Simulation – Some Words of Wisdom…

16 02 2011

Last semester’s class has some advice for you before you begin your quest for Will World domination.    The advice covers everything from dividing up group tasks to dealing with group conflict to strategies for winning.

The simulation will not be exactly the same as last semester.  You are free to ask for advice from friends who took the class last semester but market conditions and specific events may or may not be repeated.  Don’t make a decision based on what someone from last semester tells you will happen next.  They could be very, very wrong.

Read on for the specific tips…

Advice from the 6th place group

One advice I have for future students is to work as a group at all times. Our group worked well in general but sometimes miscommunication led to  a bad round. The second advice I have is for students again. I encourage students to think ahead of the game because in the business world you don’t know what is going to happen the next day. I think that all groups should divide the work evenly in order for work to be done and avoid the free rider problem. I suggest that each group choose a reliable person as the group leader in order to maintain a strong company.

My advice for next year’s companies would be to make sure that their company members are on the same page from the very beginning. The start is the most important part. The first three rounds will determine the success of every company the rest of the way.

Momentum is such a force in a simulation like this, especially one which is quite short. Groups which can come out of the gate with all cylinders firing, and making smart decisions, will have an easier time toward the end. Even if they make some very bad decisions near the end of the simulation, much of the shock can be absorbed by the padding they already have. The opposite is true for groups which are playing catch-up, because they just don’t have the tools necessary to out-play their competitors in any facet.

The best part about the simulation is that it reflects how the real business world works in many ways. In business, it definitely is harder for companies with smaller market share to overtake their larger competitors.

So for next year’s groups, take some time at the beginning to make everyone’s roles clear, and make sure that they are being as productive as they can be in the first few rounds! You’ll be grateful near the end.

Advice from the 5th place group

I highly advice the future companies of Will Worlds that they have an organized system of responsibility within their groups. In fact, we have noticed that without the great system between the group members, there was very little that can be done. Here is my recommendation for the roles for the stimulation, I believe that should be needed.

There should definitely be one or two people, who have taken the accounting course, doing the accounting practices like making journal entries, making an inventory count and creating the basic financial statements. This person would be helpful in decision-making and saving time for the entire group. Another few people could be making calculations of costs for the entire current cycle. This will show the exact costs for the current cycle. Another person can be recording all the daily decisions and important actions being done, during the class. This way, the group is able to reflect the decisions made in the previous cycle. At this point, the entire group should be able collaborate and report the opinions of what and how much to produce. The person will be doing the accounting material should be able to give out the leftover inventory from the last cycle and cash to date. The people, who calculated the costs, should be able to give an exact number of how much money it costs to produce for each increment. The decision about production would become one huge group decision. One person should be responsible in buying the raw materials, energy and interacting with the bank (the teacher) because this would help prevent lots of confusion. I also highly recommend that at least one person reads everything posted on the Will World Words blog before any decisions are made because the information is really helpful. The people, who aren’t willing to participate in the discussion and not bothered to do anything, should be the person to begin the reputation points questions.
This would be my advice to all the future companies of Will Worlds. I hope this helps you. I hope you all have a good time and good luck. don’t make any bad decisions and be wise.

Advice from the 4th place group

Before making decisions, group members should analyze the demand and supply for Macs or Lyons. For the  first few cycles, it’s really important to work as a group to make the decision of buying as much as resources as you can to increase production and make more revenue. For the last 2 cycles, you should better check the inventories you have left, compares to the amount you really need for the rest of the simulation. This decision needs to be made because you don’t want to being caught with massive of unused inventory and resources and have less cash. As a group, you can analyze the market based on the sales and the price for resources of the previous cycle, such as energy and raw material.

More importantly, you need to plan for the future. By estimating the total production cost, you can decide the number of products we plan to make. Also, decisions about buying extra machines and add-ons should be made in the first few cycle because more sales from the extra products can bring us more money for future expansion and advertisement.
Also the decision of taking out loans should be made as soon as possible with serious considerations of the opportunity cost. Taking loans is very important because you can have more cash to buy resources and hire workers to increase production. The amount of loans should be decided with the discussion of your need and your ability to pay back the loans and interests. When you have the right to set up your prices, you need to decide based on the sales and prices of last cycle and make thoughtfully assumptions. You need to consider the fact that other groups may set lower price than you. If your first set a price much lower than it was in last cycle but it turns out to be too low and you are not making as much profit as you should. Then it was important to make the decision of changing prices instead of sticking to it. If government tries to limit production level due to pollution, you should negotiate with other groups and make and vote for the decision of hiring a lobby or choosing alternatives such as taxes.

For students who will take economics next semester, I would suggest them to have shifts in each round of Will World so that students may get chances to play in different roles. I guess this would better help students to learn how Will World and real world businesses work; also they would know which role they fit the best. It would be the most efficient way for people who works as accountant last round keep working in the next round; however, since we are in the economics class, we are all learning how to run a company. Participation is somehow more important than final results; as students would, nevertheless, learn an impressive lesson if their company failed in the end.  And to shift each other’s role, students may find a best combination of arrangement and make profits in last few rounds.

One piece of advice I would give to future economic students who are going to be participating in the Will World simulations would be to not be afraid to spend a lot within the first couple of cycles. As a group, we decided to spend very conservatively, to not lose too much money. Other companies that spent a lot in the first few rounds to buy machines and etc. didn’t turn a profit initially, but within a few cycles they covered their costs, and began to make a huge profit, pulling away from the rest of the Will World companies. It is harder to spend a lot closer to the end of the game as certain restrictions are introduced to limit production. The best idea is to earn a lot of money in the beginning and just coast through the rest of the simulation.

Advice from the 3rd place group

Going through Will Worlds and being very successful in it I believe that I have come to devise a really good strategy for simulation success. While I do not know of any changes I believe that by following this you should be able to get a head start on the competition. Number one, DO NOT be afraid to take out loans early on, actually that is what you should do. The first round there is take out 2 or 3 loans. There are a couple of reasons for this;

1. Since you will be selling all of your products the first couple of rounds, by taking out the loans it lets you get more machines and produce more early on, this gives you a head start which will pay dividends later on
2. Interest rates on loans will only go up, but if you take them early you will still be able to get a lower rate.
3. It lets you buy more and that will come into play with my second recommendation.

My second recommendation is buy as many raw materials as you possibly can! I can’t stress this enough. With many of the companies increasing production in cycles 2 and 3 raw materials will become scarce. Not only that but the will eventually be a limit on the amount of raw materials you can buy. If you buy them out early you can make deals with companies that were not so fortunate. As an example, my company bought a lot of raw materials early, so when one of the other companies did not have any we were able to trade some of them for a machine. Also, the prices of raw materials will go up so if you buy them while they are cheap you can decrease total costs.

My next recommendation is when making decisions, it is good to get everyone involved, but as cruel as it sounds the big decisions should be made by the person with the most business knowledge. Yes, tasks should be delegated, but a person who does not understand the material will not be able to make effective decisions so it is better to leave them out of that and instead give them a simpler task.

My last recommendation is that you should really invest in buying the add-on for either the Macazoid (turn it into a Macazoid Plus) or a Lyonator (turn it into a Lyonator Supreme). The reason is that it opens you to a whole new market and becomes a source of competitive advantage over the other companies. Not only that, but generally the upgraded Macs or Lyons sell for more money so that is also a way to boost your profits.

In the end you have to remember that this is a competitive simulation and that the outcome does affect your mark, so taking it lightly would be a grave mistake.

Advice from the 2nd place group

One major piece of advice I have to give is to take bank loans early, and take them big. This is due to the idea that it’s easier to make a large sum of money when you start with a large sum of money. Unless you make horrible decisions to cause huge losses, you won’t have any fear of being unable to pay back your loan either – assuming you aim to at least break even every round. Having said that, you should also plan at least one week ahead of when your loans are due to change your plans accordingly. In our statistics, it was pretty apparent that we made less revenue during the week we had to pay back two loans. It’s probably unavoidable, but it’s good to be aware of what’s to come. It also makes sense to take early loans before periods of high demand (further into the simulation), as it ensures maximum output capacity and ability to sell in great quantities. Increasing initial capital is essential for staying strong in the game. No one was able to predict the quota that was implemented later on however, if each group took the initiative to take actions to improve their capital they would have been able to maximize profit prior to the cap. Moreover, during the early rounds of the simulation, 100% sales were guaranteed. In such situations, producing the maximum amount will mean maximum profit.

Young entrepreneurs, future business tycoons and budding economists brace yourselves for the ultimate simulation experience. This is your turn to apply your economics knowledge to the Will World. You will get to play the role of businesspeople and lead your own company to success. The greatest advice I can offer you on your path to success is to delegate the required tasks in Will World among your group members, according to strength. This will make your corporation function more effectively and efficiently. For example, in our group there was a financial wizard responsible for cracking the numbers. We also had two members dedicated to Public relations and marketing responsible for advertising and building reputation. The rest of the group played researcher and decision-maker. The researcher and decision-maker had to use available information to oversee all vital decision and overlook inter-group communication. The tasks should be delegated based on strength and interest. It is advised that the financial wizard enjoys math and the marketing maniacs excel in English. The researchers should be detail-oriented and the decision-maker should posses all these skills. If there are too many people and not enough roles you can always make up jobs such as mascot or intelligence chief (corporate espionage is legal as long as you don’t get caught.) All in all, specializing tasks based on strength, whatever they may be, will help ensure that your company is on its way to Will World domination.

Advice from the 1st place group

One strategy for companies to truly gain a head start in the game is to maximize their overall production within the first few cycles. Contrary to how products are received in reality, demand from consumers soars during the first few rounds with the guarantee that all your products will be sold. You should calculate the break-even points to get a rough idea of the profit margin on both the macs or lyons. For example, as Prestige Worldwide, we calculated the cost of producing 1000 macs and realized that if we charge more than $0.50 on macs then we make profit. The market value for macs was approximately $3.50 during the first few cycles. Since it costs only a small fraction of that amount to create the product, this presented us with the chance to maximize our production because the more we sold meant the higher our profit. Other companies that wanted to play it ‘safe’ only produced a fraction of the amount we produced.

With regards to the results, after the first round, Prestige had double the amount of earnings other companies had. I’m not suggesting companies should maximize their production repeatedly, as one must consider the demand, price and leftover inventory from the previous round. For instance, you would not make another 1000 Macs when the demand is lowering and you still have 500 unsold in your inventory. All in all, there was no point in holding onto your money, since it won’t change overtime. It’s not extremely risky to make bold decisions based on reasonable judgments because there were very few variables, unlike in real life.

At the core of economics is the concept of scarcity and in Will World, this concept was reflected in the limited quantity of raw materials that was available. Every group needed raw materials in order to make finished products to sell for a profit. However, in many rounds, there just wasn’t enough raw materials in the market to fulfill the amount desired by each group. My group experienced this first hand when we made our purchase decision too late and ended up buying the few leftovers of raw material, which was far from the amount we initially intended on purchasing. Yet there was also a round of Will World when our group identified the presence of this scarcity issue and bought up almost all the raw materials in the market to deny other groups the ability to make products. Ms. Cuttle did not see this coming and actually had to tweak the game up a little to give other groups a chance to come back. For if she had not, most likely none of the other groups would have had a chance to compete against us. This leads me to the two advice that I am to offer you: The first is not to get caught by the problem of scarcity – make sure that you make your purchase decisions quick so that you get the raw materials that you need before other groups can take them away. My other advice to you is to exploit all opportunities in which you are in a position to deny raw materials from other groups by buying them up yourself. Our group did that and it led to a first place finish.

Before the simulation even starts, you will have a chance to earn Cuttlebucks through a variety of different activities. Money grows exponentially, especially in the earlier rounds of the simulation. This is why it is imperative that you work hard to gain as much as you can before the simulation even begins. Starting out strong helps build a solid foundation for your company to do well throughout the game and will definitely give you a competitive advantage compared to the rest of the groups . The saying “the rich get richer and the poor get poorer” is very true with regards to this simulation. I cannot stress enough how helpful it is to start out with a lot of Cuttlebucks. A little elbow grease in the beginning will go a long way in securing top marks by the end of the semester. Good luck to everyone in conquering Will Worlds.

During each cycle of the Will World simulation it is really important to read the Will World blog. Reading the blog prior to the next cycle of the Will World simulation will help your company. The reason for this is that your group (company) can plan ahead to what your company will do in the following cycle and this will give your company a slight advantage over your leading competitors. When reading the blog it is really important to pay attention to who’s posting these blogs, whether the source is reliable or not, and what seems to be in trend at the moment. Also you must keep in mind that a higher supply of a certain item will likely result in a lower price for the item. At the same time if the blog post (posted by someone reliable) says that the demand of the goods are going to be low for the next cycle, your best bet is not over producing because all you will end up with is a surplus of goods.

My advice to students who will run the Will World simulation is to always take care of and think of your reputation points. I learned this first hand as I ended up being the reason my group lost reputation points. I was goofing around and ended up getting a restraining order and in turn lost reputation points, this taught me that everything you do is important and counts towards the total reputation of the company. This is useful to know because it applies to the real world as well, when someone does an unfavourable act in the real business world the reputation of their company can go down and others will not want to deal with the firm. It is important to always remember that what you are doing is important and will either improve your company or take it down a bit.




6 responses

16 02 2011
Lok-Hin Yuen

Awh… Having advice is going to make the games less interesting, imo 😛

16 02 2011

I never said all the advice was good… you get what you pay for.

17 02 2011


18 02 2011
☺Tahmid Rouf☺

Awesome possum eats prestige alive. Second response from the second place group is all you second semester people need to know 😉

18 02 2011

Wow OK, so I’m not the only first semester kid who still visits this blog on a regular basis. Nice.

19 02 2011

GO AWESOME POSSUM! We are the best! =D

And no Jeff you’re not the only one. I have this RSS feed on lock 8D

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