Red Team SimulationBy:Jacb MilanJiaze ZhouTian Zhang

Factories

• 16 firms in USA• 10 firms in Asia• Round 1 built 3 in USA and 5 in Asia• Round 3 built 1 in Asia• Round 4 built 2 in Asia• Round 6 built 1 in USA and 2 in Asia• Goals: Increase Production• Final Result: 8800 production capacity in

USA, 5500 production capacity in Asia

Contract Manufacturing

• Every round we used them all instead of producing by ourselves

• Decided to produce more of Tech 1 and Tech 4 due to the success we had with both

R & D

• All of our Technologies had 6 features• At each round we would assess how much money

we had left and then decide whether to upgrade technologies or not

• Too much investing lead to problems later in simulation

Shares

• At the end of Round 1, we sold some shares to get some capital in order to build 8 firms

• And we want to buyback shares in the last 2 rounds, but we were short on capital and unable to do so by the end of the simulation

Market Share

• Good sale rates helped us get decent market share.• Low prices in Asia sold well• We found that more features in Europe and the US

sold better than Asia• Low price in USA and Europe did not guarantee

good sales every round

Progress Through Halfway Point

Freefall After Midpoint

• Round 6, saw us have a bad ROS, ROE, & EBIT

• Round 7 continued our drop in all the same categories

• Round 6 failures: Too much money in R&D(3 new plants) & too much money in contract manufacturing

• Round 7 failures: Managed R&D costs better, but still too much for contract manufacturing.

• Round 7 our group started to climb out of debt

Improving to the Finish

• Round 7: Sales improved, but still in debt• Round 8: Better R&D costs, sales continue to

improve, and finally out of debt• Round 9: No R&D costs, sales improve to $2.8

million, and $438,300 out of debt• Round 10: No R&D costs, most manufacturing was

contracted, finished $356,336 out of debt

End of Simulation

What We Learned

• Lowest prices don’t always mean sales success• Don’t over-invest in R&D• Don’t keep too much money on hand• This is a given, but keeping costs on production is

vital to success