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Regis University

Regis University. MBAC 600 Economics Simulation Week 1. Teams. Assignment of teams Create team name Icebreaker Meeting times. Demand and Supply. Demand and Supply. Demand and Supply Debrief. Course Objectives.

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Regis University

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  1. Regis University MBAC 600 Economics Simulation Week 1

  2. Teams • Assignment of teams • Create team name • Icebreaker • Meeting times

  3. Demand and Supply

  4. Demand and Supply

  5. Demand and Supply Debrief

  6. Course Objectives • Identify and assesses from the perspective of a manager the range of economic assumptions in an environment of rapid change • Distinguish between and analyze concepts and models from micro economics, macro economics and international economics • Explain the convergence of economic systems, the increasing importance of regionalism and the emergence of a truly global economy • Distinguish and appraise: • Demand and Supply • Cost and Revenue • Market Structures • Monetary Policy • Fiscal Policy • Global Business Issues

  7. Regis University MBAC 600 Economics Simulation Week 2

  8. Week 2 Agenda • Debrief: Demand and Supply • Challenge: Demand and Supply • Tasks: Cost and Revenue

  9. Challenge: Demand and Supply Scenario In 2005, APEX received a tax credit for production of its solar panels through the US Department of Energy’s Energy Efficiency and Renewable Energy (EERE) procurement plan. The credit allowed APEX to reduce the selling price of its panels by 15%. In response to this discounted price, APEX experienced a 20% increase in the number of solar panels sold for home construction during the first 12 months following this price reduction. Over time, home builders found that, not only were the solar panels a cost-effective source of residential energy supply, but they also were an added plus in marketing for today’s environmentally conscious consumer. The Department of Energy is considering diverting funds from the solar panel subsidy in order to provide more financial support for alternative energy research. The CFO has asked your team to make a projection of how APEX’s sales volume might be affected if in fact this tax credit is repealed and solar panel prices rise by 15% this year. Is it reasonable to think that APEX will experience a 20% drop in the number of solar panels sold? Or, could you argue that the drop in sales might be something less or something more than this? Use economic reasoning to justify your forecast. Assignment Write a 300-600 word essay in response to the above scenario. This essay must be submitted before next class (when your team enters its debrief). Click save icon (computer disk) on toolbar to save work. When completed, click Submit.

  10. Cost and Revenue • Recommend production levels • Managing changing data

  11. Cost and Revenue Debrief

  12. Regis University MBAC 600 Economics Simulation Week 3

  13. Week 3 Agenda • Debrief: Cost and Revenue • Challenge: Cost and Revenue • Tasks: Market Structures

  14. Challenge: Cost and Revenue Scenario As APEX anticipates significant increases in demand for PVC pipe, it is considering two alternatives: Plan A: Produce all PVC in Illinois, and provide nationwide distribution from that one site. Plan B: Produce PVC pipe both at one plant in Illinois and one plant in Colorado. Distribute east of the Mississippi from Illinois; west of the Mississippi from Colorado. (Or if our story line is flexible enough, locate the Eastern plant in Ohio, rather than Illinois.) Under Plan A, the fixed cost of establishing the one plant is $375,000. The variable cost per hundred feet will be $3 + .001Q. So, for example, the total cost of producing 400,000 feet will be $375,000 + 4000[$3 + .001(4000)] = $403,000. Under Plan B, each plant will be somewhat smaller, so the fixed cost per plant will be $230,000. Variable costs per hundred-feet will be slightly lower: $3 + .0008Q. Distribution costs will also differ under the two plans. If all nationwide distribution is conducted from one plant, distribution costs will be $1.25 per hundred feet. If there is one plant for each side of the Mississippi, distribution costs will be $1.05 per hundred feet. At what production volume does it become more cost-effective to build two plants, rather than one? Show the calculations used to arrive at your answer by uploading a file (MS Excel, scan of a paper-based drawing, etc.) to include with the Challenge for review. What is the additional risk associated with having two plants? Assignment Write a 300-600 word essay in response to the above scenario. This essay must be submitted before next class (when your team enters its debrief). Click save icon (computer disk) on toolbar to save work. When completed, click Submit.

  15. Market Structures • Determine APEX market structures • Analyze APEX’s PVC pipe division • Analyze APEX’s Medical Products division • Analyze APEX’s Solar Panel division

  16. Regis University MBAC 600 Economics Simulation Week 4

  17. Week 4 Agenda • Debrief: Market Structures • Challenge: Market Structures • Tasks: Monetary Policy

  18. Challenge: Market Structures Scenario Examine the barriers to entry into the medical equipment market that you and your classmates described as giving APEX monopoly power. What kinds of changes would challenge the monopoly position of APEX? What kind of conditions would make APEX’s monopoly power less profitable, even if the barriers to entry remained? Assignment Write a 300-600 word essay in response to the above scenario. This essay must be submitted before next class (when your team enters its debrief). Click save icon (computer disk) on toolbar to save work. When completed, click Submit.

  19. Monetary Policy • Prepare for Staff Meeting • Respond to Monetary Policy Question

  20. Monetary Policy Debrief

  21. Regis University MBAC 600 Economics Simulation Week 5

  22. Week 5 Agenda • Debrief: Monetary Policy • Challenge: Monetary Policy • Tasks: Fiscal Policy

  23. Challenge: Monetary Policy Scenario How might APEX’s other divisions be affected by the economic conditions described in this round, and what operating and/or strategic moves might be appropriate for APEX Industries? Assignment Write a 300-600 word essay in response to the above scenario. This essay must be submitted before next class (when your team enters its debrief). Click save icon (computer disk) on toolbar to save work. When completed, click Submit.

  24. Fiscal Policy • Prepare for Staff Meeting • Respond to Monetary Policy Questions

  25. Fiscal Policy Debrief

  26. Regis University MBAC 600 Economics Simulation Week 6-7

  27. Week 6-7 Agenda • Debrief: Fiscal Policy • Challenge: Fiscal Policy • Tasks: Global Business Issues • Final Challenge

  28. Challenge: Fiscal Policy Scenario A new crisis has shaken the US economy and has impacted the global economy as a whole. Describe how various fiscal policies implemented to improve the economy from this crisis could impact APEX Industries. Provide a recommendation of which policy would most positively impact APEX and why. Assignment Write a 300-600 word essay in response to the above scenario. This essay must be submitted before next class in Week 7. Click save icon (computer disk) on toolbar to save work. When completed, click Submit.

  29. Global Business Issues • Country Risk Analysis • Analyze Market Entry Strategies • Manage Currency Investment • Final Challenge

  30. Regis University MBAC 600 Economics Simulation Week 8

  31. Present and Defend • Each team has 30 minutes to present their Final Challenge • Access the team’s presentation from the Week 6-7 screen (Final Challenge) • Professor grades this team challenge and score impacts final performance meters

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