MGMT 3123 PRINCIPLES OF MANAGEMENT-SPRING 2024

BIZ CAFÉ SIMULATION INSTRUCTIONS & PAPER REQIREMENTS

Biz Café is a business simulation that provides students with real-world business management experience by setting
up and operating a coffee shop near a college campus.

In the Biz Café simulation, students make several weekly business operating decisions. Results of the Decisions are
summarized at the end of each week, including total revenues (sales), cups of coffee sold (sales volume), coffee
usage (inventory), total operating costs, customer satisfaction rating, brand recognition rating, cash balances, and net
income (profit or loss).

By reviewing the prior week's results and any new information presented, students make changes for the upcoming
week to improve overall business performance. This process will be repeated for sixteen weeks (rounds).

In a real business, things happen each week that require management attention. Businesses operate in a dynamic
environment with frequent external changes, not static or unchanging ones. Effective management requires ongoing
analysis and change to respond to changes in the external and internal environments.

The information below outlines how to approach the simulation to gain the most from the learning experience. There
is also an outline of what information will be required for your analysis paper upon completing the sixteen simulated
weeks (Live Rounds).

REGISTER for Simulation and Pay Fee-Begin by registering for the simulation and paying the $29.95 fee.
Students should have received an email from Interpretive Simulations inviting them to register. If you did not,
notify me by email, and I will send an invitation.

1. Once you have registered and logged in to the site, Read the Student Manual, view the video (Simulation
Tour), and the Quick Start Guide. All are under the Resources tab on the website. This will give you the
simulation background, and the video will take you through navigating the simulation software.
The Student Manual has an Introduction (which gives an overview of the Biz Café simulation and how to
navigate the software) and three major sections:
 Business Essentials brief introduction to the business and the management concepts used in the
simulation.
 The Biz Café Case-information-background information on the business you will be setting up
and running.
 Biz Café Operations Guide- outlines the operational aspects of using the Biz Café simulation
software, including how to get started, the various menus and help features, and a detailed
description of each decision screen and report.

To successfully complete the Biz Café simulation, you must understand the simulation software's operation and the
basics of the Biz Café business.

2. BIZ CAFÉ QUIZ, after you have read and reviewed the Student Manual, you should take the online quiz
on the website to confirm that you understand the business basics and how the simulation software functions.
Taking the quiz and understanding the basics of the Biz Café business will help you make better business
decisions and avoid common mistakes. The quiz grade is not recorded and will not affect your course grade.

3. PRACTICE ROUNDS-. You can complete up to 10 practice rounds to become familiar with how the
simulation works, what decisions are made, and the operating results you get based on your decisions. You

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 may also REPLAY any Practice Rounds to change any decisions you want and see how the results change.

Take full advantage of the practice rounds. Students who do not take advantage of the practice rounds
struggle with the simulation and make many bad decisions due to the lack of understanding of how the
simulation software works and how various decisions affect the results.

Resources are available at Interpretive Simulations if you have problems with the software or any
software's functions. They can be contacted through the website at any time.

As you complete each PRACTICE ROUND, keep a record of each of the decisions you make (initial
business setup and strategy decisions; management decisions, number of managers and servers and pay;
marketing decisions-pricing and advertising; and operations decisions-shop hours and pounds of coffee to
purchase, and the number of coffee cups to purchase); the reasons why you made each decision (what
facts and information you used to make each decision); and the results you got. This information will
better understand the interrelationship amongst the various variables and help you make better decisions in
the live rounds.

4. Business Strategy: Before you begin the Live Rounds of the simulation, determine what strategy you will
use for your business. Will you be a low-cost provider or try to differentiate your business, such as excellent
customer service, a superior product, or somewhere in between? I describe three basic strategies: Low-Cost
Provider (e.g., McDonald's), Mid-range (e.g., Dunkin Donuts), and Premium (e.g., Starbucks). Select one
of these, and then make your Startup and Opening Decisions to support your chosen strategy.

Startup Decisions: you will name your coffee shop and determine what furniture you will purchase and the
coffee maker's capacity for your coffee shop (two options). You may also design a logo for your coffee
shop, but this is not required.

Opening Decisions: To start up the coffee shop (Round 1), make the decisions in each decision category
to begin the first week of business. These Opening Decisions include days and hours of operation, pay for
managers and servers; the number of servers, advertising type, amount, and frequency; the number of
special logo cups to purchase; the kind of coffee, and the number of pounds to order; and pricing of the
coffee.
Make sure you understand each decision you make and why you made it. What facts did you use to
make the decisions, including any principles you applied from this management course or other business
courses you have had, such as marketing, operations, accounting, or finance? How does your opening
round 1 decision support your strategy? How do your Opening Decisions support your business strategy?

Use tools like the Coffee Calculator, Decision Summary, Service Capacity Report, Cash Budget Analysis,
and Breakeven Worksheet to help make decisions and evaluate results. Using these tools will help you
make better decisions and avoid major mistakes. Your Round 1 decisions should support your overall
business strategy, and you should have a sound business reason for each Round 1 Decision.

Handle the Biz Café Special Incidents for each live round, and record your decisions and why you made
each one. Special Incidents occur each week, and opportunities are presented that you may or may not
choose.

Review any News and competitive information available after each round to see if anything might
affect your business decisions for the next round.

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 Before you advance to each round, check the Decision Summary, which summarizes your decisions. If
you want to change any of them based on this summary, you can before you advance to the next round.
Once you ADVANCE, decisions become final for that round and cannot be changed.

Review the results from each round (look at all the metrics provided), determine why you got the results,
and decide what you will change in the next round to improve your results. Also, consider the Incidents,
News, and any other reports presented.

Complete this process for all 16 Live Rounds. It is not recommended that you do all of the rounds at one
time or even on the same day, as you need to carefully evaluate the results to determine why you got them
and then decide what you need to change to get better results for the next round. The student who rushes
through all the rounds does not do very well.

5. FINAL PAPER-You will complete a final paper on the Biz Café simulation following the guidelines for
written assignments for this course. Additional outside references will not be required for this paper, but all
other APA requirements apply.

The paper should include the following:

 An ABSTRACT for the paper
 An INTRODUCTORY PARAGRAPH states the paper's purpose and briefly describes
what you will cover in the paper.
 A brief BACKGROUND of BIZ CAFÉ CASE (background of the Biz Café case,
objectives, $25,000 loan, location, etc.)
 The BUSINESS STRATEGY you selected for your coffee shop, why you selected it,
and supporting Startup Decisions. Include the name of the coffee shop, furniture
selection, and coffee maker selection and how these choices support your strategy.
 OPENING DECISIONS-Week 1 decision. What was each decision for the first week of
operation in all decision categories, why did you make each one, and how does each
support your selected strategy? Decisions include: Management-manager's salary,
number of servers and their pay; Marketing-pricing of coffee, advertising type, and
frequency; Operations-days and hours of operation, type of coffee purchased, number of
logo cups purchased; the number of pounds of coffee purchased.

 SIMULATION RESULTS and Special Decisions-discuss the overall results for the
entire simulation after completing all 16 rounds (weeks), and explain why you got them
in each of the measurement categories (ending cash balance; cumulative total revenues
(sales): Brand Awareness; cumulative net income (or loss); total cups of coffee sold for
all rounds; Customer satisfaction at the end of last round; Brand Awareness at the end of
last round). Also, the total for the Revenues, Net Income, and Cups sold for all 16 weeks.
Include a table with data for each week.
Discuss the significant Special Decisions you made that contributed positively or
negatively to your results.

Severs Adver No.

Week's Price for
Week Week's Week's Cash Customer Hourly tising. Servers
Net Medium
No. Revenues Cups Sold Balance Satisfaction Wage
Income Cup
$

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Week's revenues and Net Income should be totaled at the end of the table for all 16 weeks.

Include in your results a summary of the Special Decisions for each week:

Week Issue Decisions and Reason

No.

These two tables will help you to thoroughly analyze and explain the reasons for your final simulation results. This
paper section should also include an analysis of the results and explain why you got the results. The tables should be
included in an APPENDIX of the paper, and each should be on one full page with proper headings. Ensure that the
tables are readable; each should be on a separate Appendix page.

 DONE DIFFERENTLY based on the analysis of your results, and what you might have
done differently if you could start the simulation over? What mistakes did you make, and
how could you have made better decisions?
 LEARNED ABOUT MANAGING A BUSINESS -as a result of the simulation, what
did you learn about managing a real business? What would you do differently if it was a
real business, and you were the owner and investing your own money?
 SUMMARY AND CONCLUSIONS-a- A closing paragraph summarizing the paper's
key points.

Sample Abstract:

"My coffee shop, the Red Wolf Café, opened downtown on Main St. near a local college campus. The strategy for
the business was a mid-level offering with a good cup of coffee in a comfortable setting and at a reasonable price. At
the end of the sixteen period, I had total revenues of $65,000 and a net profit of $18,500. My customer satisfaction
ended at 84%, and brand awareness at 87%. Analyzing my results, I found that I spent too much on advertising and
priced my coffee a bit high, which hurt my overall profits. If I did the simulation again, I would cut back on
advertising after the second week, pay my servers and manager a bit more, and reduce my price. From the
simulation, I learned that there are a lot of factors to consider when running a business, and it is a balancing act
between several factors. Finding the sweet spot is the key to business success."

Submit the paper in Canvas as an assignment under Biz Café Assignment by the due date.

LATE ASSIGNMENTS ARE NOT ACCEPTED

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 Clint Vogus
Arkansas State University
Neil Griffin College of Business
Principles of Management
2024

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