IS/IT for ManagersDiscussion 4: FFTW - Introductions

2010-2011 T3SIDI-31135

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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!

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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

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And …

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Part 1Introducing the Company

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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

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Roses, Irises, Daffodils

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Management Structure

CEO

Financial Manager

Sales Manager

Purchasing

Manager

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Aalsmeer Flower Auction999.000m2

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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

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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”

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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

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Part 2How We Play the Game

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Timeline of Activities

One “week” = 20 mins

Auctionbegins

Customerorders

P/LStatement

due

Firstbid

Second/third bid

Firstquote

Secondquote

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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?

NOTE: It doesn’t matter how many lots there are, matching the minimumauction price is the key. Will not change more than ±10 € a week.

Want to see in this order!

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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 €

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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?

NOTE: Max. price will not change more than ±0,50 € a week.

Want to see in this order!

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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!

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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 €

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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

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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 €

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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

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Part 3Let’s Play!!

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

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Week 1 Customer Enquiry•Customer 1:

▫258 Roses▫104 Irises▫130 Daffodils

•Customer 2:▫120 Roses▫111 Irises▫249 Daffodils

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

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Week 2 Customer Enquiry•Customer 1:

▫309 Roses▫251 Irises▫170 Daffodils

•Customer 2:▫100 Roses▫211 Irises▫142 Daffodils

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

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Week 3 Customer Enquiry•Customer 1:

▫25 Roses▫155 Irises▫40 Daffodils

•Customer 2:▫80 Roses▫115 Irises▫33 Daffodils

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

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Week 4 Customer Enquiry•Customer 1:

▫30 Roses▫198 Irises▫20 Daffodils

•Customer 2:▫44 Roses▫222 Irises▫14 Daffodils

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

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Week 5 Customer Enquiry•Customer 1:

▫222 Roses▫111 Irises▫10 Daffodils

•Customer 2:▫320 Roses▫231 Irises▫200 Daffodils

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

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Week 6 Customer Enquiry•Customer 1:

▫258 Roses▫104 Irises▫130 Daffodils

•Customer 2:▫120 Roses▫111 Irises▫249 Daffodils

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

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Week 7 Customer Enquiry•Customer 1:

▫410 Roses▫344 Irises▫50 Daffodils

•Customer 2:▫220 Roses▫25 Irises▫29 Daffodils

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

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Week 8 Customer Enquiry•Customer 1:

▫28 Roses▫14 Irises▫13 Daffodils

•Customer 2:▫12 Roses▫11 Irises▫29 Daffodils

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

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Week 9 Customer Enquiry•Customer 1:

▫258 Roses▫104 Irises▫130 Daffodils

•Customer 2:▫120 Roses▫111 Irises▫249 Daffodils

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

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Week 10 Customer Enquiry•Customer 1:

▫158 Roses▫222 Irises▫111 Daffodils

•Customer 2:▫161 Roses▫233 Irises▫222 Daffodils

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

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Week 11 Customer Enquiry•Customer 1:

▫52 Roses▫208 Irises▫30 Daffodils

•Customer 2:▫100 Roses▫208 Irises▫90 Daffodils

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

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Week 12 Customer Enquiry•Customer 1:

▫258 Roses▫104 Irises▫130 Daffodils

•Customer 2:▫120 Roses▫111 Irises▫249 Daffodils

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