LIST OF ABBREVIATIONS

SF1: Order Form

SF2: Supply cum Invoice Form

R1: Retailer 1

R2: Retailer 2

R3: Retailer 3

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Introduction

Victory is a factory dealing in ice-creams. It manufactures Bars, Cups, Cones and

Shakes. Big Mama and Zodiac collect their orders from Victory and act as
distributors for Retailer 1, Retailer 2, Retailer 3, Retailer 4, and Retailer 5.
The factory and the two distributors send the orders at the beginning of the week
to their distributors and retailers respectively as per the Purchase Order that is
placed at the end of the previous week. All the parties calculate their income and
expenditure at the end of the week.

Motivation for the Study

A business needs to manage its marketing, sales, operations, supply chain,

procurement, and finance efficiently to get the maximum profits. Supply Chain
Management (SCM) is an important function of every organization, whether
small or large. SCM is the active management of supply chain activities to
maximize customer value and achieve a sustainable competitive advantage.
Supply chain management has a huge impact on business. Good SCM can
directly improve customer service. The right product and the correct quantity
must be delivered in a timely manner, to appease both producers and
distributors. An improved and efficient supply chain would help in bringing
down the purchasing cost for the firm. Thus, we understand how an efficient
supply chain can lead to greater profits.
This study would help us understand how inefficient supply chain system can
cause you to lose out on profits, and how efficient supply chain can keep your
customers happy and your profits up.

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Objective

The Simulation workshop aimed at helping students understand scenarios of a

business in real life. The objective was for the students to understand
purchasing and selling of products and keeping the finance of each of these
accounts to ensure maximum profit.
The report would walk us through the workings of each of these purchases and
sales and the final profit achieved at the end of the sixth week.

Findings
WEEK 1

Table 1: Inventory Management for Week 1

Table 2: Balance Sheet for Week 1

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 WEEK 2

Table 3: Inventory Management for Week 2

Table 4: Balance Sheet for Week 2

WEEK 3

Table 5: Inventory Management for Week 3

Table 6: Balance Sheet for Week 3

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 WEEK 4

Table 7: Inventory Management for Week 4

Table 8: Balance Sheet for Week 4

WEEK 5

Table 9: Inventory Management for Week 5

Table 10: Balance Sheet for Week 5

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 WEEK 6

Table 11: Inventory Management for Week 6

Table 12: Balance Sheet for Week 6

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Interpretation

• At the end of the 6th week, Big Mama leaves with a hefty sum of money
amounting to Rs. 2,32,072. The Distributor was able to make a profit
because of its ability to predict future demand and also because of its
understanding of inventory management. They have tried to keep their
inventory as low as possible to reduce their Holding Cost. Although
Week 6 saw Big Mama struggling to predict a closer number to the
demand due to which it saw an increase in its inventory i.e. closing stock.

• An average, Big Mama would order about 900 units from Victory. Week
6 anticipated a massive increase in demand due to Diwali. Big Mama had
to order a total of 2500 units to match the anticipated high demand. We
can see the sudden jump in the graph 1 during the 6th week.

SF2 Factory (Received)

3000

2500

2000

1500

1000

500

0
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Graph 1

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• Similarly, we saw a jump from the Retailers side in the 6th week. All the
three retailers summed up, would order an average of 1065 units weekly,
but the 6th week sees a jump of a demand of 640 more units than average.
This steep jump can be better understood with the graph below.
It is also interesting to see how Week 2 faced a demand greater than the
average. This could be because of variety of reasons, say, festival or due
to the weather conditions in the city.

Retailer Demand
1800
1600
1400
1200
1000
800
600
400
200
0
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Graph 2

• In the balance sheet of the 6th week, R1’s sale amount is given as 0 since
they paid us an extra Rs. 12,000 because of an error in calculation. This
would be rectified in the coming weeks.

• The demand for the new product (Shakes) has been shaky. This could
because of lack of awareness about the laumch of the product or
customers hesitant behavior towards trying new products.

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Learnings

• Learnings as a team leader

i. In a team of very capable members, there would often be situations

where in there would be disagreements amongst the members. It’s
the duty of the team leader to resolve these issues.
During the simulation, it was very important for me to stay calm
and. My duty was not only to not side with any member during a
disagreement, but also to show the members a clear perspective of
each sides. When I was able to do that, soon enough all the
members could see a clear picture and come to conclusions
together.

ii. As a team leader, one would have to multi task. It was my duty to
ensure that the Factory, my Team, and the three Retailers had
access to all the information at the right time.
The simulation was a game of time. Initially, I would forget to post
the SF1s and SF2s on the various groups. It was only with some
practice that I got a hang of multi-tasking.

iii. As a team leader, it came up on me to ensure that everyone was up

to date on their work. This was a brilliant opportunity to showcase
my managerial skills as an MBA student and also gave me
confidence to handle a team.

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• Learnings as a team player

i. This activity made me very clear about the importance of planning

beforehand. The three of us sat down together a day before and
made sure to make tables and add formulas to our excel. Since
each of us were walking on separate retailers, we ensured to divide
the stock (that we receive from the factory) amongst each of the
three retailors using a ratio for all the weeks. Just to be sure, we
also did a re-run of the simulation a day before. This played a huge
role in ensuring we are on time. Because of our planning, we were
able to avoid any sort of penalties from any of the parties.

ii. Once we enter the corporate life, we’ll see members of the team
leave and join the team every now and then. When one of our
members had to leave and a new member had to join, it was crucial
for us to ensure we communicate the roles and responsibilities of
the new member in a very short time. Efficient communication was
the key.
This activity that involved exchange of members, brought us out of
our comfort zone of working with familiar faces and gave us a taste
of the real life scenario.

iii. Prediction was integral part of this simulation in order to avoid any
delays. At some points, we were able to correctly understand the
behaviour of our customers and in some weeks, it was a complete
miss. This made us realise the importance of an extensive study of
the market and an ability to correctly anticipate the an increase or
decrease in demand.

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• Learnings about Supply Chain Management

i. Supply chain is crucial to the smooth functioning of a business.

Any sort of delay from one party, would lead to a delay in the rest
of the chain and therefore causing a havoc. Delays at any point of
the supply chain would lead to disruption in supply of goods to the
final customer which may result to an unhappy customer.
In case of FMCG goods, it becomes even more important to be on
top of the game. For a consumer, if certain brands are not
available, he/she will move on to another brand leading to loss in
potential earnings.

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Appendix

If you wish to access the Order form and Invoice form, you can access it through
this link.

SF 1 – Order form to the Factory

SF 1 – Order form from R1

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SF 1 – Order form from R2

SF 1 – Order form from R3

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SF 2 – Supply cum Invoice Form from factory

SF 2 – Supply cum Invoice Form to R1

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SF 2 – Supply cum Invoice Form to R2

SF 2 – Supply cum Invoice Form to R3

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