Team D Strategy for Simulation 2
Team D’s strategy for the next simulation will be to buy large quantities of raw material and produce maximum amounts of product in the first quarter to meet maximum capacity. Furthermore, we plan to invest in marketing at around 3%. Our marketing tactic will be to invest marketing expense into two products per geographical area, so that each geographical area will have two highly marketed products. In our second quarter, we will watch the sales reports and inventory levels closely. When our resources are low we will replenish our inventories to reach capacity levels so that we do not lose money on interest charges that are related to inventory costs. We will use a just-in-time approach to purchasing and production. Also in this quarter we will consider changing the prices of our products, depending on our market data. Our goal in this simulation will be to maintain low inventory costs, and increase sales of our products. In our third quarter, we will continue monitoring our sales reports, inventory levels, production schedule, and market report. Based on our results, we will analyze each report and determine whether we need to change prices or change marketing expenses. We will also monitor our financial statement and determine if there is room for loan repayment to decrease our interest expenses. We think it is important to note that in order to maintain a realistic approach to the simulation we will aim to have an operable amount of inventory at the end of quarter 4, as if the simulation were continuing into quarter 5. In our first simulation round we were not in sync with one another and our communication was lacking, as evidenced by our poor organization even in the 2nd and 3rd quarters. To tackle this issue we have decided that we will divide the operational, reporting, decision and accounting transactions of the simulation