Topsim Man II PMan en 52p

TERTIA Edusoft - Management Game

TOPSIM - General Management II

Participants’ Manual

Edition 10.0-English

Copyright © TERTIA Edusoft GmbH D-72070 Tübingen

TOPSIM - General Management II Participants' manual

Table of contents

Page

1. Preface..................................................................................................................2 1.1 What is TOPSIM - General Management II ? ..........................................................2 1.2 The training objectives of TOPSIM - General Management II ..................................2 1.3 The business management content and variables of TOPSIM - General

Management II .......................................................................................................3 2. Introduction ............................................................................................................5 2.1 The Daily Observer / Business Section ...................................................................5 2.2 In-house memo of COPYFIX Inc.............................................................................6 3. The functional areas of COPYFIX Inc. ...............................................................10 3.1 Sales / Inventory ..................................................................................................10 3.1.1 Product description and Product policy .................................................................10 3.1.2 Pricing policy........................................................................................................11 3.1.3 Publicity policy .....................................................................................................11 3.1.3.1 Advertising ...........................................................................................................11 3.1.3.2 Corporate Identity (CI)..........................................................................................12 3.1.3.3 Corporate image ..................................................................................................12 3.1.4 Distribution policy.................................................................................................12 3.1.4.1 Utilisation of sales personnel ................................................................................12 3.1.4.2 Distribution costs..................................................................................................13 3.1.5 Marketing Mix ......................................................................................................13 3.1.6 Bulk buyers / Requests for bids ............................................................................14 3.1.6.1 Sales to bulk buyers .............................................................................................14 3.1.6.2 Sales through requests for bids (tenders) .............................................................14 3.1.7 Incapacity to supply..............................................................................................14 3.1.8 Market research report for your branch of business ..............................................15 3.1.9 Products Inventory Copy I ....................................................................................15 3.2 Research & Development .....................................................................................16 3.3 Purchasing...........................................................................................................17 3.3.1 Demand and price conditions ...............................................................................17 3.3.2 Inventory Input materials/parts .............................................................................17 3.4 Production ...........................................................................................................18 3.4.1 The inventory of production lines at the start of the game .....................................18 3.4.2 Demand for production capacity ...........................................................................18 3.4.3 Possibilities of influencing production capacity......................................................18 3.4.3.1 Investments .........................................................................................................19 3.4.3.2 Disinvestments.....................................................................................................19 3.4.3.3 Maintenance ........................................................................................................19 3.4.3.4 Rationalisation .....................................................................................................20 3.4.3.5 Overtime allotted to production lines.....................................................................20 3.4.4 Investments in environmental technology..............................................................21 3.4.5 Rework ................................................................................................................21 3.4.6 Factory materials .................................................................................................21 3.5 Personnel ............................................................................................................22 3.5.1 Labor force at the start of the game......................................................................22 3.5.2 Potential changes to the workforce .......................................................................22 3.5.2.1 Recruitment and Dismissals .................................................................................22 3.5.2.2 Adjustment of the workforce (Purchasing and Administration) ...............................22 3.5.3 Additional staff costs ............................................................................................23 3.5.4 Employee pension plan ........................................................................................23


3.5.5 Personnel report of the cost centers .....................................................................24 3.5.6 Overtime production staff .....................................................................................24 3.5.7 Productivity ..........................................................................................................24 3.5.7.1 Process optimisation projects ...............................................................................24 3.5.7.2 In-service training.................................................................................................24 3.5.7.3 Productivity index I ...............................................................................................25 3.5.7.4 Experience and Productivity .................................................................................25 3.5.7.5 Actual Productivity ...............................................................................................25 3.5.8 Absenteeism ........................................................................................................25 3.5.9 Production staff table ...........................................................................................25 3.6 Finance and Accounting .......................................................................................26 3.6.1 Customer paying patterns.....................................................................................26 3.6.2 Financial investments...........................................................................................26 3.6.3 Loans...................................................................................................................26 3.6.3.1 Medium-term loans...............................................................................................26 3.6.3.2 Long-term loans ...................................................................................................26 3.6.3.3 Overdraft loans ....................................................................................................26 3.6.4 Taxation...............................................................................................................27 3.6.5 Dividend payments...............................................................................................27 3.6.6 Share price and the value of the company ............................................................27 3.6.7 Shareholder Earnings...........................................................................................27 3.6.8 Business reports in your branch of industry...........................................................28 3.6.9 Accounting ...........................................................................................................28 4. COPYFIX Inc.'s results at the end of period 0 ...................................................30 4.1 Decisions .............................................................................................................31 4.2 Reports ................................................................................................................32 4.2.1 Market results and Inventory values .....................................................................32 4.2.2 Production plants - Environmental technology.......................................................33 4.2.3 Human resources and product development .........................................................34 4.2.4 Cost type accounting, Cost center accounts (Departmental accounting) ................35 4.2.5 Cost accounting (Unit-of-output costing) ...............................................................36 4.2.6 Profit and Loss Statement and Cash flow..............................................................37 4.2.7 Financial Report and Balance Sheet .....................................................................38 4.2.8 Overall company results .......................................................................................39 4.2.9 Out-of-line situations ............................................................................................41 4.2.10 Market research report .........................................................................................42 4.2.11 Business reports from the industry........................................................................43 4.2.12 Profit and lost statement and balance sheet with US-GAAP norm: ........................44 4.2.13 Financial report and balance sheet (US-GAAP) ....................................................45 Index ............................................................................................................................46 Appendix

TOPSIM - General Management II Participants' manual Page 1

TOPSIM General Management II

Preface


1. Preface

1.1 What is TOPSIM - General Management II ?

TOPSIM - General Management II is a business management game that establishes a link between business management theory and business management practice. The simulation presents a realistic model of an industrial company and thus provides participants with the opportunity to gain: • lasting practical experience, • quickly, and • in a risk-free environment. TOPSIM - General Management II is an interactive teaching and learning system (action lear-ning) based on the premise:

1.2 The training objectives of TOPSIM - General Management II

Recognising and formulating the general conditions for commercial success

Experiencing links in business management by adopting an holistic approach

Defining goals and strategies and realising them in an economic and ecological environment

Deriving practice-related insights and decisions from industry figures

Understanding the fundamentals of marketing

Learning to use the instruments of cost accounting, income analysis, product costing, and marginal costing

Coping with complex decision making in uncertain situations

Keeping control of a business in difficult situations

Developing a sense for the essential and the global

Learning to think and act in an inter-disciplinary way

Learning how to define and solve problems

Practicing effective communication through visualisation

Arriving at decisions within a team and by using personal computer-supported planning models


1.3 The business management content and variables of TOPSIM - General Management II

TOPSIM

Company targets - Planning and establishing economic, social and

ecological targets - Controlling targets

General Management

II

Distribution (Selling) - Competitive Analysis - Marketing mix - Product policy - Profit contribution costing as a basis for

marketing decisions

Purchasing/Warehousing - Determining optimal order sizes - Problems of warehousing

Production - Investment decisions - Internal production or External procurement - Loading schedules

Research & Development - Strategies for the technological and ecological

improvement of products - The development of new products

Finance and Accounting - Financial Planning - External Accounting

(Balance Sheets and Income Statements) - Internal Accounting (Cost Accounting,

Contribution Costing) - Ratios in company management

Personnel - Demand Analysis and Staff Adjustment - Staff productivity - Problems of staff absenteeism and staff turnover

Economic conditions - Inflation - Economic activity - Exchange rate - Real net output



Introduction

We welcome you as new members of the managing

board of COPYFIX Inc. !


2. Introduction

2.1 The Daily Observer / Business Section

COPYFIX INC.:Drastic changes at board level - Satisfactory results

In recent weeks there have been increasing rumours in the business press that COPYFIX is about to clear out its management board. At today's balance sheet press conference a satisfactory result was reported. At the same time the president of the supervisory board announced the names of the new management board members. The company hopes to provide fresh impetus through these changes in the face of growing competition, especially from abroad.

In the period under review the company achieved satisfactory results with its black and white photocopier Copy I. With sales of 129.00 mEuro1) and a market share of 20% the company can show similar results to those of its competitors.

This year was no exception in that no supplier was able to gain a clear domination over the competitors. One advantage for the 1222 employees is that they are working for a company with a solid background - or so it seems.

The stockholders are also very optimistic about future developments, having an operating income of 12.00 mEuro, as well as a 4.93 mEuro profit for the year.

The following proposal has been put forward concerning the distribution of profits: The stockholders should receive half of the profits and the other half should be used for revenue reserves.

Net assets of app. 30.00 mEuro are counterbalanced by pension reserves of app. 12.00 mEuro and liabilities of 25.00 mEuro. The cashflow of app. 14.00 mEuro is surely a foundation for future investments, but will this be sufficient in the long term? If these trends continue, the antiquated production lines, which in no way meet modern environmental standards, will next year lead to fiscal penalties of 1.50 mEuro to be paid to the Environmental Authorities.

So despite the recent positive results, the future of the company is still in some doubt. Will the company be able to retain its market share if it continues to pursue the same corporate policies? Which strategies are going to be devised in order to come to terms with the increasingly tight knit and complex nature of the business environment?

At the press conference there was no evidence of a clear concept for the coming years. At a recent employee meeting, the latter accused the existing management of thinking in a confused, rather than practical manner.

It can only be hoped that the new management team faces the urgent issues of the coming decade with convincing concepts and goals.

What this region needs above all is new and safe jobs.

1) mEuro= million Euro


2.2 In-house memo of COPYFIX Inc.

From: Former management To: New management

Dear Successors, In view of the uncongenial press reports over the last months my management colleagues and I have decided for age reasons (I remind you that we are all 64) to give way to young and maybe more dynamic and creative colleagues.

You now face the difficult yet exciting task of familiarising yourselves with the work involved in running COPYFIX Inc. We submit all the reports from the last business year knowing full well, however, that figures alone cannot explain and reveal "how our business is doing.”

First of all, the following diagram provides you with an outline of the various operating units, company procedures, and cost centers as well as the existing management reports of COPYFIX Inc.

Fig. : Surface of the Participant´s system of TOPSIM – General Management II Presently we are producing our black and white copier Copy I with some success. Last year we sold 43000 units at a price of 3000 Euro per machine. We supply mainly to specialised retail dealers, although sometimes also to large industrial buyers such as MEGRO. In addition, we now and then bid for procurement tenders put out by public authorities.


From: Former management To: New management

Until now there have been six colleagues responsible for the following areas:

Fig.: Former organisational structure of COPYFIX Inc.

The chairmanship of the management board has changed each year on a revolving basis. In the past, cooperation within the firm has been marked by problems brought on by conflicting departmental interests. These problems have often been settled in a practical way and have fortunately benefited the company as w hole.

With hindsight I feel I must level one criticism at all of us: We sometimes had too simplistic and optimistic a picture of what was going on in reality. So I would like to give you, as our successors, the following advice: Try to gain a clear and unprejudiced picture of reality and remember that each day begins anew and also that successful strategies are becoming more and more short-lived. So it is important that the company's "files" should be full of alternative strategies so that it can react swiftly to change.

In view of the fact that everybody is talking about "lean management" these days, it would be advisable to consider whether the board really needs six members. Surely an alternative would be to combine areas of responsibility and reduce the number of members to three or four. Or another possibility would be to plan everything together without dividing up responsibility into organisational units. Try from the start to find an efficient organisational system and the right way of proceeding at board level.

The diagram following page shows the various areas of responsibility, typical issues that have required our constant attention, and the system of communication between the board members.

We also enclosed a report by external consultants concerning the individual member’s areas of work on the executive board and their views about the activities of their colleges. As a matter of fact, everyone just looks at his or her tasks, as well as other people’s tasks from their own personal point of view.

Following this in-house memorandum you will find detailed information on the various areas of our company. As the new chairman of the supervisory board I look forward to future board meetings with you. Finally, my colleagues and I would like to take this opportunity to wish you a most successful future!

Yours sincerely Paul Smith (Chairman of the Supervisory Board, COPYFIX Inc.)

Mike HughesPurchasing

Peter RabbitR & D

Walter HuntProduction

Henry WinterSales

Phil MillerPersonnel

Paul SmithFinance and Accounting


Task areas, typical concerns, and the system of communication of the previous managing board of COPYFIX Inc.

• Size of the whole market for the next period ? • What are our competitors going to do ? • Our market share should be ... • What are our expenses for the marketing-mix ? • What do bulk buyers and request for bids achieve ? • How high are the costs of goods manufactured ?

• What product attributes do customers desire ?

• Which product attributes do we wish to provide ?

• What are the costs involved in achieving this ?

• How shall we react to competitors‘ developments ?

• How much can the plants produce ? • How much must/should be produced ? • How much do lean management

projects accomplish ? • How high should productivity be ? • What are the influences on the costs of

goods manufactured ?

• What are the overall effects of expenditure on incidental personnel costs, training and lean production ?

• What are the staff requirements in production for the coming periods ?

Sales Manager

Head of Purchasing Production Manager

Personnel Manager

Manager Finance and Accounting

• What does the discount schedule achieve ?

• How high are the storage costs ? • How are the financial expenses for

specific quantities purchased ? • What are the material requirements

for the coming period ?

• How is income generated and where are costs incurred ?

• How much profit must be made in order to survive ?

• Are we working in an economic way ? • Where is there potential for cost

reduction ? • What is necessary in order to

optimise the value of the company ?

Manager R & D



The functional areas of COPYFIX Inc.

COPYFIX Inc.

The functional areas

Sales

Production

Research & Development

Personnel

Purchasing

Finance and Accounting


3. The functional areas of COPYFIX Inc.

3.1 Sales / Inventory

3.1.1 Product description and Product policy

COPYFIX Inc. sells the high-quality black and white copier Copy I (referred to as "product 1- old" in the reports under point 4.2). It possesses the following technical characteristics:

Technical data of Copy I

Type Desk model

Copying speed 25 A4 copies per minute. 12 A3 copies per minute.

Copy pre-setting 1 - 99

Dimensions W D H 804 664 415 mm

Weight 80 kg

First copy Approx. 7 Sec.

Paper supply 2 cassettes of 200 sheets (A3, A4)

Copy formats Cassette A5 - A3

Sheet feeding A5 - A3

Copying material Paper, Cassette, sheet feeding Transparency Self-adhesive labels

Accessories Interrupter key for sheet feeding Checkout procedure system Automat. zero setting

The technology and the environment-friendliness of the copiers available on the market are examined regularly by the Which? consumer magazine. In comparison with other copiers COPY I is middle of the range as far as these characteristics are concerned. Result of Which? quality control test for Copy I (Figures for period 0):

Technology index: 100.0 Ecology index: 100.0

Publications such as Which? are considered as a guideline for consumers. Consequently, the indices that are awarded are to be seen as important product attributes: As the indices for technology and ecology improve, the market acceptance for Copy I becomes higher.


3.1.2 Pricing policy

When competing with other suppliers, the price is an important marketing instrument that takes immediate effect. At the start of the game the price on the domestic market (referred to as "market 1" in the reports in section 4.2) is 3000 Euro. The following fundamental link can be made between the price and the sales volume:

Market researchers feel that the following reaction can be expected (provided that all other variables remain constant).

Price (EUR/unit) Demand (units)

3150 (+ 5%) App. 36000 3000 (Period 0) 43000 (Period 0) 2850 (- 5%) App. 53000

3.1.3 Publicity policy

3.1.3.1 Advertising

Advertising expenses normally increase demand. They have an effect over several periods yet have a most pronounced effect in the period when they are incurred. The effect of advertising on demand can be represented on a graph as follows:

Price in EUR per unit

"Double bend inprice-demand function"

Demand (Units)

3000

430000

Demand in units

Advertising expenses in mEUR

43000

6.0


In the period at the start of the game the advertising budget for market 1 is 6.00 mEuro. Experts are of the opinion that with advertising expenses of 7.00 mEuro sales of app. 45000 could have been achieved. Once the expenses reached double this amount, the sales would only increase very slowly.

3.1.3.2 Corporate Identity (CI)

A further measure that can be adopted within the Publicity policy is the consistent cultivation of a striking company image (corporate identity) in order to exert a positive influence on sales in an indirect way. In the period 0 spending amounted to 2.00 mEuro. There is some disagreement among experts concerning the concrete effect of corporate identity. It is clear, however, that it is an important influencing factor for the whole company and has a relatively long-lasting effect.

3.1.3.3 Corporate image

In every period, the image of a company in the public eye is ascertained and recorded in the form of an index. The expenses of CI are a considerable influencing factor. However, additional factors such as the environmental damage caused by the company and the degree of environment-friendliness of the product play an important role. The corporate image has an effect on the stock exchange price of the company.

3.1.4 Distribution policy

3.1.4.1 Utilisation of sales personnel

In period 1 Copy I is sold to specialised retail traders on the domestic market (= market I) by a sales staff of 100. An increase in the utilisation of personnel improves sales opportunities and has an effect over several periods. Experts are of the opinion that a sales force of 110 persons could increase sales up to app. 45000 units. Generally the following relationship arises between the utilisation of sales personnel and sales:

Sales in units

Number of sales staff

43000

100


3.1.4.2 Distribution costs

The supply of copiers to specialised retail traders involves packaging and transport costs of 25.00 Euro per machine.

3.1.5 Marketing Mix

The sales of Copy I are dependent on the selection and implementation of all the marketing instruments. They are to be combined and adapted to each other in such a way that they achieve the desired effect on the market as a package of measures (marketing mix). The components of the marketing mix are:

Product attributes (Product policy) Price (Pricing policy) Expenses for Publicity (Publicity policy)

• Advertising expenses

• Expenses for Corporate Identity

• Corporate Image

Utilisation of sales staff (Distribution policy) When planning your marketing mix you should remember that its impact is also directly influenced by the marketing efforts of your competitors on the market and the overall economic conditions.

Sales

marketing mixYour company's

Productpolicy

Pricing Communications Distribution

Customer

Price Index

Situation of

demandEnvironmental indicesof production lines

policy policy policy

economy

Productpolicy

Pricingpolicy

Communicationspolicy

Distributionpolicy

marketing mixcompetitors'


3.1.6 Bulk buyers / Requests for bids

In addition to sales to the specialised retail trade, there are further possibilities that can be created on the domestic market by responding to requests for bids, such as those made by public authorities. Furthermore, private bulk buyers sometimes invite bids also.

3.1.6.1 Sales to bulk buyers

In the case of these sales in which all companies can become involved, the bulk buyer fixes the price and the maximum supply quantity per company. So a smaller quantity can also be supplied, if necessary. The supply of goods is affected within the decision-making period and has priority over the supply to the specialised retail trade. No distribution costs are incurred in this case. This distribution channel may be used to reduce inventory. Contribution margins are also usually lower compared to sales retail stores. Cost of goods manufactured (CGM) will serve as the basis for information when making this decision. This figure can be found in the "Unit-of-output costing"-report from the cost accounting department.

3.1.6.2 Sales through requests for bids (tenders)

In this case, public authorities have a specific demand for copiers in larger quantities. A request for a bid contains the required quantity. Every company can respond to a tender by bidding. The bid may not exceed the quoted price on the domestic market. The company offering the lowest price is awarded the contract. Results of new sales and revenue from a successful bid occur in the following period. In this case as well, delivering the tender amount has priority over supplying the specialised retail trade. In the event of identical price quotations, the company whose product possesses the better product attributes receives the contract. There are no distribution costs in this case either. Cost of goods manufactured (CGM) will also serve as the basis for information when calculating the bid price. This figure can be found in the "Unit-of-output costing"-report from the cost accounting department.

3.1.7 Incapacity to supply

Copy I is supplied according to the following priorities:

Supply on the basis of a contract resulting from request for bids Supply to bulk buyer on the basis of a commitment Supply to specialised retail trade (Market 1)

If, as a consequence of your marketing policy, you create a higher demand than your company is able to satisfy, the result is an incapacity to supply. 80% of the demand that has remained unsatisfied in market 1 is distributed amongst the other companies according to their existing market shares.


3.1.8 Market research report for your branch of business

In order to obtain information on the marketing efforts of competitors, you may in any period purchase a market research report for 0.10 mEuro. The market research report contains the following information:

Market research report I

Advertising Sales Revenue Product indices

Com-pany

Price EUR MEUR % Units % MEUR % Techn. Ecolog.

1 3000 6.00 20.0 43000 20.0 129.0 20.0 100.0 100.0

2 3000 6.00 20.0 43000 20.0 129.0 20.0 100.0 100.0

3 3000 6.00 20.0 43000 20.0 129.0 20.0 100.0 100.0

4 3000 6.00 20.0 43000 20.0 129.0 20.0 100.0 100.0

5 3000 6.00 20.0 43000 20.0 129.0 20.0 100.0 100.0

Product 1 Market 1

Ø/Σ 3000 30.00 100.0 215000 100.0 645.0 100.0 100.0 100.0

Com- Prod. Prod. 1 Product lines Expenses R & D Sales/Distr.

pany staff O/R/N Typ A Typ B Typ C (MEUR) (no. pers.)

1 868 O 4 0 0 5,0 100

2 868 O 4 0 0 5,0 100

3 868 O 4 0 0 5,0 100

4 868 O 4 0 0 5,0 100

Other data

5 868 O 4 0 0 5,0 100

3.1.9 Products Inventory Copy I

The storage costs for the finished goods amount to:

0.10 mEURO per 1000 units (closing inventory)

Here is an excerpt from the inventory report:

Inventory for finished goods

Quantity (Units)

Cost of goods manufactured (EUR per unit)

Inventory figures(mEUR)

Opening inventory 7000 1880 13.16

+ Addition from production 40000 2033 81.30

- Retirements to sales 43000 2010 86.42

= Closing inventory 4000 2010 8.04

The closing inventory in period 0 amounts to 4000 units valued at a cost of production of 2010 Euro per unit. The value is calculated by employing compensatory pricing of the opening inventory and the additions to inventory.

7000 (Units) * 1880 (EUR/Unit) + 40000 (Units) * 2033 (EUR/Unit)

7000 (Units) + 40000 (Units)

= 2010 EUR/Unit


3.2 Research & Development

Companies must continue to further develop their products due to technological progress, increasing environmental awareness on the part of customers, and growing pressures from competitors. For the further development of the product Copy I (referred to as "Product 1-old" under point 4.2 in the reports) COPYFIX Inc. can take the following measures:

Measures in the area of Result Effects

1. Technology Staff recruitment in

area of R & D. Increasing quality of technology. Technology index rises

- Market share increases.

- Rework costs rise on account of increased technical demands. (e.g. demands for precision, increased complexity)

2. Ecology Expenses for external

consultancy services in the area of ecology.

Increased ecological sustainability. Ecology index rises

- Market share rises.

3. Value analysis Expenses for external

consultancy services in the area of value analysis.

Increased economic efficiency. Value analysis index rises

- Reduction of materials usage.

- Increased costs through rework.

- No influence on market share

Decisions for period 0:

Decision area Decision Level of effect indices

Technology 34 employees 100.0

Ecology 2,5 mEURO 100.0

Value analysis 1.0 mEURO 100.0

Excerpt from the report "Product Development" in period 0: Product development Technology Ecology Value analysis

(mEUR) (mEUR) (mEUR) Products Period Cumul. Index Period Cumul. Index Period Cumul. Index

Prod. 1-old 1.50 8.20 100.0 2.50 5.00 100.0 1.00 1.00 100.0 Note: Expenditure on technology during the period = No. of staff * Labor costs = 34 * 44 000 Euro


3.3 Purchasing

3.3.1 Demand and price conditions

With a value analysis index of 100.0, one unit of "input material/parts" must be employed for one copier. Value analysis reduces the required material input, i.e. with a value analysis index of more than 100.00, less than one unit is needed. The demand for input material/parts is calculated as follows:

Demand in units = Units of Copy I to be produced Value analysis index * 100

At the present time the following graduated price range and volume scale from the supplier are valid:

Volume scale (units) EUR per unit

0 to < 30000 650

30000 to < 50000 550

50000 to < 70000 450

70000 upwards 400

The input material/parts ordered in one period are already available for production at the start of the period in question. If in one period there is insufficient input material available, then the deficiency is offset. This is achieved automatically by employing special measures such as express consignments, air freight etc. all of which have to be paid for through a mark-up of 20%.

3.3.2 Inventory Input materials/parts

The storage costs for input material/parts are

0.05 mEURO per 1000 units of closing inventory

The closing inventory in period 0 amounts to 10000 units valued at 540 Euro *) per unit. Inventory for input material/parts

Volume (Units)

Inventory values (EUR/unit) (mEUR)

Opening inventory 20000 525 10.50

+ Additions Purchasing

- Retirements from production

30000

40000

550

540

16.50

21.60

= Closing Inventory 10000 540 5.40

*) This value is calculated by employing compensatory pricing of the opening inventory and

additions to inventory.


3.4 Production

3.4.1 The inventory of production lines at the start of the game

At present COPYFIX Inc. possesses four production lines of the type A. The company gives each production line a number. The following data is valid for the plants that are in use at the present time:

Prod.- lines

Type No.

Normal capacity (Units)

Procure-ment

period

Acquisit. value

(mEUR)

Remain.term

(Periods)

Deprec.(mEUR/period)

Net- book val. (mEUR)

Other fixed costs

(mEUR)

Environm. index

A 1 8000 - 8 12.50 1 1.25 1.25 1.50 83.0

A 2 9000 - 7 15.00 2 1.50 3.00 1.00 90.0

A 3 11500 - 6 20.00 3 2.00 6.00 0.50 95.0

A 4 13500 - 5 20.00 4 2.00 8.00 0.25 98.0

Total / 42000 67.50 6.75 18.25 3.25 91.5

Eventhough the production lines are of the same type, they vary according to their capacities and to the extent of damage they cause the environment. This performance data remains the same during the entire life of the machines. Other fixed costs from the production lines are, for example, inspection and insurance costs resulting from contracts. Once production lines are depreciated, they may still be utilised fully for production purposes.

3.4.2 Demand for production capacity

One available unit of capacity is required to produce one Copy I.

3.4.3 Possibilities of influencing production capacity

The available production capacity in a period can be influenced by the following measures:

Investments in new plants

Disinvestments of lines

Maintenance

Rationalisation

Overtime allotted to production lines


3.4.3.1 Investments

For the production of Copy I, new production lines of the type A, B, and/or C can be purchased. The differences between the types are illustrated in the following table:

Type of- line

Purchase price

(mEUR)

Term (Periods)

Normal capacity (Units/ period)

Other fixed costs

(mEUR/ period)

Environm. index

Rem. revenue (% of the net book

value)

Rationa-lisation factor

A 20.00 10 14000 0.30 100.0 20 1.00

B 25.00 10 18000 2.00 105.0 25 1.00

C 30.00 15 22000 2.50 110.0 30 1.00

A maximum of 9 production lines may be purchased per type. Newly acquired production lines are immediately available for production in the period when the order is made. For possibilities for rationalisation of the production lines see point 3.4.3.4.

3.4.3.2 Disinvestments

Production lines can be disinvested (junked). The production line that has been junked is then no longer available at the start of the period in question. The production line that has been junked is immediately depreciated at the value of the net book value (extraordinary expenditure). Proceeds are made from the scrapping of the machine. These proceeds are measured as a percentage of the net book value. The percentage varies according to the different types of lines.

Production line Type A Type B Type C

Proceeds from scrap (Residual revenue) in % of net book value

20 25 30

In one period a maximum of three production lines of the same type may be disinvested. In order to disinvest a certain production line, you are required to enter the number of the line in the decision form. The effects of disinvestments in the Profit and Loss Account: Depreciation (Net book value) = Extraordinary expenditure Residual revenue = Extraordinary income (Proceeds from scrap) Financial Report: Residual revenue = Deposit from disinvestments (Proceeds from scrap)

3.4.3.3 Maintenance

The production lines are subject to constant wear and tear. The resulting reduction in capacity can be avoided or held in check by ensuring that parts of the plant in need of repair are regularly maintained. This also applies to newly acquired production lines.


The following figures (there is an interpolation between the figures) are available for the relationship (which is valid for all production lines) between the maintenance costs and the maintenance factor, i.e. the degree of availability of the capacity.

Maintenance costs per period and production line in mEUR

Degree of availability in %

Type A Type B Type C of the normal capacity

0.10 0.10 0.10 50

0.50 0.40 0.40 70

0.70 0.60 0.60 80

1.00 0.90 0.80 95

2.50 2.20 2.00 97

3.00 2.70 2.40 99

4.00 3.60 3.20 100

Normal capacity * Maintenance factor = Available capacity I

The minimum level of maintenance expenses per production line amounts to 0.10 mEuro. (You may enter values that lie between those given in the table.)

3.4.3.4 Rationalisation

The available capacity of the production lines can be further increased by rationalisation measures. Rationalisation can only be carried out uniformly for all the production lines of one type. The degree of rationalisation achieved is expressed in terms of a rationalisation factor and is dependent on the cumulative rationalisation expenses in mEuro since period 0 for the respective production lines. Newly acquired production lines have an initial rationalisation factor of 1.00. The entire rationalisation expenditure from a period is claimed in the same period as costs.

Available capacity I * Rationalisation factor = Available capacity II

3.4.3.5 Overtime allotted to production lines

Overtime can further increase the available capacity II, but only up to a maximum of 10%. The program automatically schedules overtime when the planned production volume is higher than the available capacity. If overtime is necessary then there are extra costs for supervision and operation of 2.50 mEuro in the period (step-fixed costs).

Available capacity II * Overtime factor = Available capacity III


3.4.4 Investments in environmental technology

By investing in environmental technology for things such as additional clarification plants or filters (end-of-pipe investments) you can reduce the overall amount of environmental damage caused by your company. (You can improve the ecology index of the production lines themselves only by replacing certain lines.) If the environmental damage indicator drops below the legally required level of 100.0 (Index), then in the following period a fiscal charge per missing index point must be paid to the Environmental Authorities. On the basis of the values in period 0 1.50 mEuro must be paid in period 1.

Environmental index of production lines (Level End of period 0) Index 91.50

Cumulative investment in environmental plants (Level End of period 0) mEUR 1.50

Improvement in environmental indices (Level End of period 0) Points 1.00

Environmental damage indicator of production lines (end of period 0) Index 92.50

Charge payable to authorities next period mEUR 1.50

Investments in the environment are depreciated over 10 years using the straight-line method. Your company's environmental damage indicator has a direct influence on the following factors:

Sales The absence rate of the production staff Corporate image Share price

3.4.5 Rework

Incurred rework (rejects) expenditures are included in production costs. These are dependent on the following factors:

Technology index Higher technology leads to more rework as a result of increased complexity of the product.

Value analysis index Intensified value analysis increases the expenditure on rework.

Level of additional staff costs

Higher additional staff costs lead to a reduction of rework (rejects) as a result of increased staff motivation.

3.4.6 Factory materials

Costs of 50 Euro are incurred (in period 0) for factory materials per manufactured Copy I. The factory materials are purchased automatically and are always readily available in the required amounts.


3.5 Personnel

3.5.1 Labor force at the start of the game

The staff situation of COPYFIX Inc. in period 0 can be represented as follows:

Cost center

Closing workforce

Salaries in period 0 in EUR without

additional staff costs

Purchasing 18 30000

Administration 202 28000

Production 868 30000

Research & Development 34 44000

Marketing/Sales 100 40000

Total 1222

The cost center Administration has the following areas:

Human resources management Finance and Accounting General Administration

3.5.2 Potential changes to the workforce

3.5.2.1 Recruitment and Dismissals

For the functional area Production you may recruit and dismiss staff. In the case of R & D as well as in Sales you determine the closing workforce. In this way, cases of recruitment and dismissal arise automatically at the same time as staff turnover is taken into account. Each new case of recruitment in a cost center leads to non-recurring costs of 12500 Euro. The dismissal costs (non-recurring) amount to 10000 Euro. If more than 5% of the staff from the areas of production, R&D and Sales are dismissed, then the employee council (game supervisor) can demand that a social plan be worked out. Redeployment in the areas of R&D (from product 1 to product 2 or vice versa) and Sales (e.g. from market 1 to market 2) do not constitute recruitment or dismissals. The maximum number of new hirings in production can be restricted by possible bottlenecks on the labor market. In the functional areas of the company, the workforce is also influenced by employees’ giving notice to quit = staff turnover. The rate of staff turnover depends greatly on the level of the additional staff costs.

3.5.2.2 Adjustment of the workforce (Purchasing and Administration)

The number of employees in the areas Purchasing and Administration is dependent on the company's sales revenue. In the event of fluctuations in sales the necessary number of employees is adjusted automatically through recruitments and dismissals. In administration, however, an unrelated-sales share of 2.50 mEuro in personnel costs remain in the initial situation.


Cost center Administration- Required staff dependent on the total sales revenue:

100

200

300

50 100 150 200 250

50/150

75/170100/190

125/200150/215

175/228200/240

250/260

Total sales revenue in MEUR

Required staff

250

150

75 125 175 225

225/250

Cost center Purchasing - Required staff dependent on total sales revenue:

1050 100 150 200 250

Total sales revenue in m EUR

Required staff

12141618202224

75/14

100/16125/18

150/20175/21

200/22

250/24

75 125 175 225

225/23

3.5.3 Additional staff costs

The most recent figures for the additional staff costs were 40% of the respective wage and salary totals. The minimum rate of 37% corresponds to the legal regulations such as the employer's contribution to the social benefits, paid holiday etc. The additional staff costs can be increased at will, but may only be reduced, at most by 3%, when compared with the previous period. The additional staff costs have a direct influence on the rate of staff turnover as well as on the absenteeism of the employees of the individual cost centers.

3.5.4 Employee pension plan

COPYFIX Inc. has agreed to provide all employees with a pension plan. Therefore, in each period pension reserves accrue that amount to 5% of the wages and salaries total.


3.5.5 Personnel report of the cost centers

In each period you will receive the following table describing the workforce, staff changes, and personnel costs of the cost centers. Excerpt from the report Period 0

STAFF BREAKDOWN IN COST CENTERS

Number of persons Purchasing Administr. Production R & D Sales/Dist. Total

Opening workforce 20 200 870 30 100 1220

+ Recruitment 0 10 50 5 9 74

- Dismissals 1 0 0 0 0 1

- Staff turnover 1 8 52 1 9 71

= Closing workforce 18 202 868 34 100 1222

Wages & Salaries (1) mEUR 0.54 5.66 26.04 1.50 4.00 37.73

Recrt./Dism/Train. mEUR 0.01 0.12 1.13 0.06 0.11 1.43

Additional staff costs mEUR 0.22 2.26 10.42 0.60 1.60 15.09

Pension reserves. mEUR 0.03 0.28 1.30 0.07 0.20 1.89

Total staff costs mEUR 0.79 8.33 38.88 2.23 5.91 56.15

Additional staff costs in % of Wages and Salaries: 40.0 Training Production mEUR: 0.5

(1) without costs for overtime

3.5.6 Overtime production staff

The normal level of productivity of an employee in production is 50 copiers of the type "Copy I" per period. Overtime is automatically scheduled when the planned production volume cannot be produced with the available staff numbers (or with the available production capacity.) The amount of possible overtime is limited. Presently the limit is 10%. (s. also 3.4.3.5) In the case of overtime, whether caused by production staff or production lines, extra costs of 2.50 mEuro per period are incurred for supervision and operation. (s. also 3.4.3.5) An additional premium of 25% on wages and salaries generated by overtime is paid to production staff. (These additional premiums are not recorded in the personnel report.)

3.5.7 Productivity

3.5.7.1 Process optimisation projects

With the help of process optimisation projects the work processes in production can be rationalised, which leads in turn to an increase in staff productivity. However, such projects lead to an increase in absenteeism. In period 0 the process optimisation index is 1.00. Advisors mean that with an investment of 2.0 mEuro an index of approximately 1,05 can be attained. Once an index value has been reached it loses 0.01 points in effect per period ( "forgetting how to do things" ). The minimum value remains 1.00.

3.5.7.2 In-service training

Expenditure on in-service production staff training improves the skill of the employees and leads to increased productivity. Expenditure on training increases the staff qualifications


index (period 0 = 1.00). This value is also reduced by 0.01 points per period due to employees “forgetting how to do things.” This value, however, can go below 1.00.

3.5.7.3 Productivity index I

The productivity index I is derived from the indices for process optimisation and staff qualifications.

Process optimisation index * Staff qualifications index = Productivity index I

3.5.7.4 Experience and Productivity

As more units are produced, the production workers gain in experience, which results in an increase in productivity. This whole process is termed experience or learning curve. It results in productivity index II. This index amounts to 1.00 in the starting situation. This gain in productivity will not deteriorate over time.

3.5.7.5 Actual Productivity

Therefore, the actual productivity of an employee in production is:

Normal productivity (e.g. 50 Copy I / period)

* productivity index I * productivity index II

3.5.8 Absenteeism

Absenteeism reduces the utilisable staff in production. The following factors influence the absence rate:

Influencing factor Measure for influencing factor

Effect on absenteeism

Additional staff costs

Process optimisation projects

Env. index of production lines

In-service training measures

Staff increase (Recruitment)

Staff cuts (Dismissals)

3.5.9 Production staff table

Excerpt from report, Values for period 0 PRODUCTION STAFF: AVAILABILITY AND PRODUCTIVITY Workforce (Persons) 868 Process optimisation index 1.00

- Absences (Persons) 68 * Staff qualifications index 1.00

= Utilisable staff (Persons) 800 = Productivity index I 1.00


3.6 Finance and Accounting

3.6.1 Customer paying patterns

• 80% of the sales revenue lead to deposits in the current period, • 20% lead to deposits in the following period.

This is also valid for bulk buyers and requests for tenders. The deposits for the following period are shown in the balance sheet of the current period under the item "Accounts receivable".

3.6.2 Financial investments

In any period the company's executives can purchase securities - as long as they have surplus liquid funds at their disposal. In the initial period of the game the interest rate is 5.0%. The yield on interest is credited in the current period. The securities themselves are automatically sold and paid back in the following period.

3.6.3 Loans

3.6.3.1 Medium-term loans

According to company requirements a medium-term loan may be taken up in any period. (Term = 1 period). The interest on this loan is paid during the current period and the loan is paid back automatically in the following period. The interest rate is calculated according to the amount of equity capital from the previous period. The following interest rates were valid in period 0.

• Up to the amount of the equity capital 12.0 % • Up to twice the amount of the equity capital 14.0 % • Above twice the amount of the equity capital 16.0 %

In the period 0-1 the equity capital amounted to 25.00 mEuro, the medium-term loans in period 0 were 25.00 mEuro. The interest for period 0 was calculated as follows: 25.00 mEuro loan at 12.0% 3.00 mEuro interest

3.6.3.2 Long-term loans

You always have the possibility to redeem medium-term loans with long-term loans with a ten-year term. The advantage gained here in terms of the interest is counterbalanced by the disadvantage that a premature repayment of the loan is ruled out. The interest rate amounts to 10.0% in the initial period, but it may be adjusted according to the general development of interest rates.

3.6.3.3 Overdraft loans

If in one period the available liquidity is insufficient to cover all the financial obligations, the company is automatically granted an overdraft loan in order to avoid insolvency. The cash balance must amount to at least 0.10 mEuro. A bridging loan (credit in current account) is taken up until a cash balance of 0.10 mEuro is achieved. The interest rate for the overdraft loan amounted to 16.0% in period 0. The interest is due in the current period. The overdraft loan itself is paid back automatically in the following period.


3.6.4 Taxation

The company's tax burden amounts to 45% of the

profit or loss on ordinary activities ± extraordinary profit or loss.

Possible losses are carried forward and are set off against the pre-tax profit for the year until a positive balance remains on which tax then must be paid. The payment of tax is realised in the current period.

3.6.5 Dividend payments

Each year COPYFIX Inc. must pay out at least 30% of the post-tax profit for the year as dividends in accordance with its charter. A high payout, however, has a positive influence on the company's share price.

3.6.6 Share price and the value of the company

In each period the share price is determined as the basis for the value of the company. The following factors have an influence on the share price:

Influencing factor

When the value of the influencing

factor increases ...

The influence on the share price is

Equity capital for period

Post-tax profit for period

Declared dividends for period

Cumulatively declared dividends

Return on sales

Cumulative expenses for marketing mix

Corporate image

Environmental index of production lines

Sales compared with competitors

Planning quality

Debt-equity ratio

3.6.7 Shareholder Earnings

The shareholders of the COPYFIX Inc. evaluate their shares according to how much they have contributed to an increase in their personnel assets. This increase includes the dividends paid out over the periods and the increase in share prices. Both these values are recorded as shareholder earnings in the ratios of the company. (At the starting situation no values are available.)


3.6.8 Business reports in your branch of industry

As part of the business reporting service you receive in every period and free of charge a statement with the most important data from the profit and loss accounts as well as the balance sheets of the competing companies.

3.6.9 Accounting

COPYFIX Inc. has a modern accounting department, which was set up to ensure that comparisons within the branch of industry would be possible. The evaluations of the company's accounting department which consists of cost type accounting, cost center accounting (departmental costing) and unit-of-output costing, form an important base for planning and controlling costs. The evaluations of the financial accounting department comply with legal requirements and show the financial situation of the company. Contribution costing analysis is being drafted. For the analysis of cost center reports the following information is of interest: Depreciation for land and buildings: The depreciation allowance per period for land and buildings is 0.25 mEuro. This depreciation allowance is allocated to the cost centers as follows:

Purchasing Production R & D Sales Administration

5% 70% 5% 5% 15%

Maintenance in administration: The machinery in the administration department (copiers, computers etc.) must also be maintained so that they function correctly. To ensure this there are fixed maintenance contracts costing 1.00 mEuro per period. Administration costs: In period 0 an unrelated-sales amount of 2.50 mEuro from the wages and salaries is debited from the cost center "Administration" (overheads). Also see point 3.5.2.2. The remaining wages and salaries of the administration are allocated to the product as direct costs.



COPYFIX Inc.'s results End of period 0


4. COPYFIX Inc.'s results at the end of period 0

The former management board has left documents relating to its decisions as well as the following reports on the developments in period 1.

Market results and Inventory values Page 32

Production plants- Environmental technology Page 33

Human resources and product development Page 34

Cost type accounting, Cost center accounts Page 35

Cost accounting (Unit-of-output costing) Page 36

Profit and Loss Statement and Cash Flow Page 37

Financial Report and Balance Sheet Seite 38

Overall company results Page 39

Out-of-line situations Page 41

Market research report Page 42

Business reports from the industry Page 43

Profit and Loss statement and Balance Sheet Page 44

Financial Report and Cash Flow (US-GAAP) Page 45


4.1 Decisions

Sales/Distribution Produkt 1 Market 1 Price (EUR/unit) 3000.00 EUR Advertising (mEUR) 6.00 Sales (No. of pers.) 100

Corporate Identity (mEUR) 2.00

Mrk. Research Report Yes:

Product development Techno- Ecology Value logy analysis (No. of

pers.) (mEUR) (mEUR)

Product 1 - old 34 2.50 1.00

Purchasing Product 1 Input material/parts (units) 30000

Production Product 1 Production volume (units) 40000 Production lines Type A Type B Type C Investments

(number of new lines) --- --- --- Disinvestment

(numbers of the lines) --- --- --- --- --- --- --- --- --- Maintenance

(mEUR/line) 1.5 --- --- Rationalisation

(mEUR/line) 0.0 --- --- Process optimisation

projects (mEUR) 0.0 Training (mEUR) 0.5 Investments in environ-

mental plants (mEUR) 1.5 Additional staff costs (%) 40.0

Production staff Recruitm. / Dismiss.(-) 50

Financing (mEUR) Medium-term loan 25.0

Long-term loan 0.0

Purchase of securities 0.0

Dividends (% from profit) 50

Planned figures (mEUR) Sales revenue

Product 1: Market 1 130.0

Return on equity (%) 20.0 Cash flow 14.0 Note on the planned figures for the "Sales revenue Product 1 - Market 1": They do not include any sales with bulk buyers and/or from requests for bids.


4.2 Reports

4.2.1 Market results and Inventory values ╔══════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠══════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 1 MARKET RESULTS and INVENTORY VALUES ║ ║ ║ ╚══════════════════════════════════════════════════════════════════════════════╝ ╔══════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ MARKET RESULTS ║ ║ ║ ╠═══════════════╤══════════════════════╤═══════════════════╤═══════════════════╣ ║ │ │ COMPANY 1 │ TOTAL ║ ╟───────────────┼──────────────────────┼───────────────────┼───────────────────╢ ║ MARKET 1 │ Price (EUR/Unit) │ 3000 │ 3000 ║ ║ │ Sales (Units) │ 43000 │ 215000 ║ ║ │ Revenue (mEUR) │ 129,00 │ 645,00 ║ ║ ├──────────────────────┼───────────────────┼───────────────────╢ ║ │ Market share (%) │ 20,00 │ 100,00 ║ ╠═══════════════╪══════════════════════╪═══════════════════╪═══════════════════╣ ║ TOTAL │ Sales (Units) │ 43000 │ 215000 ║ ║ │ Revenue (mEUR) │ 129,00 │ 645,00 ║ ╚═══════════════╧══════════════════════╧═══════════════════╧═══════════════════╝ ╔══════════════════════════════════════════════════════════════════════════════╗ ║ INVENTORY ║ ╠══════════════════════════════════════╤═════════════╤═════════════════════════╣ ║ INVENTORY FOR │ │ Inventory values ║ ║ INPUT MATERIALS/PARTS │ Quantity ├────────────┬────────────╢ ║ │ (Units) │ (EUR/Unit) │ (mEUR) ║ ╟──────────────────────────────────────┼─────────────┼────────────┼────────────╢ ║ Opening inventory │ 20000 │ 525 │ 10,50 ║ ╟──────────────────────────────────────┼─────────────┼────────────┼────────────╢ ║ + Addition from supplier │ 30000 │ 550 │ 16,50 ║ ║ - Retirem. to Production │ 40000 │ 540 │ 21,60 ║ ╟──────────────────────────────────────┼─────────────┼────────────┼────────────╢ ║ = Closing inventory │ 10000 │ 540 │ 5,40 ║ ╚══════════════════════════════════════╧═════════════╧════════════╧════════════╝ ╔══════════════════════════════════════════════════════════════════════════════╗ ║ INVENTORY ║ ╠══════════════════════════════════════╤═════════════╤════════════╤════════════╣ ║ INVENTORY FOR │ │Co. of goods│ Inventory ║ ║ FINISHED PRODUCTS │ Quantity │manufactured│ values ║ ║ │ (Units) │ (EUR/Unit) │ (mEUR) ║ ╟──────────────────────────────────────┼─────────────┼────────────┼────────────╢ ║ Opening inventory │ 7000 │ 1880 │ 13,16 ║ ╟──────────────────────────────────────┼─────────────┼────────────┼────────────╢ ║ + Addition from production │ 40000 │ 2033 │ 81,30 ║ ║ - Retirem. to distribution │ 43000 │ 2010 │ 86,42 ║ ╟──────────────────────────────────────┼─────────────┼────────────┼────────────╢ ║ = Closing inventory │ 4000 │ 2010 │ 8,04 ║ ╚══════════════════════════════════════╧═════════════╧════════════╧════════════╝ Note: The inventory figures in EUR/unit are based on average values, see point 3.1.9.


4.2.2 Production plants - Environmental technology ╔═════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period: 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠═════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 2 PRODUCTION PLANTS - ENVIRONMENTAL TECHNOLOGY ║ ║ ║ ╚═════════════════════════════════════════════════════════════════════════════════════════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════╗ ║ KEY DATA ON PRODUCTION LINES ║ ╟───────────────────────────┬──────────┬──────────┬──────────┬──────────┬──────────┬──────────╢ ║ │Procurem.-│Acquisit.-│ Remaining│Depreciat.│ Net book │ Other ║ ║ │ period │ value │ life │ (mEUR/ │ value │ fixed co.║ ║ Production lines │ │ (mEUR) │(periods) │ period) │ (mEUR) │ (mEUR) ║ ╟───────────────────────────┼──────────┼──────────┼──────────┼──────────┼──────────┼──────────╢ ║ Type A Line No. 1 │ -8 │ 12,50 │ 1 │ 1,25 │ 1,25 │ 1,50 ║ ║ Type A Line No. 2 │ -7 │ 15,00 │ 2 │ 1,50 │ 3,00 │ 1,00 ║ ║ Type A Line No. 3 │ -6 │ 20,00 │ 3 │ 2,00 │ 6,00 │ 0,50 ║ ║ Type A Line No. 4 │ -5 │ 20,00 │ 4 │ 2,00 │ 8,00 │ 0,25 ║ ╟───────────────────────────┼──────────┼──────────┼──────────┼──────────┼──────────┼──────────╢ ║ Total │ │ 67,50 │ │ 6,75 │ 18,25 │ 3,25 ║ ╚═══════════════════════════╧══════════╧══════════╧══════════╧══════════╧══════════╧══════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════╗ ║ CAPACITIES OF PRODUCTION LINES ║ ╟───────────────────────────┬────────────┬──────────────┬──────────────┬────────────┬─────────╢ ║ │Normal cap. │ Maintenance │Rationalisat. │Availbl.cap.│ Envirnm.║ ║ Production lines │ (Units) │ (mEUR)│Factor│cu.mEUR│Factor│ (Units) │ Index ║ ╟───────────────────────────┼────────────┼───────┼──────┼───────┼──────┼────────────┼─────────╢ ║ Type A Line No. 1 │ 8000 │ 1,5 │ 0,96 │ 0,0 │ 1,00 │ 7653 │ 83,0 ║ ║ Type A Line No. 2 │ 9000 │ 1,5 │ 0,96 │ 0,0 │ 1,00 │ 8610 │ 90,0 ║ ║ Type A Line No. 3 │ 11500 │ 1,5 │ 0,96 │ 0,0 │ 1,00 │ 11002 │ 95,0 ║ ║ Type A Line No. 4 │ 13500 │ 1,5 │ 0,96 │ 0,0 │ 1,00 │ 12915 │ 98,0 ║ ╟───────────────────────────┼────────────┼───────┼──────┼───────┼──────┼────────────┼─────────╢ ║ Total │ 42000 │ 6,0 │ │ 0,0 │ │ 40180 │∅ 91,5 ║ ╚═══════════════════════════╧════════════╧═══════╧══════╧═══════╧══════╧════════════╧═════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════╗ ║ PRODUCTION STAFF : AVAILABILITY AND PRODUCTIVITY ║ ╟──────────────────────────────────────┬──────────┬────────────────────────────────┬──────────╢ ║ Workforce (Persons) │ 868 │ Process optimisation index │ 1,00 ║ ║ - Absence (Persons) │ 68 │ * Staff qualifications index │ 1,00 ║ ╟──────────────────────────────────────┼──────────┼────────────────────────────────┼──────────╢ ║ = Utilisable staff (Persons) │ 800 │ = Productivity index I │ 1,00 ║ ╚══════════════════════════════════════╧══════════╧════════════════════════════════╧══════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════╗ ║ EXPERIENCE AND PRODUCTIVITY ║ ╟───────────────┬──────────────────────┬──────────┬────────────────────────────────┬──────────╢ ║ Product 1 │ Cum.prod.prev.period │ 0 │ Productivity index II (per.) │ 1,00 ║ ╚═══════════════╧══════════════════════╧══════════╧════════════════════════════════╧══════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UTILISATION RATE OF PRODUCTION LINES ║ ╟───────────────────────────┬────────────┬───────────────┬───────────────┬────────────────────╢ ║ │ Production │Production cap.│Product. staff │ Allocation in % ║ ║ │ (Units) │Factor│Required│Factor│Required│ Req.cap.│ Req.pers.║ ╟───────────────────────────┼────────────┼──────┼────────┼──────┼────────┼─────────┼──────────╢ ║ Product 1 │ 40000 │ 1,0 │ 40000 │ 50 │ 800 │ 99,6 │ 100,0 ║ ╟───────────────────────────┼────────────┼──────┼────────┼──────┼────────┼─────────┼──────────╢ ║ Utilisation (%) │ │ │ 99,6 │ │ 100,0 │ │ ║ ╚═══════════════════════════╧════════════╧══════╧════════╧══════╧════════╧═════════╧══════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════╗ ║ ENVIRONMENTAL TECHNOLOGY ║ ╟──────────────────────────────────────────────────────────────────┬──────────────────────────╢ ║ Environmental index of production lines (Index) │ 91,50 ║ ║ Cumulative investment in environmental plants (mEUR) │ 1,50 ║ ║ Improvement of environmental indices (Points) │ 1,00 ║ ║ Environmental damage indicator for the company (Index) │ 92,50 ║ ║ Tax payable to Environmental Authority next period (mEUR) │ 1,50 ║ ╚══════════════════════════════════════════════════════════════════╧══════════════════════════╝

Notes: Fully depreciated production lines are still available for production. The maintenance factor is issued as a rounded up figure (internally: 0.956666)


4.2.3 Human resources and product development ╔════════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠════════════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 3 HUMAN RESOURCES AND PRODUCT DEVELOPMENT ║ ║ ║ ╚════════════════════════════════════════════════════════════════════════════════════════════════════╝ ╔════════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ STAFF BREAKDOWN IN COST CENTERS ║ ║ ║ ╠════════════════════════════╤═══════════╤═══════════╤═══════════╤═══════════╤═══════════╤═══════════╣ ║ Number of persons │Purchasing │Administr. │Production │ R & D │Sales/Dist.│ Total ║ ╟────────────────────────────┼───────────┼───────────┼───────────┼───────────┼───────────┼───────────╢ ║ Opening workforce │ 20 │ 200 │ 870 │ 30 │ 100 │ 1220 ║ ╟────────────────────────────┼───────────┼───────────┼───────────┼───────────┼───────────┼───────────╢ ║ + Recruitment │ 0 │ 10 │ 50 │ 5 │ 9 │ 74 ║ ║ - Dismissals │ 1 │ 0 │ 0 │ 0 │ 0 │ 1 ║ ║ - Staff turnover │ 1 │ 8 │ 52 │ 1 │ 9 │ 71 ║ ╟────────────────────────────┼───────────┼───────────┼───────────┼───────────┼───────────┼───────────╢ ║ = Closing workforce │ 18 │ 202 │ 868 │ 34 │ 100 │ 1222 ║ ╠════════════════════════════╪═══════════╪═══════════╪═══════════╪═══════════╪═══════════╪═══════════╣ ║ Wages & Salaries (1) mEUR│ 0,54 │ 5,66 │ 26,04 │ 1,50 │ 4,00 │ 37,73 ║ ║ Recrt./Dism./Train. mEUR│ 0,01 │ 0,12 │ 1,13 │ 0,06 │ 0,11 │ 1,43 ║ ║ Additional staff co. mEUR│ 0,22 │ 2,26 │ 10,42 │ 0,60 │ 1,60 │ 15,09 ║ ║ Pension reserves mEUR│ 0,03 │ 0,28 │ 1,30 │ 0,07 │ 0,20 │ 1,89 ║ ╟────────────────────────────┼───────────┼───────────┼───────────┼───────────┼───────────┼───────────╢ ║ Total staff costs mEUR│ 0,79 │ 8,33 │ 38,88 │ 2,23 │ 5,91 │ 56,15 ║ ╠════════════════════════════╧═══════════╧═══════════╧═══════════╧═══════════╧═══════════╧═══════════╣ ║ ║ ║ Additional staff costs in % of Wages and Salaries: 40,0 ║ ║ Training (Production) mEUR: 0,5 ║ ╚════════════════════════════════════════════════════════════════════════════════════════════════════╝ (1) without overtime costs ╔════════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ PRODUCT DEVELOPMENT ║ ║ ║ ╠════════════════════════════╤═══════════════════════╤═══════════════════════╤═══════════════════════╣ ║ │ TECHNOLOGY │ ECOLOGY │ VALUE ANALYSIS ║ ╟────────────────────────────┼───────────────┬───────┼───────────────┬───────┼───────────────┬───────╢ ║ │ (mEUR) │ │ (mEUR) │ │ (mEUR) │ ║ ║ PRODUCTS │Period │ Cumul.│ Index │Period │ Cumul.│ Index │Period │ Cumul.│ Index ║ ╟────────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────╢ ║ Product 1 old │ 1,5 │ 8,2 │ 100,0 │ 2,5 │ 5,0 │ 100,0 │ 1,0 │ 1,0 │ 100,0 ║ ╚════════════════════════════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╝

Note: The value of 1.50 mEuro for product development in the column "Technology" corresponds

to the item "Wages and Salaries" of the cost center R & D with 1.50 mEuro.


4.2.4 Cost type accounting, Cost center accounts (Departmental accounting) ╔══════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠══════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 4 COST TYPE, COST CENTER ACCOUNTING ║ ║ ║ ╚══════════════════════════════════════════════════════════════════════════════╝ ╔══════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ COST CENTER ACCOUNT (mEUR) ║ ║ ║ ╠════════════════════════╤═════════════════╤═════════════════╤═════════════════╣ ║ │ │ │ ║ ║ COST TYPES │ Total │ Overheads │ Direct costs ║ ╠════════════════════════╪═════════════════╪═════════════════╪═════════════════╣ ║ MATERIAL COSTS │ │ │ ║ ║ Input material/parts │ 21,60 │ │ 21,60 ║ ║ Factory material │ 2,00 │ │ 2,00 ║ ╟────────────────────────┼─────────────────┼─────────────────┼─────────────────╢ ║ PERSONNEL COSTS │ │ │ ║ ║ Wages and Salaries (1)│ 37,73 │ 10,58 │ 27,16 ║ ║ Recrt./Dism./Training │ 1,43 │ 1,43 │ ║ ║ Additional staff costs│ 15,09 │ 4,23 │ 10,86 ║ ║ Pension reserves │ 1,89 │ 0,53 │ 1,36 ║ ╟────────────────────────┼─────────────────┼─────────────────┼─────────────────╢ ║ DEPRECIATION │ │ │ ║ ║ Buildings │ 0,25 │ 0,25 │ ║ ║ Production lines │ 6,75 │ 6,75 │ ║ ║ Environmental technol.│ 0,15 │ 0,15 │ ║ ╟────────────────────────┼─────────────────┼─────────────────┼─────────────────╢ ║ OTHER COSTS │ │ │ ║ ║ Other fixed costs │ 3,25 │ 3,25 │ ║ ║ Maintenance/Rational. │ 7,00 │ 7,00 │ ║ ║ Process optimis.proj. │ 0,00 │ 0,00 │ ║ ║ Environmental tax │ 0,00 │ 0,00 │ ║ ║ Rework/Rejects │ 1,19 │ 0,00 │ 1,19 ║ ║ Storage costs │ 0,90 │ 0,90 │ ║ ║ Advert./Market re./CI │ 8,10 │ 2,10 │ 6,00 ║ ║ Other costs R & D │ 3,50 │ 0,00 │ 3,50 ║ ║ Transport costs │ 1,08 │ 0,00 │ 1,08 ║ ╟────────────────────────┼─────────────────┼─────────────────┼─────────────────╢ ║ TOTAL COSTS │ 111,91 │ 37,17 │ 74,74 ║ ╚════════════════════════╧═════════════════╧═════════════════╧═════════════════╝ (1) Overtime included ╔══════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ COST CENTER ACCOUNTS (mEUR) ║ ║ ║ ╠════════════════════════╤════════╤════════════════════════════════════════════╣ ║ │ │ COST CENTERS ║ ║ │ ├────────┬────────┬────────┬────────┬────────╢ ║ COST TYPES │ TOTAL │ Purchs.│ Prodcn.│ R & D │Sls/Dist│ Admin. ║ ╠════════════════════════╪════════╪════════╪════════╪════════╪════════╪════════╣ ║ PERSONNEL COSTS │ │ │ │ │ │ ║ ║ Wages and Salaries │ 10,58 │ 0,54 │ 2,04 │ 1,50 │ 4,00 │ 2,50 ║ ║ Recrt./Dism./Training │ 1,43 │ 0,01 │ 1,13 │ 0,06 │ 0,11 │ 0,12 ║ ║ Additional staff costs│ 4,23 │ 0,22 │ 0,82 │ 0,60 │ 1,60 │ 1,00 ║ ║ Pension reserves │ 0,53 │ 0,03 │ 0,10 │ 0,07 │ 0,20 │ 0,13 ║ ╟────────────────────────┼────────┼────────┼────────┼────────┼────────┼────────╢ ║ DEPRECIATION │ │ │ │ │ │ ║ ║ Buildings │ 0,25 │ 0,01 │ 0,18 │ 0,01 │ 0,01 │ 0,04 ║ ║ Production lines │ 6,75 │ │ 6,75 │ │ │ ║ ║ Environmental technol.│ 0,15 │ │ 0,15 │ │ │ ║ ╟────────────────────────┼────────┼────────┼────────┼────────┼────────┼────────╢ ║ OTHER COSTS │ │ │ │ │ │ ║ ║ Other fixed costs │ 3,25 │ 0,00 │ 3,25 │ 0,00 │ 0,00 │ 0,00 ║ ║ Maintenance/Rational. │ 7,00 │ │ 6,00 │ │ │ 1,00 ║ ║ Process optimis.proj. │ 0,00 │ │ 0,00 │ │ │ ║ ║ Environmental tax │ 0,00 │ │ 0,00 │ │ │ ║ ║ Storage costs │ 0,90 │ 0,50 │ │ │ 0,40 │ ║ ║ Advert./Market re./CI │ 2,10 │ │ │ │ 2,10 │ ║ ║ Other costs R & D │ 0,00 │ │ │ 0,00 │ │ ║ ╟────────────────────────┼────────┼────────┼────────┼────────┼────────┼────────╢ ║ TOTAL COSTS │ 37,17 │ 1,31 │ 20,41 │ 2,24 │ 8,42 │ 4,79 ║ ╚════════════════════════╧════════╧════════╧════════╧════════╧════════╧════════╝ Note: Cost type accounting includes all the costs incurred within the company. The overheads of 37.17 mEuro are the costs of the cost centers. The direct costs are costs which can be allocated directly and immediately to

Copy I as a product. Example: The utilised production staff appears under "Wages and Salaries" as direct costs

in cost type accounting together with the direct costs of the administration. The "Wages and Salaries" for the absences of the production staff appear in the

cost center Production (overheads).


4.2.5 Cost accounting (Unit-of-output costing) ╔══════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠══════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 5 COST ACCOUNTING (Unit-of-output costing) ║ ║ ║ ╚══════════════════════════════════════════════════════════════════════════════╝ ╔═════════════════════════════════════════════════════════╤════════════════════╗ ║ │ ║ ║ COST ACCOUNTING (Costs in mEUR) │ ║ ╠═════════════════════════════════════════════════════════╪════════════════════╣ ║ Material │ 21,60 ║ ║ + Factory material │ 2,00 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = Direct material │ 23,60 ║ ║ + Indirect material │ 1,31 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = Material costs │ 24,91 ║ ║ Production direct costs (1) │ 35,99 ║ ║ + Production overheads (cost center production) │ 20,41 ║ ║ = Production costs │ 56,40 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = COST OF GOODS MANUFACTURED CGM │ 81,30 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ + R & D Direct costs (ecol.+ val.anal.) │ 3,50 ║ ║ + Overheads (cost c. R & D) │ 2,24 ║ ║ + Sales/Distribution Direct costs (advert. + transp.)│ 7,08 ║ ║ + Overheads (cost c.sales) │ 8,42 ║ ║ + Administration Direct costs (2) │ 4,58 ║ ║ + Overheads (cost c.admin.) │ 4,79 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = COST OF PRODUCTION │ 111,91 ║ ╚═════════════════════════════════════════════════════════╧════════════════════╝ ╔═════════════════════════════════════════════════════════╤════════════════════╗ ║ │ ║ ║ COST ACCOUNTING (Costs in EUR/unit) │ ║ ╠═════════════════════════════════════════════════════════╪════════════════════╣ ║ Material │ 540 ║ ║ + Factory material │ 50 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = Direct material │ 590 ║ ║ + Indirect material │ 33 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = Material costs │ 623 ║ ║ Production direct costs (1) │ 900 ║ ║ + Production overheads (cost c. prod.) │ 510 ║ ║ = Production costs │ 1410 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = COST OF GOODS MANUFACTURED CGM │ 2033 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ + R & D Direct costs (ecol.+ val.anal.) │ 88 ║ ║ + Overheads (cost c. R & D) │ 56 ║ ║ + Sales/Distribution Direct costs (advert. + transp.)│ 177 ║ ║ + Overheads (cost c.sales) │ 211 ║ ║ + Administration Direct costs (2) │ 114 ║ ║ + Overheads (cost c.admin.) │ 120 ║ ╟─────────────────────────────────────────────────────────┼────────────────────╢ ║ = COST OF PRODUCTION │ 2798 ║ ╚═════════════════════════════════════════════════════════╧════════════════════╝ (1) wages/salaries + add.staff costs + pension reserves + rework (2) wages/salaries adm. - fixed costs admin. + add.staff c. + pension reserves

Note: Unit-of-output costing works out step by step (job order costing) the costs

incurred by Copy I. The finished products of Copy I enter the finished goods inventory at the

value of the costs of goods manufactured (CGM). The cost of production show the total costs incurred for the cost unit Copy I. Direct costs: Costs allocated directly to the product. Overheads: Costs which were initially allocated to a cost center. (see

previous report) The costs in Euro/unit refer to the units which were manufactured in the

period (period 0 : 40000 units).


4.2.6 Profit and Loss Statement and Cash flow ╔══════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠══════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 7 PROFIT and LOSS STATEMENT and CASH FLOW ║ ║ ║ ╚══════════════════════════════════════════════════════════════════════════════╝ ╔═════════════════════════════╤═════════╤════════════════════════════╤═════════╗ ║ Total Cost Accounting │ mEUR │ Cost of Sales Accounting │ mEUR ║ ╠═════════════════════════════╪═════════╪════════════════════════════╪═════════╣ ║ │ │ │ ║ ║ SALES REVENUE │ 129,00 │ SALES REVENUE │ 129,00 ║ ╟─────────────────────────────┼─────────┼────────────────────────────┼─────────╢ ║ ± Increase/Decrease in │ -5,12 │ │ ║ ║ finished goods │ │ │ ║ ║ inventory │ │ - Cost of products sold │ 86,42 ║ ║ - Material expenses │ 23,60 │ │ ║ ║ - Personnel costs │ │ │ ║ ║ - Wages and Salaries │ 37,73 │ │ ║ ║ - Recruit.-/Dism.-costs │ 1,43 │ - Sales costs │ 15,50 ║ ║ - Pension reserves │ 1,89 │ │ ║ ║ - Other personnel costs │ 15,09 │ - R & D costs │ 5,74 ║ ║ - Depreciation │ 7,15 │ │ ║ ║ - Other expenses │ 25,01 │ - Administration costs │ 9,36 ║ ╟─────────────────────────────┼─────────┼────────────────────────────┼─────────╢ ║ = OPERATING RESULT │ 11,97 │ = OPERATING RESULT │ 11,97 ║ ╟─────────────────────────────┴─────────┴────────────────────────────┼─────────╢ ║ + Yield from securities │ 0,00 ║ ║ - Interest and similar expenses │ 3,00 ║ ║ ─────────────────────────────────────────────────────────────┼─────────╢ ║ = RESULT FROM REGULAR BUSINESS OPERATIONS │ 8,97 ║ ╟────────────────────────────────────────────────────────────────────┼─────────╢ ║ Extraordinary income │ 0,00 ║ ║ - Extraordinary expenses │ 0,00 ║ ║ ─────────────────────────────────────────────────────────────┼─────────╢ ║ = EXTRAORDINARY PROFIT/LOSS │ 0,00 ║ ╟────────────────────────────────────────────────────────────────────┼─────────╢ ║ - Taxes from income │ 4,04 ║ ╟────────────────────────────────────────────────────────────────────┼─────────╢ ║ = PROFIT/LOSS FOR YEAR │ 4,93 ║ ╚════════════════════════════════════════════════════════════════════╧═════════╝ ╔════════════════════════════════════════════════════════════════════╤═════════╗ ║ APPROPRIATION OF NET INCOME │ mEUR ║ ╟────────────────────────────────────────────────────────────────────┼─────────╢ ║ Profit/Loss for year │ 4,93 ║ ║ ± Loss carried forward from previous year │ 0,00 ║ ║ - Transfer into revenue reserves │ 2,47 ║ ║ = Balance sheet profit (Dividends) / Balance sheet loss │ 2,47 ║ ║ - Distributable amount (Dividends) │ 2,47 ║ ╟────────────────────────────────────────────────────────────────────┼─────────╢ ║ = Loss carried forward │ 0,00 ║ ╚════════════════════════════════════════════════════════════════════╧═════════╝ ╔════════════════════════════════════════════════════════════════════╤═════════╗ ║ CASH-FLOW │ mEUR ║ ╟────────────────────────────────────────────────────────────────────┼─────────╢ ║ Profit for year │ 4,93 ║ ║ + Depreciation (incl. disinvestment) │ 7,15 ║ ║ + Pension reserves │ 1,89 ║ ╟────────────────────────────────────────────────────────────────────┼─────────╢ ║ = Cash-flow after tax │ 13,97 ║ ╚════════════════════════════════════════════════════════════════════╧═════════╝

Note: Increase/reduction of the finished goods inventory: = Closing inventory 8.04 mEuro - Opening inventory 13.16 mEuro = Inventory change –5.12 mEuro In other words, the finished goods inventory was reduced in value in

the period by 5.12 mEuro. Material expenses = Material for the production of Copy I

= Material (Input materials/parts) + Factory supplies = Cost of direct material

Other expenses = Total costs which appear under "Other costs" in cost type accounting

The Cash-Flow shows a company’s potential to finance new investements without additional capital. It can be derived by adding depreciation expenses plus the rise in pension reserves to the profit after tax.


4.2.7 Financial Report and Balance Sheet ╔═══════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period: 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠═══════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 8 FINANCIAL REPORT AND BALANCE SHEET ║ ║ ║ ╚═══════════════════════════════════════════════════════════════════════════════════════════════╝ ╔════════════════════════════════════════════╤════════════════╤═════════════════════════════════╗ ║ │ CURRENT │ PLANNING FOR THE ║ ║ FINANCIAL REPORT in mEUR │ PERIOD │ NEXT PERIOD ║ ╠════════════════════════════════════════════╪════════════════╪═════════════════════════════════╣ ║ OPENING CASH BALANCE │ 0,84 │ ║ ╟────────────────────────────────────────────┼────────────────┼─────────────────────────────────╢ ║ CASH IN: │ │ ║ ║ Cash in from sales current period │ 103,20 │ ║ ║ + Cash in from sales previous period │ 17,50 │ ║ ║ + Securities │ 0,00 │ ║ ║ + Yield on securities │ 0,00 │ ║ ║ + Extraordinary income/Share capital incr.│ 0,00 │ ║ ║ + Disinvestment of production lines │ 0,00 │ ║ ║ + Medium and long-term loans │ 25,00 │ ░░░ ░░░ ║ ║ + Overdraft loan │ 0,00 │ ║ ║ ──────────────────────────────────────────┼────────────────┼─────────────────────────────────╢ ║ = TOTAL CASH IN │ 145,70 │ ║ ╟────────────────────────────────────────────┼────────────────┼─────────────────────────────────╢ ║ CASH OUT: │ │ ║ ║ Purchase input mat./parts + fact.mat. │ 18,50 │ ║ ║ + Outside production │ 0,00 │ ║ ║ + Personnel costs (- Pension reserves) │ 54,26 │ ║ ║ + Other expenses │ 25,01 │ ║ ║ + Pay back medium-term & overdraft loans │ 40,00 │ ║ ║ + Interest paid on loans │ 3,00 │ ░░░ ░░░ ║ ║ + Purchase of production lines │ 0,00 │ ║ ║ + Purchase of securities │ 0,00 │ ║ ║ + Purchase of environmental plants │ 1,50 │ ║ ║ + Taxes from income │ 4,04 │ ║ ║ + Pay out of dividends (previous period) │ 0,00 │ ║ ║ + Extraordinary expenses │ 0,00 │ ║ ║ ──────────────────────────────────────────┼────────────────┼─────────────────────────────────╢ ║ = TOTAL CASH OUT │ 146,31 │ ║ ╟────────────────────────────────────────────┼────────────────┼─────────────────────────────────╢ ║ CLOSING CASH BALANCE │ 0,23 │ ║ ╚════════════════════════════════════════════╧════════════════╧═════════════════════════════════╝ ╔═══════════════════════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ BALANCE SHEET in mEUR ║ ║ ║ ╠═════════════════════════════╤════════╦════════╦═════════════════════════════╤════════╦════════╣ ║ ASSETS │ Period ║Prev.per║ LIABILITIES │ Period ║Prev.per║ ╟─────────────────────────────┼────────╫────────╫─────────────────────────────┼────────╫────────╢ ║ FIXED ASSETS │ 27,35 ║ 33,00 ║ OWNERS' EQUITY │ 29,93 ║ 25,00 ║ ║ Property, Plant and Equipm.│ ║ ║ Subscribed capital │ 15,00 ║ 15,00 ║ ║ Land and Buildings │ 7,75 ║ 8,00 ║ Capital reserves │ 2,50 ║ 2,50 ║ ║ Machinery and Equipment │ 19,60 ║ 25,00 ║ Revenue reserves │ 7,50 ║ 6,50 ║ ║ │ ║ ║ Loss carried forward │ 0,00 ║ 0,00 ║ ║ │ ║ ║ Profit/Loss for year │ 4,93 ║ 1,00 ║ ║ │ ║ ║ │ ║ ║ ║ CURRENT ASSETS │ 39,47 ║ 42,00 ║ PENSION RESERVES │ 11,89 ║ 10,00 ║ ║ Inventories │ ║ ║ │ ║ ║ ║ Material │ 5,40 ║ 10,50 ║ │ ║ ║ ║ Finished goods │ 8,04 ║ 13,16 ║ LIABILITIES │ 25,00 ║ 40,00 ║ ║ Accounts receivable │ 25,80 ║ 17,50 ║ Remaining life over 5 yrs.│ 0,00 ║ 0,00 ║ ║ Securities │ 0,00 ║ 0,00 ║ Remaining life under 1 yr.│ 25,00 ║ 40,00 ║ ║ Cash │ 0,23 ║ 0,84 ║ Overdraft loan │ 0,00 ║ 0,00 ║ ╟─────────────────────────────┼────────╫────────╫─────────────────────────────┼────────╫────────╢ ║ BALANCE SHEET TOTAL │ 66,82 ║ 75,00 ║ BALANCE SHEET TOTAL │ 66,82 ║ 75,00 ║ ╚═════════════════════════════╧════════╩════════╩═════════════════════════════╧════════╩════════╝

Notes on the financial report: Deposits from sales Current period : Sales * Payment receipts (%) in the period Deposits from sales Previous period : Value of the balance sheet item "Accounts receivable" from

deliveries and services of previous period Other expenses : correspond to the item "Other expenses" in the P/L Statement Calculation of the borrowing requirements for the period: Opening cash balance + Amount of all depostis

- Amount of disbursements - Minimum cash balance


4.2.8 Overall company results ╔══════════════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠══════════════════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 9 OVERALL COMPANY RESULTS ║ ║ ║ ╚══════════════════════════════════════════════════════════════════════════════════════════════════════════╝ ╔══════════════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ OVERALL COMPANY RESULTS ║ ║ ║ ╠══════════════════════════════════════════════════════╦═══════════════════════════════════════════════════╣ ║ ┼ x=Total sales(mEUR) +=Profit for year(mEUR)┼ ║ ┼ Share price (EUR/share) ┼║ ║240┼ ┼ ║ 350┼ ┼║ ║230┼ ┼ 20 ║ ┼ ┼║ ║220┼ ┼ ║ 300┼ ┼║ ║210┼ ┼ 15 ║ ┼ ┼║ ║200┼ ┼ ║ 250┼ ┼║ ║190┼ ┼ 10 ║ ┼ ┼║ ║180┼ ┼ ║ 200┼ ┼║ ║170┼ + ┼ 5 ║ ┼ ┼║ ║160┼ ┼ ║ 150┼ ┼║ ║150┼ ┼ 0 ║ ┼ ┼║ ║140┼ ┼ ║ 100┼ + ┼║ ║130┼ x ┼ -5 ║ ┼ ┼║ ║120┼ ┼ ║ 50┼ ┼║ ║110┼ ┼-10 ║ ┼ ┼║ ║100┼ Periods ┼ ║ 0┼ Periods ┼║ ║ ┼──┼────┼────┼────┼────┼────┼────┼────┼────┼──┼ ║ ┼──┼────┼────┼────┼────┼────┼────┼────┼────┼──┼║ ║ │ 0 1 2 3 4 5 6 7 8 ║ │ 0 1 2 3 4 5 6 7 8 ║ ╠══════════════════════════════════════════════════════╬═══════════════════════════════════════════════════╣ ║ ┼ Return on sales (%) ┼ ║ ┼ Return on equity (%) ┼║ ║ 10┼ ┼ ║ 50┼ ┼║ ║ 9┼ ┼ ║ 45┼ ┼║ ║ 8┼ ┼ ║ 40┼ ┼║ ║ 7┼ ┼ ║ 35┼ ┼║ ║ 6┼ ┼ ║ 30┼ ┼║ ║ 5┼ ┼ ║ 25┼ ┼║ ║ 4┼ + ┼ ║ 20┼ + ┼║ ║ 3┼ ┼ ║ 15┼ ┼║ ║ 2┼ ┼ ║ 10┼ ┼║ ║ 1┼ ┼ ║ 5┼ ┼║ ║ 0┼─────────────────────────────────────────────┼ ║ 0┼─────────────────────────────────────────────┼║ ║ -1┼ ┼ ║ -5┼ ┼║ ║ -2┼ ┼ ║ -10┼ ┼║ ║ -3┼ ┼ ║ -15┼ ┼║ ║ -4┼ ┼ ║ -20┼ ┼║ ║-10┼ Periods ┼ ║ -50┼ Periods ┼║ ║ ┼──┼────┼────┼────┼────┼────┼────┼────┼────┼──┼ ║ ┼──┼────┼────┼────┼────┼────┼────┼────┼────┼──┼║ ║ │ 0 1 2 3 4 5 6 7 8 ║ │ 0 1 2 3 4 5 6 7 8 ║ ╚══════════════════════════════════════════════════════╩═══════════════════════════════════════════════════╝ ╔═════════════════════════╤═══════╤═══════╤═══════╤═══════╤═══════╤═══════╤═══════╤═══════╤═══════╤════════╗ ║ RATIOS │ Per.0 │ Per. │ Per. │ Per. │ Per. │ Per. │ Per. │ Per. │ Per. │Average ║ ╟─────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼────────╢ ║ Total sales mEUR │ 129,0 │ │ │ │ │ │ │ │ │ 129,0 ║ ║ Operating result mEUR │ 12,0 │ │ │ │ │ │ │ │ │ 12,0 ║ ║ Profit for year mEUR │ 4,9 │ │ │ │ │ │ │ │ │ 4,9 ║ ║ Owners' equity mEUR │ 29,9 │ │ │ │ │ │ │ │ │ 29,9 ║ ╟─────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼────────╢ ║ Return on sales % │ 3,8 │ │ │ │ │ │ │ │ │ 3,8 ║ ║ Return on equity % │ 19,7 │ │ │ │ │ │ │ │ │ 19,7 ║ ╟─────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼────────╢ ║ Payout dividends mEUR │ 0,0 │ │ │ │ │ │ │ │ │ 0,0 ║ ║ Cumul. dividends mEUR │ 0,0 │ │ │ │ │ │ │ │ │ ║ ╟─────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼────────╢ ║ Planning quality index │ 2,9 │ │ │ │ │ │ │ │ │ 2,9 ║ ╟─────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼────────╢ ║ Share price EUR/share │ 100,0 │ │ │ │ │ │ │ │ │ 100,0 ║ ║ Value of company mEUR │ 50,0 │ │ │ │ │ │ │ │ │ 50,0 ║ ╟─────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼────────╢ ║ Corporate image index │ 100,0 │ │ │ │ │ │ │ │ │ 100,0 ║ ╟─────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼────────╢ ║ Sharehold.earnings mEUR │ 0,0 │ │ │ │ │ │ │ │ │ ║ ║ Sharehold.earn.since 0 │ 0,0 │ │ │ │ │ │ │ │ │ ║ ╚═════════════════════════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧════════╝


Note: Planning quality index Value from the report "Out-of-line situation", see next page. Value of company Share price (Euro/share) * 500.000 shares Return on sales Profit after Tax,Sales revenue Return on equity Profit after tax actual period,Equity end of prev. period


4.2.9 Out-of-line situations ╔══════════════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period: 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠══════════════════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 10 OUT-OF-LINE SITUATIONS ║ ║ ║ ╚══════════════════════════════════════════════════════════════════════════════════════════════════════════╝ ╔══════════════════════════╤═══════════════════════════════════════════════════════════════════════╤═══════╗ ║ │ PERIODS │ ║ ║ ├───────┬───────┬───────┬───────┬───────┬───────┬───────┬───────┬───────┼───────╢ ║ PLANNING VALUES │ 0 │ │ │ │ │ │ │ │ │ Aver. ║ ╠══════════════════════════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╤═══════╣ ║ │ │ │ │ │ │ │ │ │ │ ║ ║ SALES (mEUR) Plan.val.│ 130,0 │ │ │ │ │ │ │ │ │ 130,0 ║ ║ PRODUCT 1 Actual │ 129,0 │ │ │ │ │ │ │ │ │ 129,0 ║ ║ MARKET 1 Abs. var.│ -1,0 │ │ │ │ │ │ │ │ │ -1,0 ║ ║ Var.in % │ -0,8 │ │ │ │ │ │ │ │ │ -0,8 ║ ║ ────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────╢ ║ PLANNING QUALITY │ 1,0 │ │ │ │ │ │ │ │ │ 1,0 ║ ╠══════════════════════════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╤═══════╣ ║ │ │ │ │ │ │ │ │ │ │ ║ ║ RETURN ON Plan.val.│ 20,0 │ │ │ │ │ │ │ │ │ 20,0 ║ ║ EQUITY (%) Actual │ 19,7 │ │ │ │ │ │ │ │ │ 19,7 ║ ║ Abs.var. │ -0,3 │ │ │ │ │ │ │ │ │ -0,3 ║ ║ Var.in % │ -1,3 │ │ │ │ │ │ │ │ │ -1,3 ║ ║ ────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────╢ ║ PLANNING QUALITY │ 1,0 │ │ │ │ │ │ │ │ │ 1,0 ║ ╠══════════════════════════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╤═══════╣ ║ │ │ │ │ │ │ │ │ │ │ ║ ║ CASH FLOW Plan.val.│ 14,0 │ │ │ │ │ │ │ │ │ 14,0 ║ ║ (mEUR) Actual │ 14,0 │ │ │ │ │ │ │ │ │ 14,0 ║ ║ Abs. var.│ -0,0 │ │ │ │ │ │ │ │ │ -0,0 ║ ║ Var.in % │ -0,2 │ │ │ │ │ │ │ │ │ -0,2 ║ ║ ────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────╢ ║ PLANNING QUALITY │ 1,0 │ │ │ │ │ │ │ │ │ 1,0 ║ ╠══════════════════════════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╣ ║ │ │ │ │ │ │ │ │ │ │ ║ ║ Profit for year (mEUR)│ 4,9 │ │ │ │ │ │ │ │ │ 4,9 ║ ║ Cum. profit for yr.(mEUR)│ 4,9 │ │ │ │ │ │ │ │ │ 4,9 ║ ║ Planning quality of per. │ 2,9 │ │ │ │ │ │ │ │ │ 2,9 ║ ║ Cum. planning quality │ 2,9 │ │ │ │ │ │ │ │ │ 2,9 ║ ╟──────────────────────────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────╢ ║ │ │ │ │ │ │ │ │ │ │ ║ ║ Earn.cap.value (mEUR)│ 6,4 │ │ │ │ │ │ │ │ │ 6,4 ║ ║ Cum.earn.cap.value (mEUR)│ 6,4 │ │ │ │ │ │ │ │ │ 6,4 ║ ╚══════════════════════════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╝

Planning quality : The planning quality arises according to the extent of the planning from the variance between the plan and actual performance.

Ranges of planning quality: Best value = +1.0 at an absolute variance of approx. 0.0. Worst value = -1.0 at a large absolute variance.

Planning quality of the period

: Number of individual planning qualities for the period

Cum. planning quality : Cumulative planning quality of previous period + Planning quality of period

Earning value of period (mEuro)

: The earning value of the period is composed of :

profit for the period (mEuro) + (Planning quality of the period * Value of a planning point in mEuro).

The value of a planning point (planning quality) is determined by the game supervisor.

Cum. earning value (mEuro)

: Cumulative earning value of the previous periods + Earning value of the period


4.2.10 Market research report ╔═════════════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠═════════════════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 11 MARKET RESEARCH REPORT I ║ ║ ║ ╚═════════════════════════════════════════════════════════════════════════════════════════════════════════╝ ╔═════════════════════════╤═══════╤═══════╤═══════════════╤═══════════════╤═══════════════╤═══════════════╗ ║ │ │ │ ADVERTISING │ SALES │ REVENUE │PRODUCT INDICES║ ║ MARE I │ COM- │ PRICE ├───────┬───────┼───────┬───────┼───────┬───────┼───────┬───────╢ ║ │ PANY │EUR │ mEUR │ % │ Units │ % │ mEUR │ % │ Techn.│Ecolog.║ ╠═════════════════════════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╪═══════╣ ║ │ │ │ │ │ │ │ │ │ │ ║ ║ PRODUCT 1 MARKET 1 │ 1 │ 3000 │ 6,00 │ 20,0 │ 43000 │ 20,0 │ 129,0 │ 20,0 │ 100,0 │ 100,0 ║ ║ │ 2 │ 3000 │ 6,00 │ 20,0 │ 43000 │ 20,0 │ 129,0 │ 20,0 │ 100,0 │ 100,0 ║ ║ │ 3 │ 3000 │ 6,00 │ 20,0 │ 43000 │ 20,0 │ 129,0 │ 20,0 │ 100,0 │ 100,0 ║ ║ │ 4 │ 3000 │ 6,00 │ 20,0 │ 43000 │ 20,0 │ 129,0 │ 20,0 │ 100,0 │ 100,0 ║ ║ │ 5 │ 3000 │ 6,00 │ 20,0 │ 43000 │ 20,0 │ 129,0 │ 20,0 │ 100,0 │ 100,0 ║ ║ ├───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────┼───────╢ ║ │Av./Tot│ 3000 │ 30,00 │ 100,0 │215000 │ 100,0 │ 645,0 │ 100,0 │ 100,0 │ 100,0 ║ ╚═════════════════════════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╝ ╔═════════════════════════╤═══════╤═══════╤═══════╤═══════════════════════╤═══════════════╤═══════════════╗ ║ OTHER DATA │ COM- │ PROD. │ PROD.1│ PRODUCTION LINES │EXPENSES R & D │ SALES/DISTR. ║ ║ │ PANY │ STAFF │ O/R/N │ Type A│ Type B│ Type C│ (mEUR) │ (No.of pers.) ║ ║ ├───────┼───────┼───────┼───────┼───── ─┼───────┼───────────────┼───────────────╢ ║ │ 1 │ 868 │ O │ 4 │ 0 │ 0 │ 5,0 │ 100 ║ ║ │ 2 │ 868 │ O │ 4 │ 0 │ 0 │ 5,0 │ 100 ║ ║ │ 3 │ 868 │ O │ 4 │ 0 │ 0 │ 5,0 │ 100 ║ ║ │ 4 │ 868 │ O │ 4 │ 0 │ 0 │ 5,0 │ 100 ║ ║ │ 5 │ 868 │ O │ 4 │ 0 │ 0 │ 5,0 │ 100 ║ ╚═════════════════════════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════╧═══════════════╧═══════════════╝

Notes: Product 1 Market 1:

The average price is a weighted average price = Revenue/Sales Expenditure R & D mEUR = Total R & D costs for - Technology - Ecology - Value analysis Other data: O = Old product 1 R = Relaunch Possible product strategies which may be imple- N = New product 1 mented by the game supervisor during game.


4.2.11 Business reports from the industry ╔══════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠══════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 13 BUSINESS REPORTS FROM THE INDUSTRY ║ ║ ║ ╚══════════════════════════════════════════════════════════════════════════════╝ ╔══════════════════════════════════════════════════════════════════════════════╗ ║ PROFIT AND LOSS STATEMENT ║ ╟─────────────────────────────────┬────────┬────────┬────────┬────────┬────────╢ ║ VALUES in mEUR │Comp. 1 │Comp. 2 │Comp. 3 │Comp. 4 │Comp. 5 ║ ╠═════════════════════════════════╪════════╪════════╪════════╪════════╪════════╣ ║ SALES REVENUE │ 129,00 │ 129,00 │ 129,00 │ 129,00 │ 129,00 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ - Cost of products sold │ 86,42 │ 86,42 │ 86,42 │ 86,42 │ 86,42 ║ ║ - Sales costs │ 15,50 │ 15,50 │ 15,50 │ 15,50 │ 15,50 ║ ║ - R & D costs │ 5,74 │ 5,74 │ 5,74 │ 5,74 │ 5,74 ║ ║ - Administration costs │ 9,36 │ 9,36 │ 9,36 │ 9,36 │ 9,36 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ = OPERATING RESULT │ 11,97 │ 11,97 │ 11,97 │ 11,97 │ 11,97 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ Result reg.business operations│ 8,97 │ 8,97 │ 8,97 │ 8,97 │ 8,97 ║ ║ Extraordinary result │ 0,00 │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ - Taxes from income │ 4,04 │ 4,04 │ 4,04 │ 4,04 │ 4,04 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ = PROFIT/LOSS FOR YEAR │ 4,93 │ 4,93 │ 4,93 │ 4,93 │ 4,93 ║ ╚═════════════════════════════════╧════════╧════════╧════════╧════════╧════════╝ ╔══════════════════════════════════════════════════════════════════════════════╗ ║ BALANCE SHEET ║ ╠═════════════════════════════════╤════════╤════════╤════════╤════════╤════════╣ ║ ASSETS in mEUR │Comp. 1 │Comp. 2 │Comp. 3 │Comp. 4 │Comp. 5 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ FIXED ASSETS │ 27,35 │ 27,35 │ 27,35 │ 27,35 │ 27,35 ║ ║ Land and Buildings │ 7,75 │ 7,75 │ 7,75 │ 7,75 │ 7,75 ║ ║ Machinery and Equipment │ 19,60 │ 19,60 │ 19,60 │ 19,60 │ 19,60 ║ ║ CURRENT ASSETS │ 39,47 │ 39,47 │ 39,47 │ 39,47 │ 39,47 ║ ║ Material │ 5,40 │ 5,40 │ 5,40 │ 5,40 │ 5,40 ║ ║ Finished goods │ 8,04 │ 8,04 │ 8,04 │ 8,04 │ 8,04 ║ ║ Accounts receivable │ 25,80 │ 25,80 │ 25,80 │ 25,80 │ 25,80 ║ ║ Securities │ 0,00 │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ Cash │ 0,23 │ 0,23 │ 0,23 │ 0,23 │ 0,23 ║ ║ ───────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ BALANCE SHEET TOTAL │ 66,82 │ 66,82 │ 66,82 │ 66,82 │ 66,82 ║ ╠═════════════════════════════════╪════════╪════════╪════════╪════════╪════════╣ ║ LIABILITIES in mEUR │Comp. 1 │Comp. 2 │Comp. 3 │Comp. 4 │Comp. 5 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ OWNERS' EQUITY │ 29,93 │ 29,93 │ 29,93 │ 29,93 │ 29,93 ║ ║ Subscribed capital │ 15,00 │ 15,00 │ 15,00 │ 15,00 │ 15,00 ║ ║ Capital reserves │ 2,50 │ 2,50 │ 2,50 │ 2,50 │ 2,50 ║ ║ Revenue reserves │ 7,50 │ 7,50 │ 7,50 │ 7,50 │ 7,50 ║ ║ Loss carried forward │ 0,00 │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ Profit/Loss for year │ 4,93 │ 4,93 │ 4,93 │ 4,93 │ 4,93 ║ ║ PENSION RESERVES │ 11,89 │ 11,89 │ 11,89 │ 11,89 │ 11,89 ║ ║ DUE TO BANKS │ 25,00 │ 25,00 │ 25,00 │ 25,00 │ 25,00 ║ ║ Remaining life over 5 years │ 0,00 │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ Remaining life under 1 year │ 25,00 │ 25,00 │ 25,00 │ 25,00 │ 25,00 ║ ║ Overdraft loan │ 0,00 │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ ───────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ BALANCE SHEET TOTAL │ 66,82 │ 66,82 │ 66,82 │ 66,82 │ 66,82 ║ ╚═════════════════════════════════╧════════╧════════╧════════╧════════╧════════╝ ╔═════════════════════════════════╤════════╤════════╤════════╤════════╤════════╗ ║ COMPANY RATIOS │Comp. 1 │Comp. 2 │Comp. 3 │Comp. 4 │Comp. 5 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ Return on sales (%) │ 3,8 │ 3,8 │ 3,8 │ 3,8 │ 3,8 ║ ║ Return on equity (%) │ 19,7 │ 19,7 │ 19,7 │ 19,7 │ 19,7 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ Payout dividends (mEUR) │ 0,0 │ 0,0 │ 0,0 │ 0,0 │ 0,0 ║ ║ Share price (EUR/share) │ 100,0 │ 100,0 │ 100,0 │ 100,0 │ 100,0 ║ ║ Value of company (mEUR) │ 50,0 │ 50,0 │ 50,0 │ 50,0 │ 50,0 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ Corporate image (Index) │ 100,0 │ 100,0 │ 100,0 │ 100,0 │ 100,0 ║ ╟─────────────────────────────────┼────────┼────────┼────────┼────────┼────────╢ ║ Shareholder Earnings (mEUR) │ 0,0 │ 0,0 │ 0,0 │ 0,0 │ 0,0 ║ ║ Shareholder Earnings (% P0) │ 0,0 │ 0,0 │ 0,0 │ 0,0 │ 0,0 ║ ╚═════════════════════════════════╧════════╧════════╧════════╧════════╧════════╝

Note : The most relevant data on the company for competitive analysis.


4.2.12 Profit and lost statement and balance sheet with US-GAAP norm:

Important note: starting from version 10.0 the most important reports of the external account system can be output in accordance with US-GAAP with TOPSIM general management. You can find these reports as appendix. Whether in your seminar is based HGB or US-GAAP, you need to ask your seminar instructor. ╔═════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period : 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠═════════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 7 PROFIT AND LOSS STATEMENT, BALANCE SHEET (US-GAAP) ║ ║ ║ ╚═════════════════════════════════════════════════════════════════════════════════════════════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ PROFIT and LOSS STATEMENT ║ ║ ║ ╠═════════════════════════════════════════════════════════╤═════════╤═════════╤═════════╤═════════╣ ║ Total Cost Accounting mEUR │ Period │Prev.per.│ Cha.(%) │ % o.sal.║ ╠═════════════════════════════════════════════════════════╪═════════╪═════════╪═════════╪═════════╣ ║ SALES REVENUE │ 129,00 │ 0,00 │ 0,00 │ 100,00 ║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ - Cost of products sold │ 86,42 │ 0,00 │ 0,00 │ 66,99 ║ ║ - Sales costs │ 15,50 │ 0,00 │ 0,00 │ 12,02 ║ ║ - R & D costs │ 5,74 │ 0,00 │ 0,00 │ 4,45 ║ ║ - Administration costs │ 9,36 │ 0,00 │ 0,00 │ 7,26 ║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ = OPERATING RESULT │ 11,97 │ 0,00 │ 0,00 │ 9,28 ║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ + Yield from securities │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ - Interest and similar expenses │ 3,00 │ 0,00 │ 0,00 │ 2,33 ║ ║ ──────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ = RESULT FROM REGULAR BUSINESS OPERATIONS │ 8,97 │ 0,00 │ 0,00 │ 6,95 ║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ Extraordinary income │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ - Extraordinary expenses │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ ──────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ = EXTRAORDINARY PROFIT/LOSS │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ - Taxes from income │ 4,04 │ 0,00 │ 0,00 │ 3,13 ║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ = PROFIT/LOSS FOR YEAR │ 4,93 │ 0,00 │ 0,00 │ 3,82 ║ ╚═════════════════════════════════════════════════════════╧═════════╧═════════╧═════════╧═════════╝ ╔═════════════════════════════════════════════════════════╤═════════╤═════════╤═════════╤═════════╗ ║ APPROPRIATION OF NET INCOME mEUR │ Period │Prev.per.│ Cha.(%) │ % o.sal.║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ Profit/Loss for year │ 4,93 │ 0,00 │ 0,00 │ 3,82 ║ ║ ± Loss carried forward from previous year │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ║ - Transfer into revenue reserves │ 2,47 │ 0,00 │ 0,00 │ 1,91 ║ ║ = Balance sheet profit (Dividends) / Bal.sh.loss │ 2,47 │ 0,00 │ 0,00 │ 1,91 ║ ║ - Distributable amount (Dividends) │ 2,47 │ 0,00 │ 0,00 │ 1,91 ║ ╟─────────────────────────────────────────────────────────┼─────────┼─────────┼─────────┼─────────╢ ║ = Loss carried forward │ 0,00 │ 0,00 │ 0,00 │ 0,00 ║ ╚═════════════════════════════════════════════════════════╧═════════╧═════════╧═════════╧═════════╝ ╔═════════════════════════════════════════════════════════════════════════════════════════════════╗ ║ ║ ║ BALANCE SHEET in mEUR ║ ║ ║ ╠══════════════════════════════╤════════╦════════╦══════════════════════════════╤════════╦════════╣ ║ ASSETS │ Period ║Prev.per║ LIABILITIES │ Period ║Prev.per║ ╟──────────────────────────────┼────────╫────────╫──────────────────────────────┼────────╫────────╢ ║ FIXED ASSETS │ 27,35 ║ 33,00 ║ OWNERS' EQUITY │ 29,93 ║ 25,00 ║ ║ Property, Plant and Equipm. │ ║ ║ Subscribed capital │ 15,00 ║ 15,00 ║ ║ Land and Buildings │ 7,75 ║ 8,00 ║ Capital reserves │ 2,50 ║ 2,50 ║ ║ Machinery and Equipment │ 19,60 ║ 25,00 ║ Revenue reserves │ 7,50 ║ 6,50 ║ ║ │ ║ ║ Loss carried forward │ 0,00 ║ 0,00 ║ ║ │ ║ ║ Profit/Loss for year │ 4,93 ║ 1,00 ║ ║ │ ║ ║ │ ║ ║ ║ CURRENT ASSETS │ 39,47 ║ 42,00 ║ PENSION RESERVES │ 11,89 ║ 10,00 ║ ║ Inventories │ ║ ║ │ ║ ║ ║ Material │ 5,40 ║ 10,50 ║ │ ║ ║ ║ Finished goods │ 8,04 ║ 13,16 ║ LIABILITIES │ 25,00 ║ 40,00 ║ ║ Accounts receivable │ 25,80 ║ 17,50 ║ Remaining life over 5 yrs. │ 0,00 ║ 0,00 ║ ║ Securities │ 0,00 ║ 0,00 ║ Remaining life under 1 yr. │ 25,00 ║ 40,00 ║ ║ Cash │ 0,23 ║ 0,84 ║ Overdraft loan │ 0,00 ║ 0,00 ║ ╟──────────────────────────────┼────────╫────────╫──────────────────────────────┼────────╫────────╢ ║ BALANCE SHEET TOTAL │ 66,82 ║ 75,00 ║ BALANCE SHEET TOTAL │ 66,82 ║ 75,00 ║ ╚══════════════════════════════╧════════╩════════╩══════════════════════════════╧════════╩════════╝


4.2.13 Financial report and Cash Flow (US-GAAP) ╔═══════════════════════════════════════════════════════════════════════════════════════════════╗ ║ UNICON GmbH - D-88709 Meersburg Copyright (c) 2000 by Unicon ║ ║ ║ ║ MANAGEMENT GAME Company 1 Period: 0 ║ ║ T O P S I M - General Management II Demo Date 1. 8.2000 ║ ╠═══════════════════════════════════════════════════════════════════════════════════════════════╣ ║ ║ ║ No. 8 FINANCIAL REPORT AND CASH FLOW (US-GAAP) ║ ║ ║ ╚═══════════════════════════════════════════════════════════════════════════════════════════════╝ ╔═════════════════════════════════════════════════════╤════════════════╤════════════════════════╗ ║ │ CURRENT │ PLANNING FOR THE ║ ║ FINANCIAL REPORT in mEUR │ PERIOD │ NEXT PERIOD ║ ╠═════════════════════════════════════════════════════╪════════════════╪════════════════════════╣ ║ OPENING CASH BALANCE │ 0,84 │ ║ ╟─────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ CASH IN: │ │ ║ ║ Cash in from sales current period │ 103,20 │ ║ ║ + Cash in from sales previous period │ 17,50 │ ║ ║ + Securities │ 0,00 │ ║ ║ + Yield on securities │ 0,00 │ ║ ║ + Extraordinary income/Share capital incr. │ 0,00 │ ║ ║ + Disinvestment of production lines │ 0,00 │ ║ ║ + Medium and long-term loans │ 25,00 │ ░░░ ░░░ ║ ║ + Overdraft loan │ 0,00 │ ║ ║ ───────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ = TOTAL CASH IN │ 145,70 │ ║ ╟─────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ CASH OUT: │ │ ║ ║ Purchase input mat./parts + fact.mat. │ 18,50 │ ║ ║ + Outside production │ 0,00 │ ║ ║ + Personnel costs (- Pension reserves) │ 54,26 │ ║ ║ + Other expenses │ 25,01 │ ║ ║ + Pay back medium-term & overdraft loans │ 40,00 │ ║ ║ + Interest paid on loans │ 3,00 │ ░░░ ░░░ ║ ║ + Purchase of production lines │ 0,00 │ ║ ║ + Purchase of securities │ 0,00 │ ║ ║ + Purchase of environmental plants │ 1,50 │ ║ ║ + Taxes from income │ 4,04 │ ║ ║ + Pay out of dividends (previous period) │ 0,00 │ ║ ║ + Extraordinary expenses │ 0,00 │ ║ ║ ───────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ = TOTAL CASH OUT │ 146,31 │ ║ ╟─────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ CLOSING CASH BALANCE │ 0,23 │ ║ ╚═════════════════════════════════════════════════════╧════════════════╧════════════════════════╝ ╔═════════════════════════════════════════════════════╤════════════════╤════════════════════════╗ ║ CASH FLOW STATEMENT (US-GAAP) │ in mEUR │ ║ ╠═════════════════════════════════════════════════════╪════════════════╪════════════════════════╣ ║ Net earnings / net loss for year │ 4,93 │ ║ ║ Depreciation of fixed assets │ 7,15 │ ║ ║ Increase of pension fund │ 1,89 │ ║ ║ Changes in current assets │ │ ║ ║ Increase (-) / Decrease (+) of raw material │ 5,10 │ ║ ║ Increase (-) / Decrease (+) of finished products│ 5,12 │ ║ ║ Increase (-) / Decrease (+) of receivables │ -8,30 │ ║ ║ ────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ A. NET CASH PROVIDED/USED BY OPERATING ACTIVITIES │ 15,89 │ 15,89 ║ ╟─────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ Investments in fixed assets │ -1,50 │ ║ ║ ────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ B. NET CASH USED IN INVESTING ACTIVITIES │ -1,50 │ -1,50 ║ ╟─────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ Increase of subscribed capital │ 0,00 │ ║ ║ Prior years dividend paid │ 0,00 │ ║ ║ Increase (-) / Decrease (+) of securities │ 0,00 │ ║ ║ Increase (+) / Decrease (-) of bank loans │ -15,00 │ ║ ║ ────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ C. NET CASH PROVIDED/USED BY FINANCING ACTIVITIES │ -15,00 │ -15,00 ║ ║ ────────────────────────────────────────────────────┼────────────────┼────────────────────────╢ ║ D. NET INCREASE (+) / DECREASE (-) OF CASH (A+B+C) │ -0,61 │ -0,61 ║ ╚═════════════════════════════════════════════════════╧════════════════╧════════════════════════╝

Notes to the financial statement: Cash in from sales current period : Sales * Payment receipts (%) in the period Cash in from sales previous period : see Balance Sheet "Accounts receivable – Prev.

Per.“ Calculation of the credit needs for the period : Closing cash balance + Total all cash in

- Total all cash out – Minimum closing cash


Index

A absenteeism 21, 25 absenteeism 23 Accounting 28 Accounts receivable 26 additional premium by overtime 24 additional staff costs 21, 22, 23 Administration costs 28 advertising 11 available capacity 18, 20

B bulk buyers 14

C cash balance 26 communications policy 11, 12 corporate identity 12 corporate Identity 13 corporate image 12, 21 cost accounting 36 cost of production 15 costs of goods manufactured 36 customer paying patterns 26

D deficiency 17 degree of availability 20 deposits 26 depreciation 28 depreciation of production lines 18, 33 Direct costs 36 disinvestment 19 dismissals 22 distribution 12 distribution costs 13 dividend payments 27 domestic market 12

E ecology index 10, 16 environmental damage 12, 21 Environmental damage 21

environmental damage indicator 21 environment-friendliness 10, 12 Equity 27 experience 25

F factory materials 21 finished goods inventory 37 Fixed costs administration 22

I incapacity to supply 14 input material/parts 17 in-service training 24 insufficient input material 17 interest rates 26 inventory 15 inventory input materials/parts 17 investment 19

L learning curve 25 loans 26 long-term loans 26 loss carried forward 27

M maintenance 19 maintenance factor 20 market research report 15 marketing mix 13 medium-term loans 26

O overdraft loans 26 Overheads 36 overtime

extra costs 24 overtime 20, 24

P pension reserves 23 personnel 22 Planning quality 41 pricing policy 11

proceeds from scrap 19 process optimisation 24 product inventory 10 product policy 10 production 18 production capacity 18, 24 production line 18, 20 productivity 24, 25 productivity index 25 products inventory 15 profit 27 purchasing 17

R rate of staff turnover 23 rationalisation 20 rationalisation factor 20 recruitment 22 Redeployment 22 requests for bids 14 rework 21 rework 16, 21

S sales 10 sales personnel 12 sales-unrelated share of personnel costs 22 securities 26 share price 12, 27 shareholder earnings 27 staff qualification 24 staff turnover 22 stock exchange price 12, 27 storage 15 storage costs 15, 17

T taxation 27 technology index 10, 16, 21 transport costs 13

V value analysis 16, 17 value analysis index 16, 21 volume scale 17


TOPSIM - General Management II Checklist for the first periods of the seminar

1. Which type of company are we working for?

Internal structures (operating units, cost centers) Market (customers and competition) Production costs, Product results

2. What do we want to have achieved by the end of the game? Which goals:

Market shares, Sales, Turnover, Product attributes, Profit for the year, Return on equity ...

3. How do we wish to achieve our goals? Which strategies:

Conservative? Expansive? High risk? Which marketing mix do we use over the various periods? Can we achieve our aims with the intended strategies?

4. How will we organise ourselves within our team?

Who will take responsibility for what? Do we work in a functional or a collegial system? Job rotation?

5. How do we organise the work within our team (methods and procedures)?

Time management for decision making Content of analysis and of decision stages

6. How can we identify and follow significant influences and events (early warning system)?

Development of an informative information system (visualisation) Development of a decision-oriented planning system


TOPSIM - General Management II Stockholders´ Meeting

1. What was planned? - Goals and Strategies

2. How did things arise? (Decisions and Adaptions) - Sales - Marketing Mix - Net income - Cash on hand/

Overdraft facilities

3. Where do we stand? - Inventory total in the final period

4. How are we to continue? - Prospects for the next 5 periods

5. What have we learned? - What would we possibly do differently?

6. What was our groupwork like? - Working methods and group dynamics

Time for the group presentation: max. 25 minutes


Report on the Findings by the Management Consultants: How members of the COPYFIX Inc. Board of Supervisors view their personal strategies and activities and those of their colleagues.

Who How they view them

Managers Manufacturing Sales Human Resources Purchasing R & D Finance and Accounting

Manufacturing

• Play big !!! • We earn the money !

• Production is too expersive.

• Chooses the wrong planning capacity.

• Always slams our stocks full.

• Ensures that there are sufficient salaries for marketing personnel and minimizes well.

• Minimizes fluctuation

• What does he want from me?

• Produce the improvement too late.

• Brings in their own ideas, instead of what the customers require.

• Are too reluctant.

• Lowers the marketing output and marketing personnel.

• Have no notion of the market.

Sales

• Can never settle on definite production figures

• I am the one suffering from inaccurate sales forecasts

• Nothing runs without me. • Favorable costs are only

possible with the most modern systems and continuous extention of utilization.

• Has to be more flexible in his adjustment of the personnel capacity.

• Debits surplus personnel everywhere.

• Just-in-time inventory produces a reduction in costs

• Because of unnecessary product improvements rework and retooling rise.

• Bean counters ! • Prevents opening new

manufacturing plants, and calculates the wrong enonomic values.

Human Resources

• Demands low fluctuation on one hand yet is asking for rapid adjustment in the level of sales personell on the other hand.

• Because of their chaotic personnel application I am constantly bothered by the labor unions.

• Long-term personnel planning lowers the personnel expenditure.

• High social security benefits (supplementary personal expenses) increase motivation.

• Personally, I have no problems with purchasing.

• Wants too much and everything made immediately.

• Produces too much too fast without consideration for what we can use later.

• Saves in the wrong places with staganating supplementary personnel expenses.

• Bonusues would increase motivation.

Purchasing

• We only meet each other in the boardroom, otherwise we have no contact with each other.

• Rarely thinks of how much material he will need in the future.

• He is a nice guy, who surely does his best.

• High purchase quantities produce high discounts.

• Obtain gains through purchasing..

• With more value analysis I could save material.

• Does not understand purchasing problems.

• Calculates values until they are inefficient or uneconomical.

R & D

• Gives me impossible improvement requests.

• Modify their specifications too often and are too easily moved by the competition.

• Says any developments are unnecessary, too complex, and thereby lead to higher retooling and rework costs.

• Always thinks his ideas are better.

• A fast reaction to market changes means a stronger personnel increase or decrease. So it must continue.

• I have no problems with purchasing.

• Only the highest quality products produce gains.

• Must constantly improve our products.

• Know only one expression

“this costs too much” • And means, simpler

products would do the same job.

Finance and Accounting

• Orients himself too strongly towards the competition. Thinks only of price reductions.

• Believes in marketing too much.

• Very cost-conscience. • Do not understand my cost

accounting.

• Gives too much money away for supplementary expenses.

• Should be more assertive with wage negotiations.

• Relies too much on setting up comprehensive cost calculations for purchasing strategies.

• Rarely thinks of the cost of the product.

• Always wants to be better than the competition.

• Must drastically reduce all costs.

• All products and markets must bring in a profit.

Documents

Topsim Man II PMan en 52p