ERPsim Post

Game Analysis
By
Vigneswaran Padmanaban
Bernice Somnath
Kaushal Mandayam
Rohan Vashisht
 1. Our Initial Strategy
2. Rounds I, II & III
3. Final results
4. So what went wrong?!
5. Scope for improvement

Chapters
 • Invest $167,000 and reduce setup time to 8 hours
• BOMs: 5 variants in 500g boxes and 1 variant in 1Kg box
• Selling Price = COGS + $2.5/$2.4/$2.3 in DC14, 12 & 10 respectively
• Advertise one product per region. Allowance: $15 per product per day
• Forecast initially for 50,000 boxes each in all variants
• Maximize profits with minimal production
• Manufacture the products that we solely dominate or have the least sales
in the market

1. Our Initial Strategy

 • Found we had strong market share in 500g Original & 500g Raisin
• Shifted production from 6 to the above 2 variants
• Ran periodic MRP
• Lost focus and delayed MRP – no production for almost 2 days
• Market domination - set S.P. above market average
• Net Income - $634,851 (Gross Margin: 69.3%, Net Margin: 34.8%)
• Productivity – 72.7%

2. Round I
Round I Production
Round I Sales & Pricing
 • Found 1Kg Mixed Fruit had least sales in Round 1. So altered BOM
• Focused on 1Kg Mixed Fruit & 500g Original Muesli
• Competitor for 500g Muesli – matched S.P. to market average
• 70% of total market sales in 1Kg Mixed Fruit - set S.P. above market
average
• Net Income - $1.9 million (Gross Margin: 69%, Net Margin: 41%)
• Productivity – 94%

Round II
Round II Production
Round II Sales & Pricing
 • Found 500g Mixed Fruit Muesli had least sales in Round 2. Altered BOM
• Focused on (500g +1Kg) Mixed Fruit & 500g Original Muesli
• Big bet – 250,000 boxes of 500g Mixed Fruit in one stretch
• Increased advertising and slashed prices. Yet less sales till 29th day.
• 1Kg Mixed and 500g Original sales save the day!
• Net Income - $3.13 million (Gross Margin: 64%, Net Margin: 43%)
• Productivity – 89%

Round III
Round III Production
Round III Sales of 500g Mix Fruit Muesli
Round III Sales & Pricing
 • Second highest net income - $3.1 million
• Highest gross margin - 64.4%
• Highest net margin - 43.34%
• Least warehouse expense - $9,750
• 1Kg Mixed Fruit Muesli - 71% of total market sales
• 500g Original Muesli - 43% of total market sales

3. Final Results
 • MRP for 250,000 boxes of 500g Mixed Fruit in one stretch
• Exponential advertisement expenditures by Team Y
• High volume sales by Team Z in Round 3

Raw Materials Warehousing Sales Revenue

723,099.60 2,750.00 2,619,112.05
Team T
1,141,965.47 186,700.00 3,662,166.02
Team Z

4. So what went wrong?!

 • Data about average market expenditures for advertising

• Lumira – crashes frequently and does not support multiple windows

• Data about competitor recipes

5. Scope for improvement

Thank you!