Introduction

Your very best friend, John Brown, has just inherited $5000 from his grandmother. He made a very smart investment by buying a company called COMPUTER GAMES INC. for his $5000.

He received $5000 of inventory. The inventory consists of 1000 computer CD's which have computer games of various types recorded on them. These games will run on any IBM compatible microcomputer.

He has also taken over various fixed expenses, such as, renting an office, renting a car, paying $2500 per month for office workers, etc.

The computer game disks will be sold wholesale to computer stores for resale. As part of the agreement John must pay the authors of these games royalties of $1.00 per disk sold.

John was a music major and plays in a band every night. He tried running the business for three periods, but he hopes that you can do much better. In fact, he would prefer to stick to his music. He realized that he does not know how to run this business so he has asked you to be the business manager.

You have agreed to accept the position as business manager for three months. You have agreed that your salary will be 25% of the profits after taxes, which will be paid at the end of the three months.

The Object of the Game

The object of this GAME is to select decisions which will realize the largest net profit for your company.

You will make SALES DECISIONS (on a per unit sold basis) which will affect your sales volume, and your competitors sales volume.

You will make COST CONTROL DECISIONS (on a per unit produced basis) which will affect your product manufacturing cost per unit.

You will have a cash flow problem, so you will make decisions to borrow money which are called FINANCIAL DECISIONS.

You will make decisions for each of the following planned expenditures (BUDGETS) for your company for each of three periods:

SALES DECISIONS--------COST CONTROL DECISIONS------FINANCIAL DECISIONS

---------------------------------------------------------------------- Price------------------Production Control----------Short Term Borrowing Advertising------------Employee Incentives---------Long Term Borrowing Product Research-------Maintenance-----------------Reduction in ST Debt Credit Losses----------Equipment Replacement-------Reduction in LT Debt Sales Salaries---------Equipment Expansion---------Dividends # of Units Produced--------------------------------Sale of Stock

Each of the above decisions will have a direct affect on your company's profit. Also you are in an industry of 5 to 10 other firms and the decisions of these competitors will directly affect your profits. For example, if a competitor lowers his price per unit, his sales volume will increase and your volume will decrease.

Each time you change a decision, the computer will display a summary of the results, assuming the competitors do not change their decisions. Take notes on the sresults of each change that you make, so you can develop a set of decision rules or a DECISION STRATEGY.

After you have selected your decisions, then select from the MAIN MENU the WHAT-IF REPORTS option and print out the detailed results of your decisions.

You can select the QUIT MENU (option EXIT TO DOS) at any time and the computer will save your decisions so that you can continue at some other time.

When you have finalized your decisions for Period 1, then select the QUIT MENU (option SAVE FINAL DECISONS). The computer will then print out your INCOME STATEMENT AND BALANCE SHEET so you can present the results of your management to John Brown. After you have printed out the reports, select OPTION 5 (PROCEED TO NEXT MONTH'S DECISIONS) If OPTION 5 is selected the computer will close out all the accounts and update all files so you can continue to make your decisions for Period 2.

Help Menu

Download the BUSINESS GAME and try it. A HELP MENU will provide details of the affects of each of the different types of decisions.