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IS/IT for Managers

IS/IT for Managers. Discussion 4: FFTW - Introductions. SIDI-31135. 2010-2011 T3. Overview. First run of the business game, Flowers For The World: An attempt to give everyone a common ground for understanding the business processes that are to be supported

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IS/IT for Managers

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  1. IS/IT for Managers Discussion 4: FFTW - Introductions SIDI-31135 2010-2011 T3

  2. Overview • First run of the business game, Flowers For The World: • An attempt to give everyone a common ground for understanding the business processes that are to be supported • Each group must work out the information system that will allow the proper flow of information between each group member • Probably, you will work it out as you play!

  3. Experiential Learning • Learning by doing • But, the person must be willing to: • Be actively involved • Be able to reflect on and analyze the experience • Use problem solving skills to make the best use of the new ideas gained

  4. And …

  5. Part 1 Introducing the Company

  6. Flowers For The World • Small, horticultural import/export and distribution company: • Founded in 1911, headquarters in Cergy • Flowers bought at auction each week • Sold directly to customers through a string of partnerships (flower shops) • Flowers stored in a refrigerated warehouse in Cergy (max. 3 weeks) • Since 1994, specializes in the sale of Roses, Irises, and Daffodils

  7. Roses, Irises, Daffodils

  8. Management Structure CEO Purchasing Manager Sales Manager Financial Manager

  9. Aalsmeer Flower Auction 999.000m2

  10. The Flower Auction • Auctions are held in Aalsmeer, Holland, at 04h00 every Monday morning: • Flowers are offered in varying number of lots, where each lot is 100 flowers (2 lots of Roses = 200 Roses) • Bids are made for each set of flowers (2 lots, etc.): • The auctioneer has a minimum sale price • Once bought, the flowers cannot be returned: • Payment is due before the end of the week • Failure to pay means a one-week suspension

  11. Sale to Customers • Flower shops open at 09h00: • Which is after the auction closes • Our customers (partners) send enquiries for N number of flowers • FFTW responds with a quotation giving price per flower: • Customers will haggle over price • Default delivery of “within 2 weeks”

  12. Profit and Loss Statement • By law, a profit/loss statement is required at the beginning of each week, summarizing the trade for the previous week: • Failure to submit the statement to the local bureau commercial will result in a series of fines: • First offence, 250 € • Second offence, 1.000 € • Third offence, suspension of company activities

  13. Part 2 How We Play the Game

  14. First bid Second/ third bid First quote Second quote One “week” = 20 mins Auction begins Customer orders P/L Statement due Timeline of Activities

  15. Example: The Auction • 2 lots of Roses: • You offer 100 € (Min. price 90 €), you win! • 2 lots of Irises: • You offer 90 € (Min. price 100 €), you lose! • 3 lots of Daffodils: • You offer 1.000 € (Min. price 1oo €), you win? Want to see in this order! NOTE: It doesn’t matter how many lots there are, matching the minimum auction price is the key. Will not change more than ±10 € a week.

  16. Be Careful! • Let’s say 2 lots of Roses sold for 90 € at auction last week • If this week there are 4 lots of Roses for sale and the market price hasn’t changed, the price will be: 90 €

  17. Example: Customer Enquiry • Request 85 Roses: • 1,00 € per Rose (Max. price 1,00 €), you win! • Request 30 Irises: • 0,10 € per Iris (Max. price 0,05 €), you lose! • Request 50 Daffodils: • 0,20 € per Daffodil (Max. price 0,55 €), you win? Want to see in this order! NOTE: Max. price will not change more than ±0,50 € a week.

  18. Delivery Note • A delivery note must be submitted (to me) before the end of the agreed week: • Group 1, Delivery in Week 4 from Week 2, for Customer 1, 85 Roses@1,oo • No partial deliveries (e.g., 40 of the 85) • Once the delivery note has been received the money is in your account: • Failure to submit the delivery note (or on-time) means the order is cancelled!

  19. Opening Position • Roses: • 100 (1 lot), good sales, selling at 1,00 € per flower • Irises: • 50, poor sales, selling at 0,05 € per flower • Daffodils: • 50, average sales, selling at 0,55 € per flower • Bank balance: • 1.000 €

  20. Costs • Flowers: • Auction price • Storage: • 25 € per 100 flowers (or part thereof) per week • Flowers can only be stored up to 3 weeks, and must be discarded once 4 weeks old • Flowers bought and sold in the same week do not incur any storage costs • Advertising: • 25 € per week

  21. Example: P/L Statement • Opening balance: 1.000,00 € • Stock: 100 Roses, 50 Irises, 50 Daffodils (all 2 weeks old) • Income: 0 € • Storage cost: (50 €) • Advertising: (25 €) • Closing balance: 925,00 €

  22. Important! • Auction bids and customer enquiries must list the flowers in order: • Roses, Irises, Daffodils (create forms?) • Put your group number on everything you submit: • Anything that is not readable will be discarded! • You cannot exceed an overdraft of 250 €: • Must declare bankruptcy and withdraw from the game

  23. Part 3 Let’s Play!!

  24. Week 1 Auction • 3 lots of Roses • 5 lots of Irises • 2 lots of Daffodils

  25. Week 1 Customer Enquiry • Customer 1: • 258 Roses • 104 Irises • 130 Daffodils • Customer 2: • 120 Roses • 111 Irises • 249 Daffodils

  26. Week 2 Auction • 2 lots of Roses • 5 lots of Irises • 5 lots of Daffodils

  27. Week 2 Customer Enquiry • Customer 1: • 309 Roses • 251 Irises • 170 Daffodils • Customer 2: • 100 Roses • 211 Irises • 142 Daffodils

  28. Week 3 Auction • 0 lots of Roses • 9 lots of Irises • 3 lots of Daffodils

  29. Week 3 Customer Enquiry • Customer 1: • 25 Roses • 155 Irises • 40 Daffodils • Customer 2: • 80 Roses • 115 Irises • 33 Daffodils

  30. Week 4 Auction • 2 lots of Roses • 5 lots of Irises • 5 lots of Daffodils

  31. Week 4 Customer Enquiry • Customer 1: • 30 Roses • 198 Irises • 20 Daffodils • Customer 2: • 44 Roses • 222 Irises • 14 Daffodils

  32. Week 5 Auction • 9 lots of Roses • 1 lots of Irises • 2 lots of Daffodils

  33. Week 5 Customer Enquiry • Customer 1: • 222 Roses • 111 Irises • 10 Daffodils • Customer 2: • 320 Roses • 231 Irises • 200 Daffodils

  34. Week 6 Auction • 9 lots of Roses • 1 lots of Irises • 2 lots of Daffodils

  35. Week 6 Customer Enquiry • Customer 1: • 258 Roses • 104 Irises • 130 Daffodils • Customer 2: • 120 Roses • 111 Irises • 249 Daffodils

  36. Week 7 Auction • 0 lots of Roses • 6 lots of Irises • 6 lots of Daffodils

  37. Week 7 Customer Enquiry • Customer 1: • 410 Roses • 344 Irises • 50 Daffodils • Customer 2: • 220 Roses • 25 Irises • 29 Daffodils

  38. Week 8 Auction • 2 lots of Roses • 0 lots of Irises • 2 lots of Daffodils

  39. Week 8 Customer Enquiry • Customer 1: • 28 Roses • 14 Irises • 13 Daffodils • Customer 2: • 12 Roses • 11 Irises • 29 Daffodils

  40. Week 9 Auction • 3 lots of Roses • 5 lots of Irises • 2 lots of Daffodils

  41. Week 9 Customer Enquiry • Customer 1: • 258 Roses • 104 Irises • 130 Daffodils • Customer 2: • 120 Roses • 111 Irises • 249 Daffodils

  42. Week 10 Auction • 5 lots of Roses • 3 lots of Irises • 6 lots of Daffodils

  43. Week 10 Customer Enquiry • Customer 1: • 158 Roses • 222 Irises • 111 Daffodils • Customer 2: • 161 Roses • 233 Irises • 222 Daffodils

  44. Week 11 Auction • 2 lots of Roses • 2 lots of Irises • 5 lots of Daffodils

  45. Week 11 Customer Enquiry • Customer 1: • 52 Roses • 208 Irises • 30 Daffodils • Customer 2: • 100 Roses • 208 Irises • 90 Daffodils

  46. Week 12 Auction • 3 lots of Roses • 5 lots of Irises • 2 lots of Daffodils

  47. Week 12 Customer Enquiry • Customer 1: • 258 Roses • 104 Irises • 130 Daffodils • Customer 2: • 120 Roses • 111 Irises • 249 Daffodils

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