News Archives

How to Forecast Sales in MikesBikes Introduction

April 20, 2017Student Advice, NewsCamille Canuto

The video below will demonstrate how to make a Sales Forecast for an existing product and a new product in MikesBikes Introduction, as well as the complementary production decisions for both.

We have provided you with the script for the video below to read through:

“This video will demonstrate how to make a Sales Forecast for an existing product and a new product, as well as the complementary production decisions for both.”

How do I conduct a Sales Forecast?

A Sales Forecast is a prediction of the number of units we believe we can sell in the year ahead.

This should be calculated using your predicted market share of the total market size for the year ahead.

Estimated Market Size Next Year x Percentage Market Share

What is our market share?

So what we need to do first is determine what our current market share percentage is. To do this, view the Market Summary Report. We can see for our RC_Rockhopper product, we have a market share of 55.5% of the total unit sales last year. We then need to find out what the total market size will be for the year ahead.

What is the estimated market size next year?

If we look at the Market Information report, we can see that the demand forecast for the year ahead is 42,000 units.

Calculate our Sales Forecast

Therefore, our sales forecast is calculated by our market share of the forecast total market size for the year ahead. In this example that would be 55.5% of 42,000 units. This is 23,310 units.

Now that if you believe that based on your decisions for the year ahead you can increase your market share from last year, you would use this adjusted market share instead of last year’s market share.

For this example we believe our market share will stay the same so our Sales Forecast will be 23,310 units. We enter this into Price screen under “Sales Forecast.”

Once you have entered your decision, click “Apply.”

Note the warning displayed here. This is telling us that our current Planned Production will not allow us to meet our Sales Forecast. This is when the difference is greater than 10%. So we know we need to go to the Production Planner screen to ensure we are producing enough products to meet our Sales Forecast.

Production Planner

We can see on this screen our Sales Forecast of 23,310 units in this screen. We can also see if we have any existing stock from last year, which in this example is zero. So our Planned Production to meet our Sales Forecast for the year ahead is equal to our Sales Forecast.

Enter the figure and click “Apply.”

If we did have any stock to carry over, we would subtract these units from the Planned Production figure.

New Product Sales Forecast

For a new product the challenge is we do not have an existing market share percentage to work with. Therefore, a Sales Forecast for a new product can only be based on the Forecast Total Market Size.

In this example we want to launch into the Road market.

The Market Information report tells us that forecast demand for the year ahead is 6,500 units. If we then look at the Market Summary Report, we see that there were no competitor products in this segment last year. However, given the opportunity an empty market segment creates, we should assume that at least one or two other competitors will also launch into this market. Therefore, it is reasonable for us to expect to secure a third of the Road market segment’s total size, which is approximately 2,160 units. Click “Apply.”

Production

We then need to our Production decision.

Conclusion

This concludes our brief demonstration on how to conduct a sales forecast and make complementary production decisions.

For more in-depth information, you should view the tutorial videos on our website.

If you have any questions, please feel free to email us at help@smartsims.com

How Business Simulations Help Graduates Get Ahead In New England’s Tech Industry

April 20, 2017Teaching Methods, Experiential Education, Employability, Business Simulator, NewsIan McPherson

The tech start up industry in Boston and New England is making a strong comeback after many years of stunted growth. To gain an edge in this competitive industry, recent business graduates from New England universities need something to make them stand out from the crowd. Engaging lectures, hands-on lab sessions, and relevant case studies are necessary elements of a well-designed business course curriculum. But they cannot provide one very crucial thing: experience. This is where business simulations, created by Boston-based Smartsims, enter to provide the tools to nurture fast-thinking, creative, tech-industry-ready graduates.
Continue reading How Business Simulations Help Graduates Get Ahead In New England’s Tech Industry →

Question of the week: Why is spending in Branding important?

April 18, 2017Student Advice, NewsCamille Canuto

“Branding is simply a more efficient way to sell things.”

-Al Ries

Here are the Top 3 reasons why Branding is important in MikesBikes:

1. Branding increases the effectiveness of your product advertising and results in increased product awareness.

2. In the next period, consumers “forget” the advertising to some extent, but any new branding adds cumulatively to what is left.

Note that branding does not contribute to the effect of public relations.

About half of your brand awareness will carry over from the previous period. The curve shows the increase in brand awareness (on top of what is carried over) achieved by various levels of expenditure.

3. This video is an excerpt from the MikesBikes Advanced Sales & Marketing video, which sums up why Branding plays an integral part in your Marketing strategy.

The same principles also apply in MikesBikes Introduction.

Do you have a question suggestion for our next question of the week? Send us a message.

MikesBikes SuperFan Quiz Competition

April 12, 2017Quiz, NewsCamille Canuto

Are you a MikesBikes SuperFan?

Take one of the Quizzes below for the opportunity to be awarded the title of MikesBikes SuperFan and win one of two US$50 Cash Prizes! Participants have up to three attempts to answer the most correct questions in the fastest time.

Like the Smartsims Facebook Page to receive updates and winner announcements.

Competition closes 31 May 2017 (USA EST). Full terms and conditions here.
Continue reading MikesBikes SuperFan Quiz Competition →

Why Action Learning is Essential for Teaching Today’s Students

April 11, 2017Teaching Methods, Experiential Education, Business Simulation, NewsCamille Canuto

Increasing demands on instructors and pressure on tertiary Institutions to provide work-ready graduates, instructors are looking for new ways to engage their students as a means of ensuring success.

What is action learning?

Action learning is not one specific teaching method, but rather a philosophy and an approach which encourages action within a team environment where learning is every participant’s job. All action learning approaches are philosophically rooted in theories of learning from experience, as practiced collaboratively with others through some form of action research.

Education scholars agree upon three principles that form the foundation of any action learning course:

Learning is acquired through action and dedication to the task at hand.
Knowledge creation and utilization are collective activities, wherein, learning becomes everyone’s job.
Users demonstrate a learning-to-learn aptitude, allowing them to question the underlying assumptions of practice.

Why action learning?

In the modern teaching environment, more is needed from teaching faculty in communicating and delivering course content. Socratic and other traditional teaching methods are not engaging students as effectively as they once did. Students now need to be actively involved in their learning, rather than passively participating.

Employing action learning principles within a course enables students to resolve and take action on real problems in real time, and learning while doing so. Participants become engaged within the learning process and learn transferrable skills in the process. Further, by encouraging learning through doing within and among groups, an individual participant realises that their viewpoint is just that – it is no more than a hypothesis. Through this learning outcome, the participant reaches a reflective state. These reflective states are arguably where significant learning is achieved through challenging assumptions and preconceptions about business.

It is thought that action learning also increases an individual’s capacity to collaborate. By being stimulated intellectually by their peers within this environment, they gain access to other people’s worldviews, therefore, enabling them to challenge their own views and behaviours, providing further opportunities for growth. The team-based nature of action learning often encourages new theories or ideas which may not have been reached through traditional teaching methods.

The outcomes from action learning produce greater self-efficacy along with heightened states of autonomy, meaning and responsibility. Authors agree that action learning is the first step for participants in a journey toward greater self-insight, greater capacity to learn from experience, and greater awareness of the political and cultural dimensions of an organization. For organizations, it is often a first step toward linking individual learning with systemic learning and change (Marsick & O’Neil, 1999).

What does action learning look like?

A typical action learning program covers aspects of traditional learning models, where a series of presentations might be given on a specific theory or topic, and then builds on this through applying prior and new knowledge to a live project. This environment then provides intrinsic feedback from the work itself, rather than from an external authority (e.g. graded assignments).

Throughout the course, participants continue to work on the project with assistance from other participants, as well as from qualified facilitators, who help foster an understanding of the work as well as the theories taught. The facilitator in each team is critical to change agency. It is important for them to observe teams during meetings and provide feedback to individual members and/or the team. However, the facilitator in this scenario should not become a supervisor, rather, only to encourage free discussion, reflection, thought and critical analysis.

Assessing action learning

Measurement may require key performance indicators that are not typically used within traditional teaching methods, since individuals and teams create their own workplace reality through ongoing reflection. However, conventional methods for assessment (survey and evaluation/examination) can still be employed based on the learning outcomes of the training or course. Inman and Vernon (1997) suggest the use of narratives and dialogical approaches to assessments, such as scenarios, to embed learning through consensus-building processes.

What forms can action learning take?

One of the more common forms of action learning within higher education is business simulators. These are employed alongside traditional lectures as a teaching or learning resource where students form a management team to run their own virtual company. To succeed in action learning participants must apply their learned knowledge to a live and responsive project (their simulated company). This environment poses multiple different situations and problems that students must address over the course of the simulation.

As the simulation progresses participants receive both intrinsic and extrinsic feedback from the simulation itself, for example Shareholder Value (in MikesBikes Intro & MikesBikes Advanced) and Marketing Contribution (in Music2Go Marketing & AdSim Advertising), and from their group. Business simulations also provide the perfect opportunity to integrate reflective assignments to explore the scenario and identify what students take away from the action learning exercise.

Throughout this process, instructors and professors (which under this philosophy are the learning facilitators), work alongside students to facilitate group discussion. This can be done in class, workshops or group meetings.

Contact us if you would like more information on simulations and action learning, or access to a free demo account for one of our simulations.

Question of the Week: How do we reduce our Manufacturing Cycle Time?

April 10, 2017Student Advice, NewsCamille Canuto

Manufacturing cycle time in MikesBikes Advanced is the time from when an order is received to the factory to when it leaves the factory (to go to the warehouse). It is often measured in weeks and indicates the responsiveness of the production process.

While simply holding finished goods stocks allow rapid fulfillment of a customer’s order, it requires financing (money tied up in stock). Long manufacturing cycle times mean less responsiveness to changes in demand patterns – e.g. if a new competitive product takes the market share. Hence, reducing manufacturing cycle time is desirable where possible. This will usually mean manufacturing with small batch sizes. However, small batch sizes mean frequent setups. Setup times must be reduced to avoid most of the capacity of the machine being taken up on non-product setup time, rather than working on the product.

To get the best trade-off between responsiveness and capacity utilization in a fast changing market, investments in just-in-time systems and computer integrated machinery are required.

Other contributors to the length of the cycle times are:

Number of products
Complexity of products being produced by the firm and;
The firm’s factory capacity

A rough rule of thumb is that production cycle time will increase in proportion to increases in batch size, number of products or product complexity. On the other hand, it will decrease in proportion to any increases in factory capacity.

Do you have a question suggestion for our next question of the week? Send us a message.

7 Reasons Business Simulations Help U.S. Students Succeed in a Global Marketplace

March 29, 2017Experiential Learning, NewsIan McPherson

The world is continually becoming smaller, and today’s students face the very real challenge of competing for jobs in a global marketplace where languages, culture and hands-on experience are critical to a successful job application. Many business students in Boston and other business school hubs across the United States find it difficult to secure a job after obtaining their degree. So what is the best way to bridge the gap between college and the global workplace? Business simulations can help.

Business simulation games encourage active learning, which entails any type of learning where participants are behaviorally and cognitively active and involved. Simulations fill a very deep void that is faced by educational institutions globally, namely being able to provide real experience to prepare students to enter the workforce. They fill this void by complementing theoretical education with a dynamic, reactive, risk-free learning environment for students to engage in and gain confidence in practical business problem solving skills.

Several studies show that experiential learning can significantly improve student outcomes, including not only employability, but also interaction between students (and faculty), cooperation between educational institutions and grades. A 2014 meta analysis in Developments in Business Simulation and Experiential Learning found strong support for the relationship between experiential learning exercises and learning outcomes. Simulations also create more enjoyable and engaging course content.

All professors are naturally concerned about the career prospects of their graduating class. One of the key predictors of success in the workplace is confidence. A 2012 study by the University of Melbourne drawing upon more than 100 interviews with professional staff in large corporates based in Melbourne, New York and Toronto found a strong correlation between confidence and occupational success. Confidence is not something that can be taught, but can only be gained through experience. Professor Darl Kolb of the University of Auckland has been using the MikesBikes Advanced simulation for over 15 years and reports that the confidence acquired by students through using the simulation consistently translates into job interview and workplace success. Hear more about his experience in the video below.

There are many reasons why Smartsims Business Simulations help set students up for post-graduation success. Below are seven of them.

1. Risk-Free Learning

Business strategy games are an excellent way to practice real-world business decision-making skills in a risk-free simulated learning environment. In a simulation, students are encouraged to try out different strategies, observe the results, monitor market fluctuations and then pivot their direction, all without real-life repercussions. They are thus able to navigate the landscape of a real company (which could be based anywhere in the world) in a safe environment.

2. Multiplayer Environment

In online business simulation games, students form the management team of a virtual company that competes against other student-run companies in the same market for a slice of the consumer pie. These teams could potentially be formed anywhere in the world to improve cross-campus cooperation, create exciting competitions between partner universities and get students ready to compete in any market, anywhere.

3. Interactive Gameplay

Another appeal of business simulations is the real-time feedback they offer on any decision. This not only makes the learning experience far more involved, but also helps students practice a range of different strategies in a short period of time and discover what works best.

4. Accelerated Performance Through Experiential Learning

Experiential learning has been shown to be more effective than other kinds of training, as shown in the meta analysis cited above. Partly this is because simulations allow students to learn by experiencing the consequences of their actions and repeating different strategies to determine different outcomes.

5. Full Immersion

In business management games, students go one step further towards full immersion since their decisions truly determine the fate of the company and they get to experience real loss or gain. Not only does this give students a greater sense of purpose, but it also encourages them to think far more carefully about their actions when they don’t only exist in theory.

6. Rewards!

With business simulation games, students experience rewards in multiple ways (e.g. through amazing rankings on the leaderboard or a market leader position for shareholder value). The most valuable rewards, however, are improved decision making skills, teamwork and proactive responsiveness – all within the context of the economy of their choosing.

7. Employability Focus

Simulations are designed with an employability focus that aims to develop career skills, including how to develop proposals, work in teams, solve problems and resolve conflicts. The ultimate objective is equipping students with the skills to achieve workplace success and obtain a job placement in the country of their choosing. That’s an outcome we can all get on board with!

Question of the week: What factors influence the Products Specs Index in the Market Summary Report?

March 29, 2017Student Advice, NewsCamille Canuto

The Product Specs is a statement of how a design is made, what it is intended to do and if it complies with the preferences of each market segment. The ideal product attribute levels desired by each segment and the actual attribute levels for all products on the market are in the Market Segments and Product Attributes Report (go to Design and Development menu ->Reports tab)

The Product Specs Index which you can see in the Market Summary Report on the other hand is based on the distance from the ideal consumer preferences relative to the radius of influence of a segment on the perceptual map.

What does this mean for you?

If, on the perceptual map, a product is at a point which is exactly halfway between the ideal segment center point and the outer ring, then your product spec index will be approximately 0.50. If you are on the outer ring, your index will be closer to 0.01. If you hit close to the center, then it will be closer to 1.0. It does not matter whether you are above or below the ideal point – what matters is your distance away from it relative to the radius of influence for the market segment.

How do you determine what the product specifications are?

The Market Segments and Product Attributes report shows the exact values last period. Go to Reports->Marketing Reports->Product Reports to view this report.
Note that the Perceptual Map chart (which you can find in the Key Reports menu) also show the ideal consumer preferences for last period. The ideal points tend to shift over time in MikesBikes Advanced due to changes in the preferences of the consumers. If you aim for what you currently see on the map, then you are likely to find the segment center points have shifted slightly when you see the results after the rollover.

Do you have a question suggestion for our next question of the week? Click here to fill out a form or email it through to help@smartsims.com.

2017 QS World University Rankings

March 22, 2017NewsCamille Canuto

We are proud to announce that 8 Smartsims Business Simulation users entered this year’s QS World Ranking’s Top 150 Schools in Social Sciences and Management. A big congratulations from all of us here at Smartsims!

The QS World Rankings by Subject ranks the world’s top universities in individual subject areas. Each of the subject rankings is compiled using four components. First through academic reputation, second through employer reputation, as well as research citations per paper. In addition, they also assess the school’s H-index, which is a way of measuring both the productivity and impact of the published work of a scientist or scholar. These four components are combined to produce the results for each of the subject ranking, with weightings adjusted for each discipline.

The full list can be viewed here.

Question of the Week: How do we ensure that our factory is operating at its optimum level?

March 22, 2017Student Advice, NewsCamille Canuto

In MikesBikes, as in real life, your factory is most effective when the capacity of your workers is well matched to the capacity of your plant.

The formula used to calculate your Total Capacity (SCU) is:

Total Capacity (SCU) = √ (Factory Workforce Capacity SCU * Plant Capacity SCU)

This equation allows you to emphasize one form of capacity over another depending on how each approach fits with your strategic plan. For example, you can employ more workers immediately whereas you have to wait 12 months for new plant to become available.

Just be aware that if your Factory Workforce Capacity and Plant Capacity get too far out of balance then together they will not be working to their full potential.

Check your Manufacturing Responsiveness report when deciding whether to hire more or workers or purchase more Plant.

Here are some examples on how to calculate your Total Capacity:

Example 1

Factory Workforce Capacity = 30,000 SCUs and Plant Capacity = 30,000 SCUs

Total Capacity = √30,000 * 30,000 = 30,000 SCUs

Example 2

Factory Workforce Capacity = 40,000 SCUs and Plant Capacity = 15,000 SCUs

Total Capacity = √40,000 * 15,000 = 24,495 SCUs

Example 3

Factory Workforce Capacity= 50,000 SCUs and Plant Capacity = 25,000 SCUs

Total Capacity = √50,000 * 25,000 = 35, 355 SCUs

Do you have a question suggestion for our next question of the week? Click here to fill out a form or email it through to help@smartsims.com.