ABW Simulations - Manufacturing

Manufacturing Simulation

The ABW manufacturing simulation is industrial-based and challenges participants to take over and run a manufacturing facility. A manufacturer is a business, and successful businesses need to run at a profit. This model is primarily concerned with revenues and the costs of production. Success then means keeping costs to a level where the revenue from sales exceeds the cost of making, advertising and selling that number of products.

The company has been in operation for two years prior to the takeover. Each company starts with three technologically basic factories with the option of buying up to another two to make a total of five factories. Each factory starts with one employee team on single shifts working under standard management systems.

All companies take over operation with exactly the same history and run the company usually for the next two years or eight quarters. Each quarter represents a quarter of a year or thirteen (13) weeks. Decisions are made based on the previous quarter’s trading results. Careful analysis of the reports is required for future decisions which need to be submitted within specified timelines.

What does the company produce?

The company is a manufacturer of sporting goods. The type of product that is made can be determined at the start of the simulation. It has a price range of $200 - $600 and so it can be bicycles, skis, tennis racquets, golf clubs or any other similarly priced product.

Where does the company sell its products?

The company sells its products through salespeople to sporting stores in three markets; the factory home state, other states nationally and the export market (overseas). At the beginning of the simulation, the sale price is set to $250 in the home state and other states and $125 US for the export market. All dealings in the export market are in US dollars.

How does the company produce the sporting goods?

The company purchases the sporting goods in kit form (raw materials) to assemble and package them for sale.

How is the company managed?

Each company should elect a Chief Executive Officer and then divide into each of the Marketing, Operations and Corporate positions. To succeed someone should be responsible for each position as every position is important for making the decisions and for the success of the company.

The key to success is to work together as a team.