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Decision making guide

Table of Contents
Chapter 1. About Cesim ................................................................................................................. 4
1.1. General ................................................................................................................................. 4
1.2. Cesim products ..................................................................................................................... 4
1.3. Contact Cesim ....................................................................................................................... 4
Chapter 2. Simulation Platform Introduction ................................................................................. 5
2.1. General User-Interface Options ........................................................................................... 5
2.2. Home Page ........................................................................................................................... 6
2.3. Decision Checklist ................................................................................................................. 6
2.4. Decision Areas ...................................................................................................................... 8
2.5. Results ................................................................................................................................. 9
2.6. Schedule ............................................................................................................................. 10
2.7. Teams area ......................................................................................................................... 12
2.8. Materials............................................................................................................................. 13
2.9. Forums ............................................................................................................................... 14
Chapter 3. Outlooks page .............................................................................................................. 15
Chapter 4. Marketing overview screen .......................................................................................... 16
Chapter 5. Pricing Decisions ......................................................................................................... 17
5.1. Markup setting ................................................................................................................... 17
5.2. Sales forecasts .................................................................................................................... 17
Chapter 6. Advertising decisions ................................................................................................... 18
6.1. Advertising.......................................................................................................................... 18
6.2. Monthly Specials ................................................................................................................ 19
6.3. Promotions ......................................................................................................................... 19
Chapter 7. Layout decisions for each store.................................................................................... 21
Chapter 8. HR ................................................................................................................................ 22
8.1. Labour Required ................................................................................................................. 23
8.2. Wages ................................................................................................................................. 23
8.3. Management Time ............................................................................................................. 23
8.3.1. General Duties ............................................................................................................. 23
8.3.2. Marketing .................................................................................................................... 23
8.3.3. Financial Control ......................................................................................................... 23
8.3.4. Shop Floor ................................................................................................................... 23
8.4. Employee Time Allocation .................................................................................................. 23
8.4.1. Sales & Customer relationship .................................................................................... 23
8.4.3. Gift & loyalty cards ..................................................................................................... 24
8.4.4. Replenishment ............................................................................................................. 24
Chapter 9. Ordering Decisions ...................................................................................................... 24
9.1. Ordering.............................................................................................................................. 24
9.2. Shrink Forecast ................................................................................................................... 24
Chapter 10. Investments ................................................................................................................ 25
Chapter 11. Finance ....................................................................................................................... 26
11.1. Long-Term Loans .............................................................................................................. 27
11.2. Inter-Store Funds Management ....................................................................................... 27
Chapter 1. About Cesim

1.1. General

Cesim provides corporations, universities, and other educational institutions easy-to-use and cost-effective
business simulations that can be integrated in various business courses. Headquartered in Finland since 1996,
we operate globally through our own offices and partner network.

1.2. Cesim products

Cesim offers four types of simulations to educational institutions:


 Cesim Global Challenge®
An on-line simulation designed for strategy and international business studies. It develops students'
understanding of the complexity of global business operations in a dynamic, competitive
environment.
 SimBrand
An on-line marketing management simulation that develops students' understanding of the
marketing decision-making process as a whole, with particular emphasis on profitability.
 OnService
An on-line services management simulation that helps students to practice and learn service business
success factors in a Small to Medium sized Enterprise (SME) environment.
 Hospitality
An on-line hospitality simulation that helps students to practice and learn about small scale hotel
and restaurant operations.
 SimFirm
An entry level on-line simulation designed to develop understanding on how decisions in different
functions of a company attribute to overall success in a competitive, international business
environment.
Simulations can be conducted in a few days or over an entire semester. The number of simulation rounds,
schedules, and team structures can be adjusted even after the course has started.

1.3. Contact Cesim

Cesim Oy

Arkadiankatu 21 A

00100 Helsinki

Finland

tel. +358 9 406 660

http://www.cesim.com/

finland@cesim.com
v1.107
Chapter 2. Simulation Platform Introduction

2.1. General User-Interface Options

1. My Info – Through this page, you can personalize your Cesim player account by adding personal
data about yourself, as well as a picture, which will then be shown in various part of the user
interface. You can also change your password here, or even your email. On the bottom of the page,
there are two checkboxes for determining when you wish to receive automated email notifications.
It is highly recommended that all students use valid emails here, as otherwise they could miss
important information during the game. Also, the "Forgot my password" feature works through
email, making password recovery impossible through an invalid email address.
2. Support – This is your best way to reach the Cesim Support team, should you run into problems or
issues relating to the game functionality. Please note that for any content related questions, you
should primarily contact your instructor.
3. Change Language – You will find a list of supported languages for the game here. You can change
the user interface language at any point of the game.
2.2. Home Page

1. Player Information
2. Email function – Use this to easily reach your team members and instructor through emails. An easy
to use checkbox allows you to choose which team members you want to reach.
3. The panel on the right shows all the important on-going data of the course. On the top you see the
main indicators of the last round. Below it, you will find information about round deadlines, forums
messages and quizzes.
4. Team Decision Log – This feature allows you to see the decision making actions done by the team
members. Please note the "Show all rounds" and "More" buttons below the panel. By default, you
only see the current round latest decision saving action. Using the additional buttons, you can expand
the panel to show all rounds, and every decision saving action made during any of the rounds. Also
note that decisions made while in the team decision column (more on this in the Decision Checklist
part of the guide) will not be recorded in detail, only as "The team’s decisions were modified by…”

2.3. Decision Checklist

Cesim simulations offer the user an innovative decision making area, through which the team members have
a high level of control over the decision making process. The "Decision Checklist" is split into two general
sections: The individual "Student Decision Areas", and the "Team Decision Area". Please note, that once the
round deadline has passed, the round results will be calculated only based on the Team Decision Area. During
each round of the game, you can easily identify changes already made by the highlighted cells on the checklist.

The Decision Checklist offers several tools to manage the decision making process, which are explained
below.

1. Round drop-menu: Use the indicated drop-down menu to select the desired round. You may select
previous rounds in order to review the decisions made during the rounds, however modifications
will be disabled.
2. The "Go" button allows a player to move to another team member’s decision making area, or the
team’s decision making area. Use caution, as any modifications will be automatically recorded on
their respective area. Any modifications made directly in the team decision area will be used as final
decisions when the round ends, if no further actions are taken.
3. The "Copy" button copies a player’s decisions from the student area to the team area. Once copied,
the previous set of decisions cannot be recovered. Decisions can be copied from Student Area to
Team Area as many times as needed, before the round deadline. Please note that if decisions are
made directly into the team decision column, then no additional steps need to be taken, as they will
be automatically used for result calculation when the round ends.
4. The "Import" button, found on top of every decision area, transfers the decisions from the Team- or
Student Area to the importing players own Student Area. Once imported, the original decisions of
the importing player cannot be recovered. The decisions on the player that are being imported from
will not be changed in any way.
5. The budget for the round shows the estimated profits based on the current decisions, as well as the
"change in sales %" comparable to the previous round.

2.4. Decision Areas

The Decision Area is split into several theme based sub-categories (e.g. Demand, Production, etc.). Please
refer the detailed instructions in this manual to determine where the decision making process should begin,
and what the suggested order of the process is. Some areas should be filled out first, as the effect of those
areas may influence some calculations and estimates elsewhere.

The actual decisions are entered into dedicated fields within their respective areas. There are three general
types of decision making fields:

1. In the white cells you enter your decisions.


2. In the highlighted cells enter estimates of your sales, personnel turnover and so on. These
estimations act as a basis for the budgets shown in the system.
3. Drop-down menus are used in certain decisions where there are some specific options to choose
from.

The system automatically updates the budgets and calculations as you make decisions

It is important to note that there are two decision making areas. The first one is the Student Decision Making
Area. Each team member has their own personal decision making area, where they can freely input any
figures they want to see the effects they have on the projected results. The students always start on their own
student area by default, when logging into the game. After satisfactory decisions have been made on the
student area, they can easily be copied over to the second area type, the Team Decision Making Area, through
use of the "Copy" button. Once copied, the decision set will be used to calculate the rounds results.

Alternatively, decisions can be made directly into the team area. To do this, a team member can move to the
Team Area through use of the "Go" button. Any changes here are automatically recorded, and will be used
to calculate the round results, if no other decisions are copied over. It is important to note that if a team
member’s decisions are copied over the decision set made directly to the Team Area, there is no way to
restore the originals, unless a player has "Imported" the set into their own Student Area.

Once the round deadline is passed, the game will automatically calculate results based on the final decisions
found in the Team Decision Area. Again, be sure to have copied over the decision sets from the student areas
before the deadline, if decisions are not made directly into the team area.

2.5. Results

As mentioned before, the round results are calculated immediately after the deadline passes based on the
decision set on the Team Area. The games also allow you to review the results from previous rounds,
including possible practice rounds, at any given time during the course of the simulation by using the Results
page drop-down menu. You may also utilize some special features, such as downloadable excel versions of
the round results and slideshows of main indicators.
1. The universe drop-down menu lets you choose any universe in the on-going course.
2. Use the Round drop-down menu to choose the desired round results.
3. Use the "Download" button to download an excel file of the chosen round results.
4. Use the "Slides" button to view a slideshow of the key indicators of the round.
5. Use the "Printable" button to print the round results.

2.6. Schedule
In the schedule section, you can see a list of the amount of rounds that have been set for the course, as well
as the deadlines for each round. In cases where the user’s computer time is different from the system time,
this page will show the deadlines in both user time and the system time set for the course.

The simulation games are often started with practice rounds. Please note that practice round results have no
effect on the results of the real rounds, and are simply used to learn game mechanics and practice forecasting
results. Once the practice round(s) are over, the game will reset to the initial market situation.
2.7. Teams area

The Teams area allows you to see details about players across all teams in all universes of the course. You
may also edit team information, like team name, slogan and team description.

Team members may also move freely between teams until the deletion of empty teams has occurred, and the
game has officially begun. Click the "Join Team" button to move to a different team. Once empty teams have
been deleted and the game has begun, it is only possible for the instructor to move students between teams.
2.8. Materials

This section contains all the documentation that is needed to understand and enjoy the game. The generic
reading materials will include the decision making guide and the case description. Instructors can also upload
custom case specific materials here.

The decision making guide shows you the basics of the simulation, such as user-interface functionality, how
to make the decisions, what should be considered when making decisions, and the general order which you
should begin with each round.

The case description gives information regarding the business case that is being played during the course. It
gives a general understanding of the industry situation, trends in the industry, future challenges. Certain case
specific parameters may also be given in the case description.

In this section, you can also find a video tutorial of the game, if available.
2.9. Forums

The forums are a great way for the players to contact their instructors or co-players, and vice versa, when
face-to-face contact is not possible. The benefit of forum usage compared to private emails is that it is easy
for everyone with the rights to view the forum to contribute to the discussion.

The forums are split into a Team Forum, and a Course Forum. As the names suggest, in the Team Forum,
only your team members can see the posts and reply to them. The Course Forum on the other hand is available
for everyone on the course to participate in, regardless of team and universe.

Instructors are able to view and reply to forum posts in both sections. As such, the course forum is a good
place to ask questions that everyone on the course can benefit from, while the team forum is the ideal place
to discuss sensitive team related issues.

Unless disabled in the "My Info" section, players will get notified by email whenever something is posted on
their team forum area.
Chapter 3. Outlooks page

It is very useful to read the market outlook before you start to make decisions. Outlooks contain important
information on possible future developments and will give you an idea of what to expect of future market
movements. Outlooks are a descriptive estimate of the future in contrast to the exact numerical information
given in the parameter projections at the bottom of the decision pages. Above is an example of the Outlooks
page. A short description is given in three categories of interest: industry overview, store specific news and
suppliers & finance.
Chapter 4. Marketing overview screen

This page shows the total effect of all your marketing decisions. From left to right you can view information
on each category in sales units, average price per category per item, total sales revenue from each category
and the relative % of that contribution to the total gross sales.
Chapter 5. Pricing Decisions

5.1. Markup setting

You are required to set markups for each product within your store. You will be able to see the immediate
comparison to last quarter’s markup by looking at the second column. The change in markup and change in
price columns automatically calculate the impact of your new markup on price.

Markups are used to calculate prices for each product group. The pricing levels will have a direct impact on
the number of visitors to the stores that are converted to customers. Actual gross markups will not always be
equal to the participant-set gross markups due to shrink and discounts.

5.2. Sales forecasts


Based on your new markup for the categories, you should then forecast the sales in dollars you expect to
obtain in each product category. Sales forecasts can be best made by using your last quarter's sales as a base
and adjusting them to take into account the effect of the decisions you have made this quarter to influence
sales. Once again, the model shows you last quarter’s actual sales, and the calculated change based on your
forecast. This number will be the base used in the operations screens for shrink and inventory levels.

Remember, remodeling a store will initially decrease that store's sales by approximately 5% and then increase
them by 15-20% over the next two quarters.

Chapter 6. Advertising decisions

6.1. Advertising

These decisions establish a budget for advertising and promotional dollars to be spent in each store based on
a percentage of projected gross revenues for the quarter. The normal range is from 0% to 5%.

External store advertising would include newspaper advertising, community events sponsorship, radio etc.
The external advertising will influence the number of visitors coming to your shop. However, the amount of
purchases is mainly affected by the price, service and internal advertising. With the internal factors
unchanged, larger external advertising rate will lower the conversion rate.

Total promotion budgets in the past have been approximately 3% of sales. In general, a dollar spent for
promotion by one team is equivalent to a dollar spent for promotion by another. There is a maximum level
of promotional expenditure above which there is a diminishing return. Promotion expenditures increase
industry market demand as well as improve each company's individual image. There is some carry-over
(residual) effect from quarter to quarter for some types of promotion. Remember, in an inflationary economy,
your budgeted promotion dollars will buy less real promotion each quarter.

6.2. Monthly Specials

You can offer products at a discounted price for a limited time during the quarter. Decision is made in
number of months. Alternatively, you main have a promotion module enabled instead of monthly special
according to your instructor’s choice.

6.3. Promotions (Optional module)

The store is able to increase the sales by offering a discount to their client for a limited time. There are two
kinds of discount promotions:

 The official one is set by your instructor, which is the same for all the teams for the current round.
The length and discount for any specific item are shown on the left of the promotion sector.
 The second one is store specific promotion, where you can decide the duration in weeks and discount
in percentages.

The discount is on the final price (cost + markup). The unit of duration is in weeks. For instance, choosing
“1 week” in the duration select box and “-20%” for Product 1 will offer customers Product 1 at only 80% of
the original price for one whole week in the current round. The graph in the top-right corner shows the
average discount level for the whole round (already taking both duration and discount level into
consideration).

Please note, the official and store specific promotions will proceed in sequence, not concurrently. The official
one will be launched first, followed by the store specific promotion.

According to the case settings set by your instructor, there might be a max length of promotion duration
(official + store specific).
Chapter 7. Layout decisions for each store

You will be given a basic floor plan indicative of the relative store sizes with fixed shelving and fixtures
around which you can arrange your merchandise. You cannot add or subtract fixtures. The object of the
exercise is to place product categories in the most effective position to take advantage of your marketing and
promotional activities. Some lines will be more sensitive to advertising and will benefit even more if placed
in optimum positions within the shells of the store. It is important to note that no position is a bad position,
but some positions are considered better for optimizing sales. If you can get the best category positions, sales
can increase by up to 5%. If you get the least desirable layout positions, sales will decrease by up to 5%.
Chapter 8. Operations and HR decisions
8.1. Labour Required

As you decide the number of permanent staff you desire, the deficit or surplus hours will be calculated so
that you can hire temporary staff by the hour to fulfill your requirements.

8.2. Wages

These are the average industry salaries that are being paid to staff within the various regions.

8.3. Management Time

You have 100% of time as a manager. Generally owners or managers in charge spend between 40 and 60
hours a week at their sites. During this time, generalized activities are performed with various outcomes
which affect efficiency, staff morale, service, shrink, and operational excellence. The impact of Managers
not allocating their time appropriately is poorer bottom line performance from total operations. There is a
relationship between time allocation and improved sales revenues.

8.3.1. General Duties


Activities can be anything ranging from training, hiring and purchasing tobanking etc. Training is meant to
improve employee productivity by helping employees to do their current jobs better

8.3.2. Marketing
All time spent on merchandising, discussions with suppliers, promotional activities, point of sale material etc.

8.3.3. Financial Control


Time devoted to cash, inventory and shrink management. Examination and analysis of financial reports to
follow trends and reorganise everything from pricing to product mix is also included in this amount of time.

8.3.4. Shop Floor


Time spent behind the cash register, stacking shelves, talking with customers etc.

8.4. Employee Time Allocation

Similar to the management time allocation, this strategic decision set allows you to divide your employees’
time allocation in each store.

You as a manager can decide how much time your employees focus on different areas during working hours.
Each area will have its own advantage, where the sales will increase when more time is allocated; however,
the effects of changes of 70% to 90% are much less than changes of 20% to 30%.

8.4.1. Sales & Customer relationship


By paying more attention to communicating with the clients, your employees will be able to gain a good
impression in the area, which is reflected by a higher service score. It also has a positive impact on the sales
of some service related products such as food service.

8.4.2. Cashier

As more time is spent on the checkout service, the customer will spend less time queuing and the purchases
will also be bagged better. It will increase the service score and attract potential customers who are in a hurry.
8.4.3. Gift & loyalty cards
The sales of loyalty cards will increase if your employee spends more time in persuading the client to
purchase one. Loyalty card sales can be very profitable since their cost is quite low. According to statistics,
customers with loyalty cards will come to the shop more often than those without a card. On average, loyalty
card holders get a 5% discount on all purchased products via various loyalty schemes; however, they also
tend to purchase at least 30% more products per visit compared to customers not on the loyalty program.

8.4.4. Replenishment
Your employees focus more on checking the back storage and conduct stock replenishments more frequently
if a high percentage is allocated to this area.

Chapter 9. Ordering Decisions

9.1. Ordering

For each open store you must determine the amount of inventory you would like to order.

Choosing a "1" will leave you with sufficient stock for 1 week’s forecasted sales in the ending inventory at
the end of the quarter, while choosing a "4" will leave you with sufficient stock for 4 weeks’s forecasted
sales . Remember, the ending inventory shown on the screen refers to inventory at the store, which is stored
in the stock room.

9.2. Shrink Forecast


You must also enter the shrink percentage you expect to have during the quarter. You should use the last
quarter's percentage as a base and consider the decisions you have made to reduce or increase shrink. Shrink
is affected by many variables including your labour allocation and effectiveness, the amount of products and
shipments coming into your store, the amount of time a product spends in inventory, the amount of times you
change your markup, and the number of discounts you run.

Chapter 10. Investments

Investment decisions should be carefully calculated before being implemented. For this, there is a special
“Investment Calculation” screen that calculates the Net Present Value of the chosen investments.
Chapter 11. Finance

In the Finance page, you can find a cash flow statement for your store which provides you with the financial
market transaction details. Liquid assets on the last day of the quarter cannot be below a minimum
requirement. The minimum requirement may vary depending on the case settings applied to your course but
is usually 10 000 euros. If cash falls below this requirement the financial department fills the gap
automatically by short-term financing. It is paid back automatically when it isn’t needed anymore.

11.1. Long-Term Loans

Your banker is willing to lend you funds for any period required. These loans will be at one point or more
above the prime rate, depending upon your credit rating.

11.2. Inter-Store Funds Management (Internal Loans)

You can transfer cash from one store to another and thus finance local operations and investments.

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