Business Simulator 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

Check out the latest Question of the Week articles here:
Smartsims Support Center header

Press Release: Smartsims Support Center Goes Live!

The Smartsims Support Center is our new simulation knowledge-base.

This live resource enables our simulation users to receive instant answers to their questions, as well as browse a wide range of help topics to guide them through their learning journey.

Video Overview

The Smartsims Support Center works on any device:

Support Center Screenshot on all devices

 

Browse decision areas such as Marketing, Operations, Finance; or specific decision periods:

Business Simulation Marketing Simulation Advertising Simulation  Business Simulation Marketing Simulation Advertising Simulation

 

And users can share their feedback on the help articles, enabling us to continue to improve content available through the knowledge-base:

Was this support article helpful?

 

Where?

You can find the Smartsims Support Center here: https://www.smartsims.com/support

Alternatively, click on new Support button at the top of any of our webpages:  Smartsims Support Center

 

Spread The Word!

We recommend placing a link to the Smartsims Support Center in your Course Syllabus and/or on your Course’s Webpage.

 

This proactive approach takes our current service offering to the next level in user experience.

Of course, our Helpdesk Team continues to be available every day of the year: Contact Us

 

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.

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.

Teaching Foundations of Business at Drexel University


Credit: Drexel University, LeBow School of Business

Drexel University use the MikesBikes Introduction to Business Simulation to teach their freshmen course, Foundations of Business.

Associate Clinical Professor Jodi Cataline describes how the simulations allow her to move beyond purely academic forms of business education. She extracts terminology and concepts from her teaching material and challenges her students to use it in the MikesBikes simulation. Students refer to the competitive nature of MikesBikes which helps build a greater understanding of the fundamentals of business.

 

economic value created

What is Economic Value Created (EVA)?

financial results for all firms

An increasingly popular way of measuring the financial performance of a firm is by looking at the Economic Value Created (often called EVA*) over a specified time span. See the Financial Reports section of the All Reports Menu for the firm’s current Economic Value Created report.

In essence, this measure views the business as an investment which must produce a certain return on the capital invested in it. If it produces more than the required return, then the difference is the economic value created or added (EVA).

The “actual return” is calculated by adjusting the net operating profit after tax to exclude the effects of interest.

The “required return” (or cost of capital) is calculated by adding together the interest charges on debt with the return required by the shareholders. The return required by the shareholders will vary according your firm’s level of risk and will be composed of required dividends and/or increases in share price.

If the actual return is higher than the cost of capital, then the difference is the economic value created. From an economic viewpoint this extra return must be due to some competitive advantage. The question is: How long can this competitive advantage be maintained before competitors come along and copy it?

An example of a simple EVA report is below:

EVA Report in MikesBikes

Notes:

*EVA is a registered Trademark of Stern, Stewart & Co.

Student Looking at Advertising and PR Reach Curve, MikesBikes

Question of the Week: How does the Advertising and PR Reach by Media Curve Work?

Advertising and PR Reach by Media Curve

The reach curves and media viewing habits reflect what proportion of the population you can reach with a given Advertising or Public Relations (PR) mix.  These are the same for both Advertising and PR partly because it is reasonable that the advertising reach and viewing habits should be similar for both product advertising and PR.

The sensitivity to Advertising and PR reflects how much each market segment is influenced by any Advertising or PR they are exposed to.  If a segment has low sensitivity to PR, then even if they are exposed to a lot of it, there will be a much smaller influence than if they are highly sensitive to PR.

If a segment is highly sensitive to Advertising, then there is probably going to be a reasonable market share difference, but if there was low sensitivity to PR then you would probably only see a small market share difference (ie. you are probably wasting a lot of your PR spend and you should look at more effective ways of using that money).

The market segments have different sensitivities, so you need to find balance between Advertising Awareness and PR in each market.

MikesBikes World Champs Smartsims

2017 MikesBikes World Championship Competition Results

“Success is not final, failure is not fatal: it is the courage to continue that counts.” – Winston Churchill

The 2017 MikesBikes World Championship has finished with a bang! Team Exodus from The University of Auckland has secured the top position as 2017’s MikesBikes Champs and have joined the MikesBikes Wall of Champions. Team GOFAST, also from The University of Auckland, came in close second with an impressive performance! These top two teams certainly had the will to succeed and win the competition.

These two teams were neck-and-neck in the last few rounds of the competition battling for first place. Both teams constantly putting pressure on each other to adapt to their market and make growth-orientated decisions.

Our MikesBikes World Champs winning team, Exodus had the following to say:

2017 MikesBikes World Champs Winners
Siyi Tang , William Setiawan , Jiedong Chen, Jayca Y. Siddayao, Mingchang Liang. Robbi A. Harnass of Exodus from The University of Auckland

Our experience with the simulation has been unimaginable. We are glad that we have done the simulation, most especially since none of us have worked in the business industry. By doing the course competition at the University of Auckland, and entering the 2017 MikesBikes World Championship, we learnt so many new things. Such as, how to wisely allocate our marketing budget, how to turn a significant investment in project development into something more profitable in the long run, how to calculate the cause and effect between the decision of repurchasing shares and dividend, and many more. Nevertheless, as much as we are honoured to be called the winner of the 2017 MikesBikes World Championship, let us restate the fact that we are far from perfect. There are many things that we’ve done, which can be further improved. We hope that newcomers will aim to enter the next MikesBikes World Champs and to stand beside us, and the rest of the winners.

A huge congratulations to all the teams who have participated in the 2017 MikesBikes World Champs!

Here are the Final Round’s Rollover Results:

Position
Firm
SHV
Team Members
Institution
1
Exodus $327.81 Siyi Tang | William Setiawan | Jiedong Chen | Jayca Y. Siddayao | Mingchang Liang | Robbi A. Harnass University of Auckland
2
GOFAST $313.41 Harriet Zhang | Golf Tantulaphongse | Xu Wang University of Auckland
3
Infinity $152.80 Sunil Ravindran | Thi Thu Vu | Manfei Cheng | Zhaonan Liu University of Auckland
4
Pedal to the Medal $88.06 Peter Bojsza Drexel University
5
Scooty Puff Legends $86.79 Jamison stewart | Zachary Khan | Nathan Jarrad Linn Benton Community College
6
Square Tires $2.80 Chris Mitchell | Nick Dawson | Darrell Davis Indiana University Southeast
7
Apex Bikes Co. $0.01 Zachary Abel Des Moines Area Community College
8
K2K $0.01 Kimberly Dowe Linn Benton Community College
9
SB Corp. $0.01 Kaushik Shah Midwestern State University
10
Van der Zwan AJ Inc. $0.01 AJ van der Zwan Ithaca College

You can view the current and past winners here.