Business Simulations - Home of Biz Sim Simulation Game
Jerald Smith and Peggy Golden publish a wide library of business simulations for academic uses and management training programs. We have been publishing business simulations for many years and our products are used in many countries around the world. On this page we are highlighting our latest simulation, BizSim, a product for those users who want a fairly simple simulation that participants can learn in a short period of time and begin to make decisions quickly. For more sophisticated simulations, and industry-specific games, click here: List of Business Simulations
Authorized Users may download the latest copy of the software program at the end of this page. Those wishing to download a demo copy of the simulation may also download it; go to the bottom of this page.
The industry simulated in BIZsim is
the highly competitive and quickly changing personal audio player industry, the
simulated firms is manufacturing and selling Personal FM/AM/CD Disk
Player. Teams make 11 decisions each
"round" that is played. These include number of audio players to
produce, the capacity of the production plant, the budget for a total
quality management program, pricing strategy including a low, medium, or high
price strategy, and the actual price to be charged, the advertising and
sales promotion budget, the size of the sales force, the budget for product
development and enhancement, a decision on which market research studies will
be purchased, loans procured, dividends paid, and a decision on a critical
mini-case involving business ethics, corporate responsibility, human resource
decisions, or technology plans. BIZSIM will accommodate from 3
to 20 teams per group with as many as 25 groups (3 to 2,500 players), and may
be played for 4 to 12 quarters (iterations).
There are two methods of entering decisions and printing financial reports. The instructor can do both. It requires the instructor about 20 minutes to process the entire game, mostly dependent on the speed of the printer. There is also a student program that allows student teams to enter their own decisions and submit them via floppy disk, as a file via email or local area network at the school's computer lab. The instructor runs the compute routine which produces a data file for each team and the team, upon receipt of the data file, can print their own reports. Many distance learning classes are handled this way.
The
Company You Will Be Managing
The
industry your firm is in is the highly competitive and quickly changing personal
audio player industry. Your firm has been manufacturing and selling of a
Compact Personal AM/FM and Audio Disk Player. These players have headphones and
an attachment on the player to allow the wearer to attach it to a belt. It is composed of a
few large brand name manufacturers and as well as smaller firms such as your
own that have the advantage of lower overhead cost, faster time to market a new
feature on the product, and greater personal service to smaller retail chains.
Since the market for this product is so fragmented, total sales is difficult to
obtain. Your firm does not sell its product directly to the consumer but rather
to wholesalers, distributors, and all types of electronic stores as well as
direct sales to department stores. This popular audio product has been selling
in the $59 to $109 retail price range. The company in which you are assuming
management has been in business only one year. The entrepreneur that
established the company wishes to pursue other business interests. The company
is a for-profit company and the stock in the company is held by a large variety
of individuals. These stockholders (shareholders in some countries) have
invested their monies in your firm and they expect your new management team to
increase profits and dividends while maintaining high ethical standards.
Factors
Used in Ranking Teams at the End of the Simulation
While instructors differ in opinion on the factors of excellent performance, the authors use the following to rank the top teams: total profits, profit trends, return on sales, stock price and dividends, good corporate citizenship via the Mini-cases, with deductions for lost sales and overdraft bank loans.
A Copy of the Quarterly
Decision Form that is submitted each "round"
DECISION FORM:
Name____________ Industry___ Quarter No.___ Company #____
Production
Decisions
1.
Production (000's of units 0-99) _____,000
Note: You may not produce any
greater than your capacity
2.
Addition to Size of Production Plant
(0-10) _____,000
May not exceed 10(000) units per
quarter.
3. Total Quality Management (0-200) _____,000
Marketing Decisions
4. Price ($27-29, 33-35, 39-41) _____
($30, 31, 32, 36, 37, 38 are not valid prices)
5. Advertising and Sales Promotion (0-200) _____,000
6. Number of sales people added this quarter
(-4 to 4) _____
(Use negative value to lay
off salespersons)
7. Product Development Budget (0-200)
_____,000
8. Market Research Studies (0-15) _____,000
Financial Decisions
9. Dividends (Cannot be greater than last
quarters’ profits.) _____,000
(Not allowed at all if
retained earnings are negative.)
10. Loan Addition or Payment (-999 TO 999)
_____,000
(Use a minus to make a loan
payment)
11. Mini-Case Response (Use only values from
the manual) _____
Report
for Quarter 0 -- Your Starting Position for Quarter 1
(All numbers
in 000's except product which is in units)
Quarter
0 Econo-Music Industry C Co. X
** INVENTORY AND PRODUCTION ANALYSIS**
Beginning Inventory 4,000
Beginning Plant Capacity 35,082
+ Units Produced
+35,000 + Added
Capacity 1,000
Total Units Available =39,000 Capacity Avail in Qtr 0 36,082
Sales
-35,000 - Depreciation 1,082
Ending Inventory Qtr 0= 4,000 Plant Capacity in Qtr 1 35,000
(Your
Beginning Inventory in Quarter 1 = 4,000)
**INCOME & EXPENSE ANALYSIS** **BALANCE SHEET**
Sales: 35,000 @ $34.00 1190 Cash $ 100
Cost of Goods Sold -595
Inventory 68
Gross Margin =595 Plant & Equipment 2,100
Interest Income + 0 Balance Sheet Correction 0
Total
Income = 595
TOTAL ASSETS 2,268
Expenses:
Inventory Expense
23
Advertising
& Promotion 50 Loans
Payable 1,100
Sales
Force(2) Cost
30 TOTAL
LIABILITIES 1,100
Product
Development 50
Mkt
Research 15
Other
Expenses 0 Stock 1,000
Interest
Expense 28 Retained Earnings 168
Overhead
Expense 200 TOTAL EQUITY 1,168
Total
Expenses -406 TOTAL LIABILITIES+EQUITY 2,268
Less Depreciation - 65
PROFIT BEFORE TAX =124
Current Price of Stock: 25
Less Taxes - 50 Total Shares Stock Issued: 40000
Dividends Paid - 5
Earnings Per Share: 1.85
PROFITS RETAINED = 69
Economic Index this Quarter 100
USE MINI-CASE
A NEXT QUARTER
**CASH FLOW ANALYSIS **
Beginning Cash $
26 Expenses+Cost
of Goods Sold$ 1001
Sales & Interest Income 1,190 Taxes and Dividends 55
New Bank Loan 0 Change in Inventory Value 0
Overdraft Loan 0 Cost of Plant Addition 60
Total Cash Inflow 1,216
Total Cash Outflow 1,116
NET
CASH FLOW (This quarter's ending cash) $ 100
MARKET RESEARCH STUDIES:
Your Market Share is 33.3%.
Economic Forecast next 4 quarters 100 103 1xx 1xx
Total Industry Sales(units) 105,000
Prices(Co 1-3 ): 34 34 34
Average Industry Advertising: $ 50,000
Average Industry Product Development: $ 50,000
Total Industry Sales force: 6
Average Quality Budget: $ 10,000
Product Perception(Co
#1-3): 28 28 28
MESSAGES TO YOUR FIRM, INDUSTRY REPORT, AND
MINI-CASE RESPONSE
Production Cost(per unit)$
17.00
Product Perception is 28
Lost Sales
0
(Mini-Case Response will be printed here)
Use Mini-case A in Quarter 1.
New management has been hired for several firms in
the industry.
The management teams are all geared up and ready to
put spark into
the personal music firms.
The Economic Index looks positive so sales should
increase in the immediate future.
Mini-Case E: The Case of the
Personal Email
All employee computers are
now connected to the company Internet access and there has been a surge in
Email traffic that you suspect is due to personal Email and use of the personal
use of the Internet. Although the law is very clear that the logs and records
on the hard drives corporate computers belong to the company, Email is a
non-cash perquisite that some companies permit to their employees. One
department manager is concerned that there is a significant amount of Asocial
loafing” associated with personal Email and Internet surfing. It is hard
to compute the exact amount of work time used without hiring a specialist to
conduct detailed reviews of the usage logs. It is clear that the company must
establish a policy on this matter. The concerned department manager wants to
have a “no use at any time” policy because he fears that “if
you give them an inch they will take a mile.” Where do you draw the line?
“he asks.
Discuss the situation with your team. Enter a one (1) if you are going to formally permit people to use their own discretion about personal Email and Internet activity. Enter a two (2) if you allow employees to use their computers for personal activity before and after work hours. Enter a three (3) if you will not permit personal use of the company computers at any time.
An Overview of a Simulation
1. Management teams make a set of business decisions for a simulated firm and these are evaluated against decisions made by competitors. This is not a board game nor a game that a participant plays against the computer. It is a group experiential exercise.
2. Several teams are created for competitive play. A team can consist of 1 or more participants. The team makes a set of decisions that one might find in a business setting.
3. Each time the teams make a set of decisions, it represents a period of 3 months in the life of the company being simulated. A simulation is usually played for 4 to 10 iterations (quarters).
4. The administrator enters the decisions into a program on a personal computer. The program acts as the purchasers of the product, compares the relative “merit” of the decisions made by all teams, and computes the sales for each firm.
5. The program then prints a financial report for each team and this is distributed to the participants.
6. The teams analyze their results and prepare another set of decisions. This is continued until the number of quarters planned by the administrator are achieved.
7. Upon the completion of play,
teams may give a short report of their strategy and how well it worked
To download a short Power Point presentation that introduces BIZSim, click Here.
To read more about our other business simulations click here: http://home.att.net/~simulations/index.htm
Instructors who wish to contact the authors click here: mailto:esim@bellsouth.net
Simulation Downloads
Bonafide Instructors who have adopted the simulation and paid the
Site License fee may download the latest copy of the software. Contact the
author at SmithandGolden@yahoo.com for a password.
Use "biz" as the User Name, then
enter the password which we will give you.
Enter the user name, biz, and the password ALL IN LOWER CASE."
All files will be included in one zip file. Copy it to your hard drive before you open it (right click). Make sure you remember where the file is placed.
Click Here to Download BizSim Instructor and Student Decision Entry Programs.
Click Here to Download BizSim Instructor and Student Decision Entry Programs.
If you are interested in downloading the Demo program and materials, click on the link below.
All files will be included in one zip file. Copy it to your hard drive or CD BEFORE you open it (right click). Make sure you know where the file is placed.
Click Here to Download BizSim Demo Program and Materials.