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Wednesday, August 25, 2010

Maximize Your Profit

This game “Maximize Your Profit” is the simulation of a manufacturing and selling organization. The game encompasses the reflection on almost all the management functions. It deals with strategy selection, deciding upon the product portfolio or product mix, capital management, production management inclusive of productivity improvement, cost management, inventory control, quality management and profitability planning.

You are the program leader or workshop facilitator and will administer the game.

Divide the participants in groups of 7 to 10 persons randomly. The method for random grouping is given in an earlier game titled “Pass the Message” (URL: Each group acts like one independent manufacturing organization. The persons forming each group are the managers of that organization and their job is to maximize the profit for it's organization.

To start the game, distribute the brief of the game given below to all the participants and ask them to read it carefully. Instruct them to follow each step of the brief and act accordingly. Facilitate the game as it rolls.

Brief for the management game:
The brief begins here:
Your organization has decided to diversify. There are two probable products that your organization can decide upon for your diversification plan. (For the sake of this game) these products are called:

1. Bird (as per the sample given to each group)
2. Box (as per the sample given to each group)

As managers of your organization, you will decide, as a group, which product(s) your company should take up. The following three choices are available to you:

1. Either “bird”
2. Either “box”
3. Both “Bird” and “box”

Now you will have to make certain decisions for which 10 minutes will be given to each group. The data to make decisions is given below:

1. Cost of raw material (per sheet): for “bird” $2.5 and for “box” $2
2. Approximate manufacturing time for one unit by one man: for “bird” 3 minutes and for “box” 4 minutes.
3. Cost of buying technical know-how: for “bird” $10 and for “box” $15. Group that buys technical know-how of both the products will be entitled to a reduction of their total cost by $0.50 for every unit manufactured provided the manufactured items meet quality standards
mentioned later in this write-up.
4. Labor cost: $10 per man for a period of 20 minutes.
5. Selling price (per unit): For “bird” $5 and for “box” $6.50

Each group’s decision whether to manufacture only “bird” or only “box” or “both” will be recorded.

Each group that has decided to buy the technical know-how will be taught the process of production of the product(s) it has chosen.

One more decision needs to be taken by each group for which the data given below should be used:
  1. Total allowed production time: 20 minutes
  2. Total capital sanction: $100. Additional capital can be asked for and will be sanctioned at an interest rate of 15% provided the requisition is made before production begins.
  3. Resale value of unused raw material (only full blank sheets): $1 per sheet.
  4. You final finished products will be bought from you at the given selling price by your customer (the game administrator will be your customer). He will buy it after careful inspection of your product. He will buy only if the product produced by your group conforms to the sample that was given to you earlier. He will reject the non conforming items for which there will be no resale value.
  5. Quality control standards: Conformity to the original display model (sample)
Based on this information you now have to decide:
  1. Whether you need additional capital? If yes, how much?
  2. How many blank sheets (the raw material for making the products) you want to buy?
  3. How many men you want to employ for making the products? You may reduce the number of men working on the production in order to save on the labor cost.
You are given 10 minutes to make these decisions. At the end of 10 minutes the decisions of each group with regard to above-mentioned points will be recorded.

Now each group starts manufacturing its chosen products. Each group will be given 20 minutes to manufacture the items.

After 20 minutes, the game administrator (acting as the customer) will inspect each and every piece manufactured and accept or reject the items depending on whether those meet the laid down quality standards or not.

Based on the total number of items bought by the customer, each organization’s (group’s) profit or loss will be calculated and declared.

Each group will use the following format to keep track of the decisions and their financial implications as the game progresses.
  1. Technical know-how bought: Decision…………. $..............
  2. Additional capital required: Decision…………. $..............
  3. Raw material to be bought: Decision…………. $.............
  4. How many men to be employed for production: Decision……………. $.................
  5. Total cost (total of 1 to 4): $...............
  6. Raw material left over: Decision……….. $...............
  7. (Cost reduction due to) both processes bought: Decision………….. $...............
  8. Total reduction of cost (total of 6 and 7): $.................
  9. Net cost (5 minus 8): $.................
  10. Total sales: $.................
  11. Profit (10 minus 9): $..................
The brief of the game ends here.
After working out and declaring the profits for each group, get the feedback from the participants on the assessment of their effectiveness in playing the game, what went wrong, what went right and what are their learning points.

Share your observations and analysis with the participants. Wrap up the session by giving any additional inputs you wish to impart.

Get Hold of the Related Books
You can order the following books on "management games and icebreakers" as printed books and eBooks from Amazon online:
  1. Classic Management Games, Exercises, Energizers and Icebreakers
  2. Classic Management Games, Exercises, Energizers and Icebreakers (Volume 2)
  3. Classic Team Building Games, Exercises, Energizers and Icebreakers
  4. 101 Classic Management Games, Exercises, Energizers and Icebreakers
Related Reading: (Repository of a large number of articles in management and leadership): and

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