0 1218 8 1 4 0 0 0 0 0 5 0 0 0 0 0 00 0 0 0 0 0 5 0 0 0 0 0 5 0 0 0 0 0 00 0 0 0 0 0 S 0 3 0 100 0 7 0 0 0 0 0 00 0 0 14971 100 0 CUSTOMER SATISFACTION Company Company 2 Company 3 Company 4 Company 5 P
11. amp Development Note on the technology and ecology indices at the launch of Product 2 The initial technology and ecology ratings for Product 2 are based on its development see the initial values specified that determine the impact of these factors R amp D personnel R amp D personnel may be re allocated without incurring costs for recruitment or dismissals TOPSIM General Management Il Instructor s Manual Appendix II Page 24 7 3 7 4 Sales Important note on Product 1 Supplying bulk buyers and fulfilling contracts won by submitting bids take priority over supplying Market 1 For example a company can easily get itself into the position of not being able to supply Market 1 as a result of not producing enough and being obligated to supply bulk buyers and fulfil contract obligations first Note on requests for bids tenders Contracts won involve supplying Product 1 new if it has already been launched on the market It is not possible to simply clear out Product 1 old from the company s inventory The bid price may not be higher than the price for Product 1 in Market 1 By chance two companies have comparable prices advertising expenses sales forces Cl and product attributes in a period and neither of these companies is incapable of supplying its markets Nevertheless one company will sell more than the other Reason Different environmental ratings of production lines also have an effect on market share Planni
12. dex Period Cumul ndex PRODUCT 1 old 1 0 0 2 05 6 0 0 10 5 09 2 0 0 9 0 05 4 2 1 6 6 2 Tsz 0 0 935 07 7 1 0 6 0 04 2 3 Led 6 6 1 6 0 0 10 0 08 5 0 5 4 5 03 6 4 1 8 9 7 252 245 2245 17 0 1 0 8 0 07 1 5 1 8 9 7 272 225 2295 17 0 1 0 8 0 07 1 o S 6 3 85 3 0 6 5 0 75 0 11 9 3 5 35 5 05 5 PRODUCT 1 new di 0 0 3 2 05 6 0 0 10 5 09 2 0 0 9 0 05 4 2 1 6 6 2 122 0 0 9 5 07 7 0 6 0 04 2 3 1 1 6 6 1 6 0 0 10 0 08 5 055 4 5 03 6 4 0 0 6 0 85 0 0 0 1 5 45 0 0 0 0 0 90 0 5 0 0 6 0 85 0 0 0 1 5 45 0 0 0 0 0 90 0 9 S 2 6 58 0 99 7 0 0 33 0 83 1 55 1955 98 6 PRODUCT 2 1 4 8 2251 105 8 0 5 9 5 102 7 0 5 4 5 102 3 2 2 18 0 101 2 970 9 0 101 8 0 3 0 100 0 3 3 24 17 8 101 0 3 0 9 0 101 8 0 0 0 0 90 0 4 0 0 8 0 80 0 0 0 3 0 45 0 0 0 0 0 90 0 5 0 0 8 0 80 0 0 0 3 0 45 0 0 0 0 0 90 0 o S 1122 74 0 93 6 635 3325 19 2 35 TB 94 5 SALES MARKET 1 MARKET 2 CO Number of people Functional factor Number of people Functional factor 1 112 2 120 3 135 4 100 5 100 S 567 PRODUCTION Ration Production lines Env ind Cumul Envir Damage Env Tax Avail Utilization ENVIRONM CO Cumul Type A Type B Type C of line expend reduct indica n per capac Lines Staff PLANTS 1 9 0 1 0 2 91 7 4 5 2 4 94 1 1 2 59389 99 9 97 2 2 6 0 0 0 3 95 0 1 5 1 0 96 0 0 8 66880 99 9 98 5 3 1 0 2 0 2 88 2 5 0 2 5 90 7 232 66386 97 9 100 0 4 0 0 4 0 0 76 5 12 0 4 5 81 0 9 0 40180 99 6 99 2 5 0 0 4 0 0 76 5 12 0 4 5 81 0 9 0 40180 99 6 99 2 PRODUCTION Production staff Train
13. epreciation e Extraordinary depreciation scrapped production lines e Planned production versus actual production For example e Planned High sales volume and high production volume therefore high marketing mix expenses e Reality There is insufficient production staff and therefore insufficient capacity to supply TOPSIM General Management Il Instructor s Manual Appendix II Page 22 Notes on Data Security You are advised to copy the data from the period onto a disk after each period and always back up the data from the instructor s system To do this you must put a formatted disk into the disk drive Select the File menu and click on Save actual score on data medium Do not forget to write the period number on the disk If your computer malfunctions during the seminar then you can resume the game on another computer by installing the planning game there and using the data from the backup diskette For this select the command Read External Data Version from the File menu The data from the data version diskette will take precedence Also participants transfer diskettes save the position of the game completely and may also be used as backup diskettes TOPSIM General Management Il Instructor s Manual Appendix II Page 23 7 1 7 2 Hotline Questions Inventory Production Inventory of input materials The amount of input materials parts used in production does not correspond to the number o
14. ession Decision sheets for the next period are provided to teams Diskettes or a network can be used to transfer Next period data Economic predictions for the next period are also provided to teams Different ways to proceed and to measure results are discussed Teams come to decisions and complete decision sheets or enter decisions A using the participants system Teams decisions are ie SE n simulated and results 020 reports are edited Decisions sheets or diskette are given to the instructor Instructor led discussion of the results teaching session TOPSIM General Management Il Instructor s Manual Appendix II Page 2 1 3 Seminar Agendas Duration of seminar 3 days normal Seminar Corporate Business Management Cost Orientated Economic Thinking Day 1 Welcome and Introduction Discussion The company as a holistic system Plenary session Introduction to the planning game model Organization of group work and decisions for Period 1 Group work Lecture discussion Principles of accounting Cost type accounting Cost center accounting Unit of output costing Plenary session Analysis of results Period 1 Plenary session Decisions Period 2 Determining goals and strategies for future periods Group work Day 2 Lecture discussion Product costing Contribution costing and opportunity costs Plenary session Analysis of results Period 2 Plenary se
15. f manufactured units Units of input materials used in production Production Volume units 100 Value Analysis Index Production lines Despite that production lines may be of the same type they are different with respect to their capacities and the amount of environmental damage they cause Maintenance If maintenance of the production lines is at the normal level in one period the capacity of the production lines is also at the normal level despite that the maintenance level may have been lowered in a previous period Therefore lowering the level of maintenance has no after effect Overtime For overtime of production lines and or production staff additional costs of 2 5 mEuro per period to cover supervision and operations are incurred step fixed costs on overtime In addition there is an overtime premium of 25 due to additional wages and salary costs that arise in the periods in which overtime occurs These costs are entered in the cost accounts Environmental technology By investing in environmental technology the total damage caused by a company can be reduced The environment ratings of the production lines themselves can only be improved by replacing lines Guidelines 1 5 mEUR 1 point improvement 2 5 mEUR 2 points 10 mEUR 3 5 points 15 mEUR 6 points Environmental tax Guidelines Index 98 Tax 0 5 mEUR Index 95 Tax 1 mEUR Index 90 Tax 2 5 mEUR Index 85 Tax 5 mEUR Product Development Research
16. fe cycle Cost benefit or NPV calculation Received from customers in Drastic increase of transportation costs the current period 80 Should these be passed along to customers No bulk buyers present this period How should we respond to the request for bids 50 units No dismissals permitted this period Should we increase our stock of finished products How should we manage our excess capacity of production staff What are the effects of downsizing on cost structures Group project Executive Board Changes Who has left joined the board and how do the new members influence the other executive board members concerning the firm s strategies Product 1 old 1 new Product 1 Market 1 11 Should we re launch Product 1 old or launch the new generation Exchange rate 1 50 Have we taken into consideration how much stock we have left of Product 1 old Taxes 45 Should we pass along the cost savings of Product 1 new to our customers Received from customers in Should we supply bulk buyers the current period 80 0 Up to 7000 units 2650 Euro unit Are we experiencing the usual fluctuations in the market or is it actually shrinking How should we respond to the request for bids for 9000 units Should we wait until Period 5 Are we able to Do we want to How many competitors do we have Should we enter a foreign market Should we use unit of output costing or contribution costing What is our marketing strategy Nothi
17. game you are advised to activate the various features in later periods of the game e g from Period 3 onwards Instructor s Data Activation of Features Anctvationotrestus Lo Please select from which period onwards the features of the simulation are active Products Markets Reports Planning Models Bankruptcy Ratios Decisions Languages Periods 05515253094 75965 7 8 Product 1 Market 1 VIiIVM MW WP A A Product 1 Old Relaunch I IT TT wv vw Vv Product 1 New Development CCEC Product 1 New Launch I TUT T MV MMM Product 1 Market 2 DICC Cr MV wv wv Wyv Product 2 Development Hig NM NM m y y y a Product 2 Market 1 High m m BM a g aa Product 2 Market 2 Big E G E BM BN As long as the modules are not activated no out of line situations report is issued Changing the instructor s data the Data for the Periods 5 Data for the Periods E ial xl Period Z v Mkt Stafi Lines Prod Purchasing Financing Other Company Comparison Corrections Cu4 gt Financing Medium Term Loans Other Loan Limits Pte 100 13 0 RMS Penalty 20 0 96 of Equity Up to 200 15 0 Payment Per 80 0 Interest on loans Above 17 0 Cash Min mEUR 01 is set at 13 Long Term Loans 11 0 Securities Overdraft Loans 17 0 Interest 6 0 Taxes Pre tax Income 55 0 Average Interest Rate Wages Salary 30 0 CFROI 13 0 Dividends 20 0 L Long Term Loan Int Rate 5
18. gn YA a earning business by doing business A TOPSIM Simulations OO Learning business by doing business TOPSIM General Management Il Instructor s Manual Appendix II Miscellaneous Instructions Hotline Version 12 0 Copyright TATA Interactive Systems GmbH D 72070 T bingen Copyright TATA Interactive Systems GmbH D 72070 T bingen Table of Contents 1 1 1 2 1 3 1 3 1 4 1 5 1 5 1 1 5 2 1 5 3 1 5 4 1 5 5 1 6 1 7 Page Seminar Preparation and Facilitation eee 1 ITI nx ibe dee Wanda bleed bans tea den aia deed idethede hes Mag AA Baga 1 Flow of Instructor s and Teams Activities 0 00 ccc cece ee ec eece cece ce eeee ee esse eeeeeeeaeeeenes 2 Seminar Ageridas eee eee Ds e ter ard ele Si ende Der ore tee poate eost ae 2 Seminar Agerdas 2 8 een dad ene atl es rv EY ree dea c ee d as 3 Special Events During the Game eese eter eene edente ener hne de nens 6 Group Projects si sei aver eve e d den dne ve det ELO ad ee ve de EE e d a us 7 Teams of Experts oe nete Rabe 7 Braridirig Goncepls dieere HERE ER epe aea SaaS ak cengh ade cecpess 8 Professional Stock Broker ssssssssssssssssssssee esee hee ren rne nn nnne 8 Management Board Changes sssssssee e Hee hen emere 9 Holistic ThIDKIrigs s n eet DER ERES ERR Seo ERR Aae Er ERR ER 10 Playing Games in Parallel terret dent ada abe an 10 Managemen
19. gures Financing mEUR Medium Term Loans 25 0 Set financing Long Term Loans 0 0 decisions to 0 here Purchase of Securities 0 0 Dividends of Net Income 50 Planned Figures Market 1 Sales Product 1 500 The planned figures can be hidden from the form see Instructor s Retum on Equity 20 0 Data Activation of Cash Flow 14 0 Features isi Print X Cancel Help The participants receive decision forms in which purchasing and financing fields as well as other modules are unavailable See decision forms base module TOPSIM General Management Il Instructor s Manual Appendix II Page 15 Strategic Educational Possibilities and Content Emphasized in the 8 Period Simulation Scenario Data Game Version B General learning objectives Determining and setting goals for the team and developing strategies Gaining insight into the how economic aspects are connected and interlaced Reacting early to changing market situations Observing the competition Benchmarking Handling crisis situations constructively Optimizing operational processes Upgrading manufacturing plants Understanding the necessity for permanent increases in productivity and manufacturing cost reductions Learning and applying the Shareholder VALUE concept The Company s Potential for Growth Forecast for the Next 8 Periods Period 1 Period 2 Period 3 Development of a successor for Copy i e Product 1 o
20. he reports The model assumes that these products are purchased at the start of the period as is the case with other purchases placed in inventory and subsequently removed from inventory by the distribution sales department TOPSIM General Management II Instructor s Manual Appendix II Page 25 7 5 7 6 7 7 Frequently Asked Questions e The long term loans increase every period but we only entered something in Period 1 The decisions from the previous period automatically apply to the current period unless you change them If a value is entered in the long term loans field and the loan is not required then it must be deleted e The computer has caused our company to purchase a production line that we did not want See above This is the same problem as that of taking out unnecessary loans e Why are our maintenance costs from the period so incredibly high In the decision form you must enter the maintenance costs per production line and not the total value for all lines e Weare investing in environmental technology yet the index ratings of our machines are not increasing These investments change neither the machines nor their ratings It is the entire company that is affected by these investments These so called end of pipe investments are for dust filters purification plants etc The result of investing in environmental technology is an improvement in the company s environmental damage indicator which is presented
21. ient liquid funds they are automatically allocated an overdraft loan for the required amount This type of loan is generally more expensive than normal loans The interest rate is specified in the instructor s data You may enter the same interest rate for all types of loans and if required you can lower it in comparison to the preset interest rate at the start of the game Enter 0 for the decision on raising loans in the groups decision forms Once you have done this the model allocates the necessary liquid funds to the groups in the form of overdraft loans If the loans are not to be considered overdraft loans but normal loans then transfer simulated overdraft loan amounts to the participants decision forms Simulate the period this lasts only a few seconds Look at the participants Financial Statement report on the screen Enter the overdraft loan amounts as the normal loan amounts in the groups decision forms Re simulate the period NOTE Do not simulate the next period If no decisions are made on raising loans you should not allow any decisions on securities and dividends If no decisions are made on dividends TOPSIM General Management automatically uses the minimum dividend percentage 20 that is specified in the instructor s file TOPSIM General Management Il Instructor s Manual Appendix II Page 13 Making Features Active at a Later Time In order to facilitate the decision making process at the start of the
22. ing Concepts e Professional Stock Broker e Management Board Changes e Holistic Thinking These group projects were developed and tested in practice In section 10 of this manual you will find handouts that can be used to introduce these projects Teams of Experts Purpose Starting Situation Execution Results Notes To create the same knowledge base about the company within all teams at the beginning of the game Not all participants have read the user manual due to lack of time The instructor briefly introduces the planning game and the simulated company COPYFIX Inc 30 min Teams of experts are formed Each team studies one special topic in the manual 30 min Plenary session Each team presents its special topic The seminar instructor evaluates how well contents were understood and explained The expert team members return to their company teams All participants gain within a short time a good understanding of the simulated company Each team has an expert for each department Later job rotation can also occur TOPSIM General Management Il Instructor s Manual Appendix II Page 7 1 5 2 1 5 3 Branding Concepts Purpose Execution Notes Integration of qualitative factors in the simulation Taking into account that not only monetary but also qualitative factors have an impact on the success of a company Plenary session Presentation of the task Group work Each team has 6
23. ing Process optimazation Produc STAFF Final Absence Period Cumul Quality Period Cumul tivity CO workfo persons mEUR mEUR index mEUR mEUR Index index I 1 1272 69 5 4 155 16 5 1 04 1 5 12 0 1 00 1 04 2 1415 87 6 1 3 0 19 5 1 04 1 0 12 0 1 00 1 03 3 1397 107 quud 1 0 13 5 1 03 2 20 17 0 1 02 1 02 4 886 40 4 5 035 4 0 0 98 0 0 0 0 1 00 0 99 5 884 39 4 4 0 5 4 0 0 98 0 0 0 0 1 00 1 00 EXPERIENCE CO Cumul prod prev period Productivity index 2 Total product index Capacity per person AND Product 1 Product 2 Product 1 Product 2 Product 1 Product 2 Product 1 Product 2 PRODUCTION 1 406792 3500 1420 1 08 1 15 21 13 57 20 2 437195 0 ae eT 1 00 1 14 1 03 57 18 3 401487 0 1 210 1 00 1 12 1 02 56 18 4 280000 0 1 07 1 00 1 06 0 99 48 18 5 279788 0 1 07 1 00 1 06 1 00 48 18 Other factors of market share e Technology e Ecology e Sales force e Environmental damage indicator of the company TOPSIM General Management Il Instructor s Manual Appendix II Page 21 Understanding Failure Please use Instructor s Reports to IV Points to consider e Prices too high too low e Sales volume Stock costs for financing stock e Loans Overdraft Cash balance e Interest Loans e Marketing mix Marketing expenditures e Extraordinary depreciation stock of Product 1 old e Utilization of production lines and production staff Was the utilization of manufacturing workers well under 100 96 e Purchase of new lines Increased d
24. ld can begin Period 4 Re launching Product 1 old is possible Depending on how the development of the advanced copier Copy I i e Product 1 new is progressing this new copier may be produced and marketed Market 2 can be supplied now FCU Foreign Currency Unit Business as usual The development of a color copier Product 2 can begin Period 6 Depending on Product 2 s attributes launching the color copier on Market 1 is possible Period 7 From this point onward the color copier can be sold on Market 2 Period 8 Business as usual TOPSIM General Management Il Instructor s Manual Appendix II Page 16 Special Topics to be Discussed in Groups Market Growth Basic decisions on marketing strategy Product 1 Market 1 6 Mercedes lt gt Audi Should bulk buyers be supplied Up to 5000 units 2500 Euro unit Should production lines be upgraded Which lines Production staff Should we recruit or have overtime Financing Should we take out medium term loans Long term loans How should we react to the competition s Product 1 Market 1 7 96 marketing strategy Purchasing Should we opt for just in time or low prices through quantity discounts Should we make use of the special offer and purchase production line C Would we then have excess capacity Should we make use of the decreased interest rate Should we supply bulk buyers Up to 8000 units 2450 Euro unit Should we respo
25. lopment P1 new Group work Group work Preparation of Organization of group Stockhold tockholders meeting work and decisions for Period 1 Group work Group work Analysis of results Creating Analysis of results Stockholders meeting Period 1 marketing concepts Period 5 Plenary session Plenary session Plenary session Exercise For Copy New Decisions The groups present Main emphasis Group work Period 6 their results Marketing Presentation Group work General analysis of game Plenary session Plenary session Break Decisions Analysis of results Discussion on topic of Period 2 Period 3 Capital budgeting Plenary session Establishing goals Decisions Plenary session and strategies for Period 4 Decisions the 8 periods Planning Model Period 7 Group work available Group work Market 2 opened Group work Introduction to Problem solving using Presentation of principles of method of holistic problem solving holistic thinking thinking on computer Holistic thinking Plenary session Group work Plenary session TOPSIM General Management Il Instructor s manual Appendix II Page 4 Duration of seminar Introduction to seminar Cost accounting and product costing Plenary session Test period Group work TOPSIM General Management Il Instructor s Manual Appendix II 4 1 2 Days Lecture discussion on the basics of marketing Plenary
26. n decision making Execution Own group projects tasks Goals strategies at the end of the Period 2 reflect the interlaced system Assignments on topics about the business university or private sector in general Discussions and tasks in groups following the introduction of a topic by the instructor Playing Games in Parallel TOPSIM General Management Il is designed for a maximum of 5 groups One group team normally has 3 to 5 members so there are usually 25 participants in total In exceptional cases the number of participants can be as high as 30 If you have more than 25 participants you are advised to play the games in parallel In order to do this you install the instructor s system repeatedly on your computer The games must be installed in different directories You must rename the files right after the installation is complete Game 1 Game n Enter the names for the games when defining the seminar s characteristics A practical suggestion would be to use colors as names For example Game 1 Red Game 2 Blue Game3 Green Game4 Yellow It also helps if you distinguish between the participants disks for the individual games by marking them with felt pens or using different colored labels You may even use colored folders for the reports of the specific games Evaluation measures for ranking participants or groups a Cumulative gain TOPSIM General Management Il Instructor s Manual Appendix II Page 10
27. nd to the request for bids 3000 units to be delivered in the next period What price would we bid Should we create a new generation of Product Product 1 Market 1 6 96 1 development of Product 1 new Nothing ventured nothing gained What can be used as Cost benefit or NPV calculation indicators to warn us about Should we supply bulk buyers substantial events Up to 9000 units 2475 Euro unit What is our strategy for Product 1 old if we intend to launch Product 1 new next period Should we respond to the request for bids 14000 units to be delivered in the next period What price would we bid Should we use unit of output costing or contribution costing Should we adjust the salaries of production staff since they now work a reduced number of hours per week 35 h per week 11 no dismissals Group project Advertising plan for Product 1 new The performance of the groups in creating their advertising plans will influence the market shares of the companies for Product 1 in Period 4 TOPSIM General Management Il Instructor s Manual Appendix II Page 17 Group project Professional Stock Broker Should we develop Product 2 color copier Product 1 Market 1 14 Will we re allocate R amp D personnel Product 1 Market 2 25 What are the chances of Product 2 succeeding Exchange rate 1 50 What are our assumptions about market volume the number of competitors prices Taxes 45 What is the product s li
28. ng values The planned sales of Product 1 Market 1 are never exactly the same as the actual sales Plans to sell Product 1 in Market 1 do not take bulk buyers and requests for bids into account Reports Personnel R amp D R amp D personnel may be reallocated e g instead of working on Product 1 old they will be assigned to Product 1 new without incurring recruitment or dismissal costs Only a modification of the total number of workers results in costs to the company Sales force The same applies to sales personnel for development of market 1 or 2 Cost centre accounting Staffing costs Wages and Salaries Production If this value is gt 0 then the production employees are not being fully utilized cf Report Production Plants Environmental Technology The cost of employing these workers is stated as overhead P L Extraordinary income e Proceeds from the sale of disinvested machinery x of net book value e Income from the sale of Product 1 old to a foreign buyer when Product 1 new is launched e Other amounts entered by the instructor P L Extraordinary expenses e Depreciation of net book value of scrapped machinery e Depreciation of Product 1 old stock that is scrapped at CGM if Product 1 new is launched e Other amounts entered by the instructor Externally produced units of Product 2 purchased by the company are included in the changes increases decreases to the company s inventory stated in t
29. ng ventured nothing gained How much should we produce Wages salaries and the interest rate have increased How should we manage the decrease of 10 15 in market volume strategies synchronizing team members TOPSIM General Management Il Instructor s Manual Appendix II Page 18 Ratios Will we launch the color copier What is our pricing strategy Should we make or buy What quantity What is our marketing mix strategy What do we realistically assume about the sales volume Wages and salaries have increased There is a freeze on overtime Should we supply bulk buyers Up to 5000 units at 2500 Euro How should we respond to the request for bids 9000 units How will the new environmental ratings of the production lines affect the company and the market Should investments in new plants be made The percentage allocated to the pension reserve increased by 1 How do interest expenditures compare to the operating income How should we manage excess capacity of staff Reallocation of R amp D personnel Dismissals Severance packages Should we launch Product 2 on the foreign market Should we supply bulk buyers Up to 7000 units at 2700 Euro How should we respond to the request for bids 4000 units A purification plant needs to be repaired ata cost of 6 0 mEuro Should this cost be passed along to customers The exchange rate has decreased Should the effects be passed along to customers
30. r example 10 20 below the inventory value Enter the amount as Extraordinary Income Data for the Periods Company Comparison Consultancy costs Enter these costs as Misc Fixed Costs Administration in the field for Other Data Special distribution costs for the Blue Angel Award competition Enter these under Extraordinary Costs Sales Collective bargaining for production personnel New labour costs are negotiated Otherwise turnover increases or the instructor will take the role of an independent arbitrator Analysis of group projects display creation sales pitch etc Enter market share according to how advertising concepts were graded In order to implement such events in the planning game appropriate entries in the period specific data are made by the seminar facilitator TOPSIM General Management Il Instructor s Manual Appendix II Page 6 1 5 1 5 1 Group Projects The participants may carry out different group projects between decision periods These projects are defined as special tasks which must be accomplished in a specific time frame e g 0 5 2 hours Such projects are intended to enhance the knowledge and experience gained through the game They provide depending on the types of projects selected the possibility to integrate qualitative factors into the planning process that influence results in the planning game Suggestions for group projects e Teams of Experts e Brand
31. ransfer list Everyone on the transfer list will be transferred to another team company Team members to be transferred are determined randomly The new company of these participants is also determined randomly however participants will not return to their current company The companies must write a report in order to give the new members of the board insight into the overall situation of the company Results The new team members ask a lot of questions to the old members Who is able to convince whom gt Strategies up to now are questioned gt Participants gain a new understanding of the company s situation gt New ideas emerge c Strategies change as board members are lost to competitors c f members come from a better company to a worse company their job is to spruce their new company up Notes First the announcement of executive board member changes leads to protest Then as the game progresses agreement usually results By the end of the seminar the participants consider the exercise to have been a positive experience TOPSIM General Management Il Instructor s Manual Appendix II Page 9 1 5 5 1 6 Holistic Thinking Purpose Create awareness about how decision making processes of enterprises are connected and interlaced Discuss conflicting goals and long term thinking Not only learn about direct effects but also identify subsequent effects to take note of and measure that should be considered i
32. riod TOPSIM General Management Il Instructor s Manual Appendix II Page 26 Example Period 4 is simulated and the results are provided to the participants The participants make decisions for Period 5 Before reading the decisions the instructor s system inadvertently simulates Period 5 In this case the program reads the preset decisions for Period 6 Remedy Reset the period count to 0 and re simulate periods 1 through 4 File menu Restart command Now read the decisions for Period 5 again from the users systems or from the diskettes Printer settings The printer works too slowly Reset to a maximum of 300 dpi Minimize the memory required by the printer The wrong font is being printed Please adjust the settings in the base code files AUTOEXEC BAT and CONFIG SYS Program SYSEDIT call You can modify the base code for the system including the files AUTO Cexec asked and CONFIG SYS Example the code used for a specific computer is shown below The code page number is usually 850 but at times 437 must replace it AUTOEXEC BAT mode con code page prepare 850 C WINDOWS COMMAND ega cpi mode con code page select 850 CONFIG SYS Country 049 850 C WINDOWS COMMAND country sys TOPSIM General Management Il Instructor s Manual Appendix II Page 27
33. roduct 1 Market 1 106 107 116 97 90 Product 1 Market 2 61 85 92 Product 2 Market 1 82 112 106 Product 2 Market 2 108 111 103 CI IMAGE Company 1 Company 2 Company 3 Company 4 Company 5 Expenditure for CI mEUR 2 0 2 0 3 0 2 0 2 0 Functional factor CI 5 2 5 6 549 4 0 4 0 Corporate image Index 104 5 105 7 105 0 99 7 99 7 BULK Sales Units Co 1 5000 Co 2 7000 Co 3 7000 Co 4 0 Co 5 0 BUYERS Revenue mEUR Co 1 13 50 Co 2 18 90 Co 3 18 90 Co 4 0 00 Co 5 0 00 TENDER Prod 1 for tender bid Company Price EUR 1999 Sales Units 9000 Revenue mEUR 17 99 This report shows differences concerning Prices Advertising and the effectiveness of advertising including after effects the impact of advertising on sales revenue Cl and Corporate image All variables can possibly influence sales volume The actual sales volume is based on The company s capacity to supply and In some cases by competitors insufficient capacity to supply TOPSIM General Management Il Instructor s Manual Appendix II Page 20 INSTRUCTOR S REPORT II R amp D SALES PRODUCTION PRODUCT TECHNOLOGY ECOLOGY VALUE ANALYSIS DEVELOPMENT co mEUR mEUR mEUR Period Cumul ndex Period Cumul n
34. ssion Decisions Period 3 Group work Lecture discussion Method of holistic thinking applied to cost effects of decisions Plenary session Analysis of results Period 3 Plenary session Decisions Period 4 Group work TOPSIM General Management Il Instructor s Manual Appendix II Day 3 Lecture discussion on Financial accounting P L Balance Sheets Financial Statements and Cash flow with practical examples Plenary session Analysis of results Period 4 Plenary session Decisions Period 5 Group work Analysis of results Period 5 Plenary session Decisions Period 6 Group work Preparation of stockholders meeting Group work Stockholders meeting Plenary session The groups present their results General analysis of game Page 3 Duration of seminar 4 days Seminar Cost Orientated Economic Thinking Introduction to Lecture discussion Lecture discussion Decisions seminar on topic of contribution on topic of Financial Period 8 Main emphasis costing Accounting Group work Cost accounting and P L Balance sheets product costing Financial statements Plenary session Plenary session Break Analysis of results Analysis of results Period 2 Period 4 Plenary session Plenary session Decisions Decisions Period 3 Period 5 Contribution costing Development Product 2 Reports available Planning Model II New product possibly available Company evaluation deve
35. structor s Manual Appendix II Page 12 Simplification of the Game Playing with Reduced Complexity The planning game can also be played with reduced complexity in the base scenario especially at the start of the game e The participants do not make any purchasing decisions for input materials parts e The participants do not make any decisions on raising loans Thus there is no need for financial planning By removing these areas of decision making participants can fully concentrate on the areas of marketing R amp D and production You should play with decision sheets and not with transfer diskettes These simplifications can be maintained throughout the remainder of the game depending on the participants progress Removal of Purchasing Decisions If participants do not purchase enough input materials parts the shortage amount is bought automatically although normally there is a penalty cost for stock outs shortages The amount of this penalty is specified in the instructor s data For the periods in which you wish to remove the purchasing decisions you may set this penalty at 0 In addition you may set the decision values for Purchasing in the decision forms on the computer at 0 If participants do not make any purchasing decisions they automatically receive as many input materials and parts as are needed in production at the existing volume based price Removal of Loan Raising Decisions If participants have insuffic
36. t Simulation Preparation Checklist uuussssensnsseennnnenen nennen nennen 12 Simplification of the Game Playing with Reduced Complexity 13 Strategic Educational Possibilities and Content Emphasized in the 8 Period Simulation Scenario esses eene nennen nennen nennen nnne 16 Evaluation of Market Results 2 ccccceeeeeee ence cece mann eee nn nnnnnn ee nennen nennen nnn 20 Understanding Failure ursussnnennnsnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn nennen nennen nnn nnn nnn 22 Notes on Data Security c ccceceeeeee ee ee eee ence ee ee ee auaha Tenia ae akaa nennen nennen 23 Hotline Questions 4 2 sH seen el 24 Inventory Production en ee ea DE 24 Product Development Research amp Development 444444444s0sssennen en 24 SACS E EEE EA A Pant Caheueettlns dha Anata E E ETA 25 FREPOMS EET ETTE N EAE EE EE 25 Frequently Asked Questions nsnssenennnenennnnnennnnnnnn eene nenne 26 Miscellaneous aa as a AM TEM dienen rennt 26 More Technical Information 004440424nsnnnennnnnnnnnennnnnnnnn nn anne nennen 26 TOPSIM General Management Il Instructor s Manual Appendix II TOPSIM General Management Il Instructor s Manual Appendix II 1 1 Seminar Preparation and Facilitation Overview Installation of computer and business simulation software Introduction to the instructor s simulation model
37. ts Participants must try to detect trends Central issues In whom do have confidence What information do still need Plenary session Press release on each company 5 minute presentation What goals are they pursuing What is there intent What share price can be expected The audience may formulate their own questions also in order to get relevant information about competitors How do you intend to develop the color copier TOPSIM General Management Il Instructor s Manual Appendix II Page 8 Do you want to enter foreign markets Participants determine how they will invest the money The investment can be divided among all participating companies Analysis The analysis often reveals that few participants invest in their own companies Moreover the Company of the Year often does not fulfil expectations Results Participants learn Before deciding on his her investments How to examine data in company reports How to present his her own company How to hide company secrets How to get relevant information about competitors In the course of the game Timely analysis of all companies 1 5 4 Management Board Changes Purpose Make clear the success or failure of teams group dynamics so far Enable participants to find new courses of action by integrating new members Encourage participants to think about the development of the company up to this point Execution Two members of each team are put on the t
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Appendix2_E_GM2_12_0