Rules of the Business simulation

  • Founding
  • Process
  • Projects
  • Production
  • Marketing
  • Finance
  • Shares
  • Knowledge

What the simulation game is about

You run an public company for 12 quarters, which produces high-quality products. The aim is to achieve the best possible result in accordance with the chosen strategy. Your results are compared with those of the other teams, creating fun and excitement.

Founding - Initial capital

The company generates high quality products and has existed for many years in the form of a private unlimited company. This company has now been converted into a public limited company. The founder family supplies 60 million as initial capital. The board of directors consists of the heads of the family. You have been employed to manage the business. Brainstorm for a name and a logo this company. The managing board consists of the following positions, which have to be distributed among your team:

Choose one of the above listed positions within the company. You are now responsible to the board of directors, especially to deliver the exact business reports. You have now signed a three year contract for this position, a termination is out of question! The management team has decided to switch the positions of the managing board annually according to the job rotation principal. This is to enable an deeper insight and understanding of how all areas are interconnected with each other.

Opening balance in millions

Assets Equity and liabilities
Factories20share capital60
Maschines30Surplus0
Total fixed assets50Total Equity60
Raw material9Loans80
semi-finished goods15trade payables10
finished goods15
trade receivables40
Cash21
Total current assets100Total borrowed capital90
Total assets150Total capital 150

The company has so far only produced basic products. You can view the current balance sheet when starting the game.

It is not necessary to have read the entire set of rules before starting the game. Just get started, and if needed consult the help function or watch the videos!

Process

You can also play alone against 3 avatars. As group game it is far more exciting though, when several teams battle with and against each other. As many teams as you would like can participate in one game, which then will be grouped to form organizational units of four teams altogether. Thanks to the ranking of all teams within a game the sportsmanlike ambition is easily awoken.

The first step is to define one or more individual teams. Then you can start a new game and if required open several organizational units. Each organizational unit can contain four teams and can begin the game independently of other organizational units once all teams have joined. Should you wish to play on one device with several teams simultaneously you have to open an individual browser for each team.

At the beginning you conduct a plan for this period and define the goal, you would like to achieve within your period in this function.

You manage the company for three years and have deliver a full repot each quarter. The game is stunted in 12 quarters. Each quarter you’ll have to make the following decisions:

Together you analyze them evaluation and compare it with the intriguing results of your competitors. From this valuable information you derive your decisions for the following quarters.

Projects
The projects allow you to indirectly influence the key performance indicators (KPIs). Those are all interconnected with each other in a very complex way. One project can influence and change several KPIs in different ways. The effect may be delayed or may decrease over time. The current status of the KPIs is shown in each areas with a graphic. KPIs in the green area (from 80 onward) open up new opportunities in different areas. For example, new customers can be won, machines can be better utilized, or new products can be developed. The impact of the projects on the KPIs also depends on the chosen strategy.
Quantity and Costs
How many projects can be realized depends in turn on the KPI working climate. You can see the costs for each project in the last column.
Start and cancellation of a project
You start a project by clicking on the corresponding row. You can also undo this. Just click on the project row again. You can also see which projects you have carried out in previous quarters. These are highlighted in green and you can restart them, as their effect wears off over time.
Restart a project
As the impact of a project decreases over the course of the quarters, it makes sense to restart them again later. You can see by the marking which projects have already been carried out.
Production and Innovation
Quality inspection
In the first step, you go through the quality inspection of the produced products.

Investment of fixed assets

The delivery time for a new factory is 2 quarters. The purchase price of 20 Millions is only due upon delivery and will be debited directly to the credit account.

You can also rent a factory for 1 million per quarter. In the finance section, you can sell and rent a factory again. This will allow you to increase your liquidity.

From year 2 onward you can sell a factory for 120% of the book value.

Machines are immediately available after purchase for 10 million and can not be rented. When you sell a machine, you receive 80% of the book value.

The useful life of all assets is 10 years. Depreciation takes place automatically when paying the fixed costs.

Production planning and occupancy of the machines

Each machine is assigned a product type (Basic, Classic or Premium).
By clicking on the product type, you can convert the machine as far as the desired product type has already been developed. The costs for the conversion amount to 1 million.

Each machine has a day and a night shift. You can click on each shift, but you can not reverse your choice. Wages for the night shift are 20% above those of the day shift.

For the production per piece you pay direct costs (for wages, energy, etc.) of 2 Million/machine and shift for the product type BASIC and 3 million/machine and shift for the product type CLASSIC. For the product type PREMIUM the production period amounts to 2 quarters with production costs of 2 Million/machine. The production costs are therefore dependent on the product!
The production costs increases for the night shifts due to overtime by 20%.

The production costs are to be paid in cash.

Attention: Decisions regarding the conversions to different product types or occupancy in terms of shifts of machines can not be reversed.

Additional production

If the stability and employee productivity are high, the output may be increased without an additional raise in production costsn as the machines are better utilized.

If KPI stability is green, then another piece can be produced per factory. If KPI stability is red, the output is reduced by one piece per factory.

If KPI employee productivity is green, then another piece can be produced per factory.
If KPI employee productivity is red, the output is reduced by one piece per factory.

Example: if both KPIs are green, you may additionally produce 2 pieces per factory !

Attention: In order to make use of the additional production, all the machines with the corresponding shift (day or night shift) per factory must already be in use.

Innovation and product development

The product type BASIC is in the mature state, i.e. high numbers of it are in demand, however the average price is expected to fall. Further product generations are foreseeable.

If KPI product development is green, then the innovation process can be continued to develop a new product. The wages for the development team are 3 million per quarter.
If KPI product development is red, the completion date for the product development will be shifted back by 1 quarter. This means that, due to the poor innovative climate in the company some of the developments already made are lost again.

For every new product, a development team has to be employed. A development team costs 3 million per quarter. Several development teams at a time can also be hired. If the KPI is green one development step can be done per quarter. Products can only be produced once the completion of the development has occurred fully. Offers can, however, be placed independently of the development status!

You can have an overview of the duration of the product development if you click on the product development.

Sales & Marketing
Customers with benefits

are regular customers in the central market, which consume certain products to selected prices regularly.

If the KPI customer acquisition is green, then you can select a customer with benefits per quarter. Pay attention to the duration and frequency. 1 means that the customer orders every quarter and 2 means he orders every 2nd quarter. The orders of customers with benefits will appear automatically in the list of open orders.

If the KPI customer acquisition is red, then a customer with benefits is lost. You then have to click on an already selected customer with benefits and his orders will be deleted in the list of open orders.

Market auction

Here are the international tenders. You can open one sales office in each, the East and West market. Click on the appropriate market. The opening or closing of a sales office causes sales costs of 4 or 2 million. The running costs of a sales office amount to 2 million per quarter.

You can participate in 2 tenders per market and quarter at a time. In the list of tenders you can see the expectations of the customers, which you can change in terms of the order value, the payment date and the delivery time in the offer, but you can not exceed a value over 50%.
The date bar at the top shows how much time you have left for the placement of your offer. The rhythm (the duration between the due dates of offers) is defined at the game opening.

If you have placed all your offers, please confirm with "no offer left“. Then check the status to see if the other teams have submitted their offers.As soon as all teams have completed the offer phase or the deadline has been reached, you will receive an assessment of the distribution.

The customers rank according to the cash value, the payment term and the delivery date. If one of your offers has been accepted, it will be marked with the green circle and automatically be transferred to your open orders.

Market leadership

If you are the market leader in one of the 3 markets, you can place 3 offers instead of 2 in the following period and the first offer will definitely win the bid. You will have to meet the expectations of the customers however.

Open orders

In the upper part you see the warehouse of finished goods. The lower part shows the orders to be delivered. Pay attention to the delivery date. If you fail to comply the delivery date, a penalty of 10% of the order value per quarter will be charged. Per 10 delivered material units incur logistics costs of 3 million.

Spot market

You can buy basic products on the spot market. The products are immediately available for a purchase price of 8.

The spot market is unlimitedly receptive to basic products at a selling price of 6. The payment term is 2 quarters.

After-Sales Turnover

With an after-sales turnover there are no additional direct costs. For example, if a customer is satisfied, they will sign a service contract that can be met by your staff at no extra cost.

If KPI customer satisfaction is green, an after-sales turnover of a new customer can be generated for after-sales.

Finance Section
Accounts receivables

You should receive the payments from your customers at the beginning of each quarter.

If however the key performance indicator customer satisfaction is red, then 50% of the customers in the first accounts receivables column will only pay one quarter later.

You can see the time for payment of the accounts receivables diagrammed in quarters and you have the option to resign them to a factoring bank. If you wish to do so please insert the desired amount. You will immediately be credited for this amount in cash (liquid funds). You pay the factoring expenses of 2% per quarter at the end of each quarter.

Liabilities

Here you can see the time for payment of accounts payables diagrammed in quarters. You will have to pay the payable amount for the current quarter directly and without a cash discount. Also you can choose to pay right now for accounts payables of later quarters with a cash discount of 5% by entering the desired amount. Keep in mind that the cost-efficiency is considerably higher, - should you not have enough cash at your disposal you can take out a loan to get the cash discount.

In the lower part you can raise or lower the credit level within your credit limit. If your credit limit is exhausted, you can claim an overdraft facility at twice the current interest rate of 5% per annum. However, you should pay it back in the following quarter. If this does not succeed, the double interest rate applies to the normal loan as well.

Fixed costs

The billing of fixed costs represents the last activity of a quarter. Afterwards you can no longer transact business!

Fixed costs

Value in millions per quarter

Description

Selling expenses

2

Costs per sales office

Selling expenses

4

+2

+1

Administration costs, purchases, etc.
Per additional factory

Per 10 purchased material units

Logistic expenditure

3

Costs for logistics and stockkeeping
Per 10 shipped material units

Interest

1.25%

5% p.a.

Factoring

2%

per quarter: sale of receivables

Rent

1

per factory

-

machinery can not be rented

Development costs

3

Pro Per

Conversion costs

1

Per machine

Consultancy fees

1

If you did not create the report yourself

The taxes of 25% of the result of ordinary activities are calculated and imposed once at the end of the year. The billing of taxes is, however, only 2 quarters later.

Stock market games

Shares

The capital stock of each team is divided into a certain number (eg 100,000) shares. The number is stored in the game file. The subscription price is above 20% of the nominal value, ie at 60 million share capital, the price is 720, -. Each team can buy and sell shares of another team in the same game. The game applies the same set of rules as a real stock exchange.

All orders are saved on the server and remain in effect until either the purchase or sale is concluded or the order is deleted.

Fixing and billing

You can buy or sell your shares and place your orders at any point within a quarter. However, you can only use the "Status" to trigger the pricing and execution once every quarter. Wait for the other teams to place their orders as well, otherwise due to lack of supply or demand no deals can be executed.

Once you have clicked the button "Status" in the main program each quarter, you will see which deals were made and the corresponding revaluation to your account. The current amount in your account illustrates how many shares you have already successfully been able to note as „sold" in your order book.

Within the game frame a specific rhythm is defined, by which each price fulfillment is determined. This rhythm is asynchronous (that is, it does not wait for all teams) and will therefore deviate from the placement of offers (it will be shorter paced). Once the deadline has been reached, the data in the order book is processed and the price fulfillment at which the highest turnover can be achieved is determined. There are also partial sales / purchases possible.

Types of orders

When making a purchase, you can choose the following additional functions:

When selling, you can choose the following order types:

Microlearning

Questions open the mind!
Goethe

Brain research confirms that increased brain activity is detected after a question. A question arouses more interest than a normal text.

Teams can answer random questions at any time. You have 3 wild cards throughout the game that you can use strategically. This gives the microlearning a playful component and increases the motivation to deal with the topic.

If the teams answer at least 3 questions per round (= quarter), the percentage of correctly answered questions will be included in the benchmarking and ranking. This makes microlearning even more exciting. For example, it could be shown that a team with the best theoretical knowledge might perform worse than other teams in applying this knowledge in the simulation.

Questions of your company

To add value to microlearning, you can enter specific questions from your company. Thus, the ranking of knowledge gains additional importance. You can connect the questions with pictures, sounds or videos. For the learning effect, it would be important to provide an accurate explanation of the right solution.

You are very welcome to use our didactically experienced employees in formulating and entering the questions in the system.

If you do not provide specific questions from your company, the questions will be drawn from a pool of about 300 business questions.