iBizSim is a business simulation software, very useful for learning about different management skills in Functional Level of an business organization

1. International Business
Simulations (iBizSim)
Presented By: Ishwor Tripathi
Mfc 5th batch
School of Management
Tribhuvan University
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2. Introduction
• Business simulation software.
• Developed by a professional team led by professors from
Guanghua School of Management at Peking University.
• Participants form a virtual company's senior management
team.
• Compete in a simulated market environment.
• Conduct drills for multi-period management decisions.
• Cultivate their ability to manage macro businesses.
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3. Uses
• University MBA teaching.
• College business education.
• Corporate management training.
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4. General Rules
• Teams represent different companies
• Can produce 4 types of products and sell at 4 market.
• Each company makes a decision in each quarter.
• Decision need to be submitted before deadline.
• If not, administrator may use company's previous quarter's decision.
• Considerations for making decision:
Current status, history data, market environment and competitors.
• When making decisions, company need to consider whether it is feasible.
• If not feasible, system may change your decision randomly.
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5. Market Rules
• Market's demand- related to many factors and follow
fundamental economy rules.
• Demand depends on the company's decision (such as product
price, advertisement, promotion and its market share).
• It also depends on other competitors decision and status.
• Demands also vary with total market size, macro economy,
seasonal changes etc.
• Promotion spend on a particular market has impact on all
products in the market.
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6. • Products quality is related to R & D cost and worker's
salary.
• Higher quality products can have higher price.
• Rumors are prediction of the economy, society and
natural events for next quarter.
• Whether those events will happen or not is not
predictable.
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7. Product Transportation and Sales
• Only 75% of products manufactured this quarter and
those in warehouse can be transported to market.
• They can not be moved among different markets.
• Fixed Transportation Cost and Floating transportation
Cost.
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8. Stock
• Material left can be saved in warehouse
• Storage cost is 0.05 Yuan for each material in each quarter.
• Products can be stored in warehouse or in the market.
• Each quarter's cost for each product is:
• Storage cost is paid at end of each quarter.
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Product A: 20.00Yuan
Product B: 80.00Yuan
Product C: 100.00Yuan
Product D: 120.00Yuan

9. Order
• When demand for a product > stock, some percentage of
the extra demand become the order for next quarter.
• Price is same as current quarter.
• Products transported next quarter are sold to meet previous
quarter's order first.
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10. Manufacture
• Cost to manufacture each product
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Product A Product B Product C Product D
machine(hour) 100.0 200.0 400.0 500.0
worker(hour) 150.0 250.0 180.0 160.0
Material(unit) 300.0 1500.0 2000.0 3000.0

11. Shift
• First shift normal time: 6:00-14:00
• First shift over time: 14:00-18:00
• Second shift normal time: 14:00-22:00
• Second shift over time: 22:00- 2:00
• There are 520 hours in one normal time shift in one quarter
• (13 weeks/quarter, 40 hours/week).
• Overtime is 260 hours.
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12. Machine
• Machine can be used in two shifts.
• Total number of machines used in first shift over time and second shift
normal time can not exceed available machines.
• Machine used in first shift overtime can not be reused even if overtime is
over.
• Machine price is 60,000 Yuan.
• Depreciation period is 5 years.
• Depreciation for each quarter is 5.0%, no matter it is used or not.
• If you buy machines, you need to pay at the end of the quarter.
• Machine need to be transported and assembled in next quarter and can only
be used in next quarter.
• Depreciation starts when it is used.
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13. Buy Material
• Material cost is 1 yuan.
• But can get discount if buy large quantity.
• Following is the discount rate:
• Material Transportation Cost Material transportation cost includes fixed and floating
cost.
• Fixed cost is 5000 Yuan.
• Floating cost is 0.02 Yuan.
• Transportation cost is the cost for current quarter and discount is accounted as income.13
Quantity >= Price
2000000 0.93
1500000 0.95
1000000 0.97
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14. Administration Cost
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Product/shift First Second Third
1 4000 5000 6000
2 6000 7000 8000
3 8000 9000 10000
4 8000 9000 10000
Maintenance cost for each machine is 200 per quarter, no matter it is used or
not.

15. R&D
• Amount is the R&D cost for level 1.
• It includes the cost to acquire the patent, buy equipment and
training.
• To improve product quality level, company need to invest on R&D.
• It includes improvement of manufacturing process and technology
innovation.
• Those cost are for level 2-5.
• High quality level products lead to higher customer demand.
• When calculating cost, R&D cost is accounted equally in this quarter
and next quarter.
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16. R&D cost
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Level 1 Level 2 Level 3 Level 4 Level 5
Product A 100,000.0 200,000.0 300,000.0 400,000.0 500,000.0
Product B 200,000.0 350,000.0 480,000.0 600,000.0 700,000.0
Product C 300,000.0 450,000.0 580,000.0 700,000.0 800,000.0
Product D 500,000.0 600,000.0 700,000.0 850,000.0 1,000,000.0

17. Hiring, Laying off and Retire of Workers
• Company can hire new worker at beginning of each quarter.
• New hire can't exceed 50.0% of total number of workers at beginning
of the quarter.
• New workers hired in this quarter will be trained in current quarter.
• Each new worker need training cost 500 yuan.
• The productivity and salary of new worker is equivalent to 25.0% of
experienced worker.
• New worker become experienced worker after one quarter's training.
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18. • There are 3% of workers retire each quarter.
• When making decisions, you can lay off workers if needed.
• Number of people laid off in decision form includes both retired and
laid off workers.
• According to the law, number of worker retired and laid off can not
exceed 10% of total workers.
• Retired or laid off workers can not do any work in current worker.
• But company still need to pay severance package once 1000 yuan.
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19. Worker salary
• First shift normal time: 3.0 yuan
• First shift overtime: 4.5 yuan
• Second shift normal time: 4.0 yuan
• Second shift overtime: 6.0 yuan
• Each worker can only work in one shift.
• Over time workers can not exceed normal time workers.
• Workers get first shift normal time salary even if there is no work.
• Company can increase salary ratio to motivate workers
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20. Finance
• Each company has 3,000,000 yuan cash at beginning of the game.
• For a company to be able to operate, it need to have at least 2,500,000
yuan cash.
• If cash is not enough, bank will give load within the limit of the
company's credit line.
• Company can get loan from bank while making decisions.
• The total amount for loan can not exceed 8,000,000 yuan credit line.
• Both principle and interest are paid at end of current quarter.
• Annual interest rate is 8.0% (interest rate for each quarter is 1/4 of a
year's)
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21. Treasure Bond and debentures
• Company can buy treasure bond in each quarter.
• Annual interest rate is 6.0%.
• Treasure bond need to be paid at end of the quarter.
• You can get both principle and interest back at next quarter.
• Company can issue debenture to raise money.
• Debenture issued can bring cash at beginning of current quarter.
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22. • Debenture issued and unpaid debenture cannot exceed 50.0% of
company's net asset.
• Company need to pay 5.0% of principle and interest each quarter.
• Annual rate is 12.0%.
• Company may already issued debenture after initialization.
• Unpaid debenture can be seen in company information.
• Debenture issued can only be paid starting from next quarter.
• Debenture can not be paid earlier or later.
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23. Tax and dividend
• Tax is 30.0% of income for current quarter.
• It is paid at end of each quarter.
• When company loss money, 30% of loss can be used as tax credit for
next quarters.
• Conditions for dividend:
(1) Need have more than 2,500,000 yuan cash at end of each quarter.
(2) Dividend cannot exceed company's after tax income.
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24. How to rank overall score?
• After each quarter, system will give an overall score to each
company.
• Overall score is based on seven factors: income for current
quarter, market share, accumulated dividend, accumulated tax,
net asset, profit per worker, capital return.
• Normalized score for each factor is calculated.
• Overall score is calculated by weighting them together.
• The weight of each factor is : 0.2, 0.15, 0.1, 0.1, 0.2, 0.1, 0.15.
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25. • Normalized score 0 means the company's score is all companies'
average score.
• Positive normalized score means better.
• Negative means not so good.
• When calculating normalized score, overall score of the
company's previous quarter is also considered.
• Each company's seven score and overall score will be published.
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26. Thank You
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