Business Simulation Archives

salary-in-mikesbikes-advanced

Question of the Week: How much should we pay our staff? | MikesBikes Advanced Business Simulation

Salary

This is the average annual earnings of an employee working on the factory floor. The average salary level you set will affect not only your bottom line but also attract better skills and will improve motivation.

Factory workers are paid (on average) the rate you select. Administration staff are paid (on average) twice this rate. For comparison purposes, the average industry salary is $25,000 per year.

How does Salary impact your staff’s motivation level?

Salary level is compared to an industry average of $25,000 and smoothed over several years.

Job security is reduced during downsizing, but is also smoothed over several years.

Including the training/skill level reflects the fact that employees are looking for more than salary and job security. They are looking for a job where they are learning and working with other highly-skilled people.

The graph below shows the motivation index achieved by changing the firm’s average salary from $25,000. The effect would be increased by sustaining the salary change across succeeding years.

Staff Motivation and Turnover Rate in MikesBikes Advanced

The graph below shows the effect of job cuts on morale and staff turnover.

Staff Motivation and Turnover Rate when Downsizing in MikesBikes Advanced

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preventative-maintenance-mikesbikes

Question of the Week: What is Preventative Maintenance? | MikesBikes Advanced Business Simulation

Preventative Maintenance

You should decide on the total amount to spend on Preventative Maintenance. This is an aggregate amount and so should be varied when a firm changes its plant capacity.

You should look at the Manufacturing Responsiveness Report (under the Key Reports menu) and if you are losing a significant amount of time to Breakdowns, then consider increasing your spend on Preventative Maintenance.

Effects of Spending in Preventative Maintenance

MikesBikes Advanced Breakdown Curve

Expenditure on preventative maintenance has a number of effects. Preventative maintenance reduces the likelihood of plant breakdown and losses in capacity caused by these delays. Adequate maintenance also serves to maintain the resale value of plant. Finally, ensuring the plant is producing within tolerances contributes towards the reduction of defects and improves your internal quality.

Example: Currently your firm has approximately 25,000 SCU of plant. If it were new it would be worth $4 million. However it is a few years old and its book value is only $1.6 million, so about 7% of its potential is lost due to breakdowns.

Maintenance Index vs Accumulated Maintenance in MikesBikes Advanced

Investment of about $24 per SCU or $600,000/year in preventative maintenance is sufficient to offset deterioration and will keep its operational level (and hence resale) value constant at its current level. Higher investment than this will increase the level accumulated maintenance and hence decrease machine breakdowns. Remember to adjust the amount you spend on maintenance as you increase or decrease your plant size.

 

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Consumer Preferences and Shopping Habits of customers

What Do My Customers Want?

If you want to create messages that resonate with your audience, you need to know what they care about.

– Nate Elliott, Marketing Technology Adviser

Consumer Preferences

It is crucial that your Product Strategy follow the preferences of your consumers. Valuable Market Research has been conducted to investigate what your customers are looking for in the products they buy. This information is available to you under the Market Information Report (under the Key Reports menu).

Market Information Report with information on Product Dimension Sensitivities and Preferences in MikesBikes Intro

The table above (taken from the Market Information Report) will tell you important areas that you should be focusing on.

For example, the Mountain Segment has High sensitivity to Advertising. What this means is you should be focusing your Marketing Budget on Advertising and not PR (as the Mountain segment has low sensitivity in this area). If a market segment is highly sensitive to one area this means: “if you increase this figure, then proportionately more people are going to buy your bike.” This would then result in a higher return on your investment than if you invest in areas where your target market segment has a low sensitivity in.

Each market segment is sensitive to different dimensions. View the Market Segment Scenario Information report.

Marketing Dimension Sensitivities

If we take the Racers segment we see it has a low sensitivity to Advertising and a high sensitivity to PR. This means that an increase to our Racers bikes’ PR index (see Market Summary report) is going to have a larger increase to our sales volume than a change to our Awareness rating.

Questions?

We strongly recommend all MikesBikes Advanced users view our Business Simulation Tutorial Videos.

If you have any questions just send us an email through our Contact Us page.

Accessing Reports from Previous Years in MikesBikes

There are various historical information available for you under the Historical Reports menu.

This can be found under the “All Reports” menu, then use the drop-down box within this screen to navigate through these reports.

MikesBikes Introduction

MikesBikes Intro historical report

The available historical reports are:

  • Income Statement History
  • Balance Sheet History
  • Cashflow Statement History
  • Factory Report History
  • Emergency Equity Decision
  • Industry Benchmark
  • Product Summary
  • Market Summary
  • Decisions

MikesBikes Advanced

MBA historical reports

The available historical reports are:

  • Income Statement History
  • Balance Sheet History
  • Cashflow Statement History
  • Manufacturing Responsiveness
  • Quality History
  • Industry Benchmark Report
  • Product Summary
  • Market Summary
  • Decisions
Smartsims Product Updates for June 2018

Smartsims Product Updates: June 2018

We’re now halfway through the year and exciting developments are coming your way!

Improved Tablet and Mobile Experience

We understand that students have busy lives and are not always near their computer. So we have made it easier for them to check their results and update their decisions from their tablets and mobiles.

They can access all the same decisions and reports as they can on their desktop browser. However, we have adjusted the tablet/mobile screens to show the most relevant content, the reports and scrolling are better suited to smaller devices, and a ‘Hamburger’ style menu makes it easy to navigate.

Mobile Friendly Business Simulations

Key Reports within Decision Screens

When students are making decisions, they often need to review one or more reports which means they often have to leave the decision screen. So we have added a commonly-used reports tab to each of the decision screens.

Selecting a report from the “Reports” tab will display the report as a pop-up over the top of the decision screen. This way students can quickly review key information and make an informed decision without having to leave the decision screen.

MikesBikes Intro Reports Screen

New Historical Reports Menu (MikesBikes Only)

We often receive emails from students requesting access to previous years’ reports. To make this accessible for students, we have now made  historical reports available for them to access. This is available to them under the All Reports menu.

MBI Historical Report

Accessibility and Improved Compatibility with Screen Readers

A key requirement for many institutions is accessibility for students with disabilities. Our simulations work with JAWS and NVDA, two of the most common screen readers, to help vision impaired students navigate their way around. We also provide additional context information for the screen readers in the input fields.

For instance, when you enter the Retail Price input field, the screen reader would announce: “Retail Price. Decision last year was $1600. Minimum Price is $1000. Maximum price is $3000.”

Similarly when you enter the Production input field you would hear: “Production Units. Decision last year was 15,000 units. Maximum production is 18,700 units”

This is of great benefit to vision impaired students as they do not have to hunt around for the information they need to make their decisions.

Updated Report Names

Updated report names for the following reports in MikesBikes Introduction, MikesBikes Advanced and Music2Go Marketing:

  • The Product Summary – Sales, Margin, Production has been shortened to Product Summary.
  • The Market Summary (All Product Details) has been shortened to Market Summary.
  • MikesBikes Advanced only: Financial Results for All Firms is now called the Industry Benchmark Report.

MikesBikes Advanced Updates

There have been three important updates to the MikesBikes Advanced scenario which will apply to all new courses starting from July 2018. These changes are detailed here: https://www.smartsims.com/news/2018-product-update-for-mikesbikes-advanced/

The MikesBikes Dog Retires

Our MikesBikes users will know the little dog which has featured in the simulation over the years. It is with sadness we have retired “Cliks” and “Einstein” the dog. This older style feature simply does not gel with our current updated simulation interface, nor the upcoming new interface under development.

To bid farewell we published an article looking back at the history of “Cliks” and “Einstein” the dogs: https://www.smartsims.com/news/the-mikesbikes-dog-has-retired/

The MikesBikes Dogs have been replaced with a new Performance Star Rating.

Simulation Starting Year Update

Just a reminder that earlier in the year all simulation were updated to have a starting year / year ahead 2019 (reporting year 2018).

 

Our August product updates are now available here: https://www.smartsims.com/product-updates/august-2018/

 

If you have any comments or questions feel free to contact us.

What is a double rollover in MikesBikes Advanced and how does it work?

If you are using MikesBikes Advanced your course will most likely feature a Final Double Rollover.

What is a Double Rollover?

A double rollover means that the simulation will rollover twice simultaneously. A Final Double Rollover ensures your final decisions leave their company in a healthy position for long-term success.

How should I plan for the Double Rollover?

You only need to enter your decisions once before the Final Double Rollover. All decisions will then be processed for the first rollover. For the second rollover most of your decisions will simply repeat, except for the following decisions which will not carry over:

  •  Hire/Fire Workers
  • Buy/Sell Plant
  • Raise/Repurchase Equity
  • Raise/Repay Long-Term Debt
  • Product Development Decisions
  • Takeover and Owned Company Decisions (if applicable)

If you have any questions please contact us.

MikesBikes Advanced Splashscreen

MikesBikes Advanced Updates: June 2018

The following MikesBikes Advanced updates will apply to new courses starting from 1 July 2018.

1. Encouraging prudent product strategy

The current scenario enables students to develop as many new product development projects as they wish in a given year. Over time we have observed this can encourage some to undertake a very risky strategy where they rush to enter all new market segments in the first year of the simulation. Those who adopt this strategy often underestimate the significant expenditure required and put their company at a high risk of insolvency.

Our belief is that an “all or nothing” approach to start the simulation should be discouraged. Rather, our team feel it would best to encourage more prudent and realistic product strategies by limiting the number of product development projects to two per year. This means students can still have a product in every market if they wish, but by drawing this out over the first three/four years of the simulation it encourages a more strategic start to the simulation. However, if this update conflicts with how you would like to use the simulation we can disable this on request.

2. Limiting total number of products

Currently the scenario does not limit the total number of products in a company’s product range. We believe it is reasonable to limit the total number of products to five (in the Multi-Player). This encourages students to focus their efforts on fewer successful products, while at the same time creating greater opportunity for mid/low performing companies to improve. This number is still sufficient for students to have a product in every market if they wish. However, if you would like to increase the limit we can do this on request.

3. Final double rollover

Unless we have arranged with you otherwise, all MikesBikes Advanced courses we will now have a double final rollover (meaning the simulation will rollover twice simultaneously). This eliminates the possibility of “end game” decisions, aimed at a single year performance boost at the cost of long-term success. A final double rollover ensures student’s final decisions leave their company in a healthy position.

If you are interested in learning more see: What is a Double Rollover in MikesBikes Advanced and How Does It Work?

Just let us know if you do not want a final double rollover for any reason.

If you have any comments or questions please contact us.

Historical MikesBikes Dogs

The MikesBikes Dog has now Retired

We are currently in the process of updating the simulation interface and as part of this process, the MikesBikes Dog will be replaced with a new way of giving students a quick indication of their firm’s health.  As they say, some good things need to end for better things to begin.

As we bid farewell to the MikesBikes Dog, let’s look back and see how it was brought to life.

“Cliks”

In 1997-98,  we were introduced to Cliks, the MikesBikes Advanced Dog.

The ‘smiley’ artwork in the original 1997 MikesBikes CD release was more of a simple Japanese cartoon style created by one of our programmers, James Saito.

Screenshot from the original 1997 release.

Around the same year, Dr. Pete Mazany, the founder of Smartsims hired Robert Chan as the graphic artist. 

Robert then created the MikesBikes dogs as Pete Mazany loved dogs and always had at least a couple around the office.

       

We wanted a quick feedback indicator so students would immediately know how they were doing after a rollover, and the dog image was very well received.  Students wanted to see what else the dog would do and it really helped with student engagement.  It actually helps that the original style of the dog is fairly generic, but still endearing.  Some people thought he was a bear, others though he was a goat.  The success of the image is really in his facial expressions and the simple situations he is posed in.

“Einstein”

“Einstein the Dog” arrived soon after launch of MikesBikes Intro.

Nara Paz created Einstein the Dog as a ‘fresher’ re-imagining of the dog concept in 2006, and we integrated these  into MikesBikes Intro soon after.

 

Although the MikesBikes Dog will be replaced, we will still retain its best elements: giving a quick indication of how the students are doing and providing them with something to look forward to seeing after every rollover.

MikesBikes Intro Hall of Famer, Joe Powell

Interview with the Top Hall of Fame Student: Joe Powell

Joe Powell from Des Moines Area Community College (DMACC) managed to land the #1 spot in the MikesBikes Introduction Hall of Fame!

Joe took the Introduction to Business course taught by Professor Josh Daines over at DMACC. He’s a 41 year old student and a father of 4 returning for a degree in Business Administration. He just graduated a degree in General Studies and got to share the experience of receiving his diploma alongside his wife and daughter in the same ceremony (see photo above). He is now currently working on his second degree.

He never won anything, except for an English contest when he was in 4th grade and a Renaissance Festival tickets last year, but now he managed to successfully land the Top position in the MikesBikes Intro Hall of Fame. This is such an incredible achievement!

We have interviewed Joe to learn about his journey on how he managed to achieve the top spot in the Hall of Fame, his experience and advice to future students.

Smartsims: What is your decision making process within the simulation?

Joe: This is actually the toughest question, I think, that you could ask. My decision making process started out simple, but as the rollovers continued, other factors began influencing my decisions. The first couple rollovers were straightforward: based on the advertising arc, which investments paid off the best? Then the additional product lines, how would the competition respond, what was the best allocation of funds outside of the advertising arc, etc.

Smartsims: What was your strategy going into the simulation?

Joe: I wanted to jump out to an early advantage, allocating funds where they would make the highest return. I wanted to maintain high revenues, high cash-on-hand, and minimize lost sales. I also figured the other firms would implement similar strategies, so I needed to be flexible yet maintain consistent growth. Once I began doubling my SHV every rollover, I focused more on my firm’s progress projections and less on the competition.

Smartsims: How did you begin implementing that strategy?

Joe: I knew the minimum SHV numbers that I wanted to hit at each rollover. I would run practice sim after practice sim until I found the right combination to get to that number. Once I did, I ran more sims to see if I could improve on it. Sometimes it worked, sometimes I made myself frustrated.

Smartsims: How did you familiarize yourself with the simulation?

Joe: I started by opening it up and trying everything. At the beginning of the semester, I did single-player simulations and failed spectacularly. I learned a little here and there, and with the help of some professors at DMACC, I was able to get a grasp on the program.

Smartsims: How would you describe the competition?

Joe: The competition was fun, above all else. The other firms made strategy implementation vital because I just didn’t know what they would do. It was a lot more fun with real people playing instead of just a computer with predictable moves.

Smartsims: What resources did you pull on to develop your winning strategy which led you to be a part of the MikesBikes Introduction Hall of Fame?

Joe: I utilized the Single-Player format first. After about a dozen practices, I had a solid opening strategy. I also talked to MikesBikes guru, DMACC’s own Professor Zarr as well as my Business teacher, Professor Daines, and asked a few questions. Without pointers from them, I wouldn’t have reached the numbers I did. I studied the interviews of previous winners, played around with different strategies, even ran rollovers where all I did was change a few dollars here or there to learn where the benchmarks were. I created my own spreadsheet that helped keep track of money allocations, allowing me to look back on what worked and what didn’t.

Smartsims: What challenges did you face? How did you overcome these?

Joe: At first, my numbers were right where I wanted them. Then, I started getting lost sales and I couldn’t figure out why. My numbers were exactly where I wanted them, and the results should have been predictable. I turned to the offline mode, and it was a life-saver. I strongly suggest anyone in multi-player competitions use the offline mode. It will not predict your opponents’ moves, but it will help you figure out your own.

Smartsims: Was there anything in particular you did that you think helped to prepare yourself?

Joe: I obsessed over this simulation. It wasn’t healthy. I talked about it, I played it, I thought of new strategies while walking around Disney World. My kids rolled their eyes when I would bring it up.

Smartsims: How has participating within a course which uses a business simulation to supplement their teaching materials helped you? What do you think of the business simulation?

Joe: I really liked the sim as part of the curriculum. I mentioned that to the professor during the class review. Learning about the Advertising Mix as well as the Promotion Mix helped understand the importance of allocating funds to specific areas within the sim. Studying it, then putting it into direct action was really a cool experience. I really enjoyed having Mike’s Bikes as part of the class.

Buy and sell capacity in MikesBikes

Buying and Selling Plant Capacity in MikesBikes Advanced

Buying Plant Capacity

Plant can be purchased or sold each period in multiples of 10 SCUs. Each 10 SCU of plant costs $1,600 to buy and any new plant takes one period to be commissioned and become productive.

Selling Plant Capacity

Plant is depreciated in the annual accounts using the diminishing value method, at a rate of 20% per annum. It can also be sold at any time. However the selling price will depend upon the age of the plant, how well it has been maintained, and how much investment has been made into quality systems and setup time reduction upgrades.

If there is any difference between the actual selling price of plant and its book value then that will be reported in the accounts as either a loss or gain on sale. When plant is sold, you lose the use of that plant immediately.