ABW Simulations - Retail

Retail - Consumer Electronics

The ABW Retail Simulation challenges participants to take over and run a consumer electronics store selling computers, flat screen televisions, accessories and similar.

The company has been in operation for two years prior to takeover. Each team will start with one regular store plus a basic virtual online store and can expand up to four regular stores plus a fully featured virtual online store.

At takeover all teams will have the same size business and equal market share, the challenge that each team will face will be to select the appropriate product mix to sell in their stores to satisfy customer demand. Different products will have different demand characteristics, profit margins, and delivery cycles. Teams will need to determine staff levels and training, set salaries and incentives, manage stock levels using promotions, specials, discounts and clearances. Manage cash flow with a mixture of cash and credit sales, handle debtors and delinquent accounts, and manage borrowings, loans, overdrafts, trade debtors, and receivables. Promote the business via advertising, promotions, and special offers.

Unlike other ABW simulations which model larger companies with shares traded on the stock exchange, the Retail simulation will model a smaller proprietor owned business where performance will not be assessed by share price. Instead, for this proprietary limited company we have developed an algorithm which will assess each retail company’s performance having regard to profit, market share, turnover, and growth. This value will be expressed numerically and the company with the highest number will be determined the winner. The challenge for each company team will be to run the most successful retail business, to do this you will need to keep costs down and profits up while retaining and motivating staff, exceeding customers expectations and beating opposing retailers.

What does the company sell?

The products sold in the retail stores will fall into the following price ranges;

$1.00 to $99.00, -   $100.00 to $999, and - $1,000 to $9,999 which will cover products ranging from a single blank CD to a home theatre system

Some unique characteristics of retail stores include:

Sales yield per square metre or lineal metre of shelf space.

Merchandising
Trading in a range of goods. Promoting the whole range of goods that are sold in a business

Mark-up
The price increase between buying at wholesale and selling at retail often expressed as a percentage of the wholesale or cost price. Compare margin.

Stock control
The method of determining how much stock should be held and how much needs to be reordered and when, with the aim of controlling stock holding costs while maintaining efficient operation of the business.Stock turnover
The ratio of cost of goods sold over average stock (at cost). This indicates how many times, on average, the entire inventory (stock) was sold and replaced during the year.

How is the company managed?

Each team of ten will elect a store manager, Financial controller, Buyer, Marketing Manager, Human Resources Manager, Sales staff, Loading dock supervisor.

Pricing information