MOS Game Objective of the game: (1) Decide upon the rate at which the factory is going to be run during the ensuing 13 weeks and which shift to use during that period.(2) Decide whether or not to employ a supplemental advertising and sales promotion campaign during the forthcoming period and, if so, which one.(3) Maximize the net operating contribution for the period just ended.Factors affecting production costs:1. Marketing CostsType of supplemental advertising and sales promotion campaignExtra costs per period incurred from supplemental campaignApproximate percentage increase in sales for the period that can probably be achieved over the sales that would result from the basic program alone.

Type 1 (Modest step-up in efforts)$ 10,00010%

Type 2 (Major step-up in efforts)$ 20,00020%

Type 3 (Max. step-up in efforts)$ 50,00030%

2. Shift CostsFactory Operating ConditionsOutput Capabilities per Operating Period*Average Direct Labour Cost per Unit

Single shift without Overtime60,000 units or less$ 5.00

Single shift with Overtime61,000 to 80,000 units$ 5.00 for first 60,000 units$ 7.50 per unit thereafter

Two shifts61,000 to 110,000 units$ 5.00 for first 60,000 units$ 5.50 per unit thereafter

3. Extra costs incurred from changes in the rate of factory output: $2.00 per unit of change, regardless of whether the change is upward or downward.

4. Extra costs, in addition to those cited above, from changes in the number of shifts employed in the factory: 1. Going from 1 shift to 2 shifts:$7,0002.Going from 2 shifts to 1 shift:$3,0005. Extra costs of missed delivery promises: $6.00 per unit per period.

6. Extra costs of carrying finished goods inventory: $1.00 per unit per period

Strategy our team followed:In order to maximize the Net Operating contribution, we tried to minimize the production costs. In order to minimize the production costs we did the following:1. Planned the rate of production in a way, so that there was no need to change the shift. It helped us eliminate the shift change over costs.2. We tried to minimize the change in rate of production in different periods, so as to minimize the extra costs incurred from rate of change of production. Except for periods 5, 6 and 9, our rate of change of production costs was very low.3. We tried to avoid the backlog to avoid extra costs of missed deliveries. But in period 8 and 10 we had backlog due to unexpected increase in demands in the previous periods.4. Point about inventory5. We used level 2 marketing in cases where forecasted demand was low to improve sales and increase revenue. In most of the cases level 3 marketing did not prove to be cost effective. We used level1 marketing in usual forecast and no marketing when high demand was expected.

What worked, what did not?Our measures to reduce costs worked well for us and helped us reduce production costs. However we were unable to accommodate the big change in actual demand from the forecasted demand at two periods where the actual demand was unexpectedly higher than the forecasted demand. This resulted in huge backlog. Also we could have improved upon our inventory management. There was no specific strategy as on how much inventory should we carry.Learning