1. The team initially focused on two variants, invested in reducing setup time, and advertised one product per region. In Round 1 they dominated two variants and had a net income of $634,851. 2. In Round 2 they focused on the variant with the least sales in Round 1 and increased production. Their net income increased to $1.9 million. 3. In Round 3 they took a risk producing 250,000 boxes of one variant. Increased advertising did not increase sales until later. Their highest net income was $3.13 million, despite issues with one variant and high competition.

1. ERPsim Post
Game Analysis
By
Vigneswaran Padmanaban
Bernice Somnath
Kaushal Mandayam
RohanVashisht

2. Chapters
1. Our Initial Strategy
2. Rounds I, II & III
3. Final results
4. So what went wrong?!
5. Scope for improvement

3. 1. Our Initial Strategy
• 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

4. 2. Round I
• 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%

5. Round I Production

6. Round I Sales & Pricing

7. Round II
• 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%

8. Round II Production

9. Round II Sales & Pricing

10. Round III
• 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%

11. Round III Production

12. Round III Sales of 500g Mix Fruit Muesli

13. Round III Sales & Pricing

14. 3. Final Results
• 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

15. 4. So what went wrong?!
• 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
Team T
723,099.60 2,750.00 2,619,112.05
Team Z
1,141,965.47 186,700.00 3,662,166.02

16. 5. Scope for improvement
• Data about average market expenditures for advertising
• Lumira – crashes frequently and does not support multiple windows
• Data about competitor recipes

17. Thank you!