The document provides a business plan for Quality Foods Restaurant, which will open in San Diego. The restaurant will serve healthy, low-calorie meals and protein shakes while employing a nutritionist to advise customers. It aims to address the growing obesity problem in San Diego by providing delicious yet healthy options. The business plan outlines the restaurant's mission, vision, goals, target market, and competitive analysis. It believes its focus on nutrition and customer experience will allow it to succeed despite competition from other restaurants.

1. Running head: QUALITY FOODS RESTAURANT 1
QUALITY FOODS RESTAURANT 15
Quality Foods Restaurant Business Plan
Cintia Rocha Pereira
Southern States University
Dear Dr. Taylor
Quality Foods Restaurant Business Plan
Products Description
The Quality Foods Restaurant shall be opened in San Diego in
partnership with a gym. The restaurant shall serve a variety of
foods and protein shakes that are low in cholesterol and sugar as
its primary target is to provide healthy yet delicious meals to
the residents of San Diego. The starting up of the restaurant is
informed by the consistent increase in the obesity cases in the
city, an aspect that is attributed to the types of food that the
people eat mainly in the restaurants (Steele et al., 2016).
Research shows that eating healthy foods and low in calories
makes a person happy. The study also indicates that 75% of
Americans prefer to eat healthy foods. All the foods shall be

2. low in calories with the aim maintaining the health of
consumers (Bridges, 2019). In addition to providing a serene
environment for the customers, the restaurant shall also be
focused on ensuring that all the people eat the foods that help
their bodies to keep fit. The foods in the restaurant shall also be
of high quality and delicious. To enhance the experience of the
customers and also to improve the competitive advantage of the
business, a nutritionist shall be employed by the management to
provide the necessary information to the customers on the
healthy foods they should eat to overcome lifestyle diseases that
are mainly brought about by consumption of junk foods .
At Quality Foods Restaurant, customer's experience shall be the
first priority as it is a factor that shall consistently lead to an
increase in the loyalty of the clients and an increase in the
market base mainly due to referrals. Every activity by the
workers in all departments shall be aimed towards ensuring
there is the best experience on the customer (Bridges, 2019).
Quality foods shall, therefore, be cooked with the application of
innovative skills that are essential towards maintaining the taste
of the food. Most people have a negative notion that most of the
foods that are described to be healthy by nutritionists are never
delicious. The production of delicious foods in the restaurant
shall also aim towards adjusting the mindset of the people. The
healthy foods that are mainly low in cholesterol are important
towards protecting the consumers from disastrous lifestyle
diseases and conditions that are associated with consistently
eating foods that are high in carbohydrates. The nutritionists
shall also undertake the responsibility of providing a well-
outlined program to the customers on the best diet they should
undertake when they need to reduce weight. To compete with
other Restaurants in the location, a marketing strategy applied
shall be based on positioning of the foods and services as the
best in the industry.
a) Mission
The mission of the Quality Food Restaurant is to provide
healthy and delicious food, with quality and speed with

3. competitive prices.
b) Vision
Become a renowned company in the city of San Diego, with
excellent profitability and offer quality services.
c) Goal
Business objective is to grow by 3% year.
Target Market
The restaurant business is considered to be highly lucrative in
the United States and globally. There are more than a million
restaurants in the US, with their returns making major
contributions to the country's GDP. The trends show there is a
consistent increase in the amounts spent in the restaurant. It is
the primary factor that has led to an increase in the number of
restaurants (Dong, 2019). The innovativeness of the
management is the primary aspects that make major
contributions to the success of every established restaurant. It
is, therefore, important to also identify the specific market
target for the services and products when setting up a new
restaurant based on the uniqueness of the products and services.
Quality Foods Restaurants shall take the factors into
consideration by ensuring that its target market is well defined
and the specific core competencies described as an assurance
that the people understand the purpose of its existence.
There is an available market for the products and services
offered by the restaurant in San Diego. There is a high increase
rate of obesity in the city, and people are consistently adjusting
to foods that are low on cholesterol as a means of controlling
the condition (Steele et al., 2016). Various global organizations
that outline the right actions that should be undertaken towards
ensuring healthy nations are consistently advocating for the
consumption of healthy foods as a means of reducing lifestyle
disease. The World Health Organization stated that the
consumption of junk foods is the major contribution of obesity
(WHO, 2018). The organization also indicated that obesity cases

4. have doubled in the last two decades across the world. The
increased consumption of high cholesterol foods is the major
factor that leads to an increase in the cases reported across the
world. Most people prefer tasty foods at the expense of their
health, an aspect that increases their risk of contracting lifestyle
conditions.
Quality foods will be seen as a place where people feel
comfortable and eat well, with pleasure and fast.
The restaurant will develop marketing initiatives encouraging
people to make a habit of frequenting the establishment through
with the gym loyalty policy.
One of the actions applied will be the delivery of cards called
loyalty card, on the day of your first consultation with the
nutritionist. At each visit, the customer will receive a stamp on
their restaurant and gym loyalty card. He will have a free meal
when he reaches the number of ten stamps on the card.
The company will be starting its advertising investment 15 days
before the restaurant opens in strategic locations such as
universities, business centers, offices and gyms.
Product
· Product quality assortment
· Low calorie products approved by nutritionist
· Relationship marketing, and loyalty program.
Price
In determining the selling price of products, consideration shall
be given to the cost of the raw material and the prices charged
by competitors.
· Stamps for the loyalty program
· Birthdays don't pay as long as they bring four companions
· Advertising campaign in partnership with the academy to raise
awareness of the general population, to consume natural foods
as a source of health and well-being for all age groups.
Operational Plan
Quality foods restaurant will be housed inside a gym in the
downtown area of San Diego, in an area of 30m2.

5. Office hours are Monday to Sunday from 7:30 AM to 10:00 PM,
divided into two business shifts.
As the restaurant will serve natural foods it is important for
customers to know where they come from , to this end, the feeds
will be exposed to the clients appreciation so that there is no
doubt about their quality. Another point to be highlighted is the
hygiene of food and the cleanliness of employees wearing
gloves and caps when handling the products.
Customer service will be:
1. Preparing personalized meals with a nutritionist.
By entering your physical information and fitness goal, we
separate and select a source of ingredients.
2. Our team of culinary professionals develop fresh seasonal
recipes and fully prepare your meals for you to enjoy.
3.Weekly rotating menu
We change your menu every week so you can have a variety of
new meals week by week.
4. We provide cardiovascular and weight training plans in sync
with your meal plan and fitness goals, included in your gym
student package.
5.Save time, money
Save up to 10 hours and $ 60 a week by removing groceries,
cooking, cleaning, thus increasing your productivity.
To better serve our customers in addition to being able to eat at
our establishment we will also have the option of ordering.
Industry
The industry is growing at a very high rate due to the increase
in the varieties in the services offered by the various
restaurants. There is, however, a high competition rate in the
industry, mainly due to the limitations of the services and an
increased number of restaurants in the town. The establishment
of a restaurant is mainly focused on a specific theme and culture
towards the delivery of the services to its clients. Currently, the
industry is ranked amongst the fastest growing, mainly due to

6. the application of e-commerce in the industry. In the United
States, it is estimated that more than 60% of the foods are
ordered online (Ert & Fleischer, 2016). It is expected that there
shall be consistent growth in the industry as more innovative
methods are being applied by the upcoming restaurants.
There is an increase in the investment in research and design by
the various restaurants across the world as a means of ensuring
an increase in offering quality foods. With consistent
investment in the research and development, it is expected that
in the future, their performance of the restaurants shall exceed
the expectation of the customers by mainly making quality
foods and offering the best services. The investment in the
industry is also increasing at a very high rate by external
investment as they understand that with the current trend, the
industry will continue to grow. Due to the adjustments in the
economy, most people do not get an opportunity to prepare food
at home, mainly due to the busy schedules leading to an
increase in the number of customers to the restaurants (Sheel,
2017). Stiff competition is an aspect that has led to the maturity
of the industry as every stakeholder must undertake their
activities with a high level of responsibility to ensure they
remain effective.
There is an increase in the need for healthy foods for people to
remain fit and overcome diet-related conditions. Most people in
America have consistently shifted to eating healthy foods with
the aim of ensuring they improve the quality of their life (Hua,
and Templeton, 2010). The constant factors that mainly control
the industry are on the preferences of the customers and also
their demand. The corporations that adopt the necessary changes
in the industry are, therefore, expected to be the main
beneficiaries. Despite the high regulation by the government,
the new entrants should perform better mainly if they invest in
research and development. Another advantage for the industry is
that it can only reduce but cannot collapse as people will always
in need of healthy foods.
The US economy is anticipated to continue growing, and it shall

7. translate to the growth of the industry. There are, however,
factors that have a negative impact in the industry. The cost of
labor is very high in the United States and hence increases the
costs of production and the delivery of services. The industry is
also highly regulated by the government to ensure that all the
entrants provide standard services and products. The restaurants
are expected to pay high rates to the regulation authority, an
aspect that further increases the cost of production and the
delivery of services. The regulation is, however, important
towards ensuring that the public receives the best services from
the restaurants. It is also an aspect that ensures that all the
activities undertaken by the restaurants in the industry are
controlled and aimed towards improving the quality of life for
the customers.
The services and products offered by Quality Foods Restaurant
are viable in the industry despite the high competition rate. The
specific factors that increase the viability of the restaurant are
the investment in research and design. The utilization of the
services of the lifestyle advisor is also important towards
ensuring that there are extension services in the restaurant with
the aim of ensuring that the people identify the specific foods
they should take for them to keep fit. The overall aim is to
ensure the reduction of the lifestyle condition and maintaining
the best flavor on the foods. It is an idea that is unique, and its
application makes the restaurant to be more viable and hence, a
successful endeavor.
Competitive Analysis
The competition is very high in the industry from established
restaurants globally, such as Starbucks and McDonalds. The two
brands are well established in the City and they pose the
greatest threats to the entrants of new Restaurants and
restaurants in the industry. Competition is also high from the
local restaurants that have well established and elaborate
services to the customers. Tocaya organica and Tender Greens
are well developed in San Diego and have also focused in the
production of healthy foods to their clients and also the service

8. delivery in the market. The multinational corporations in the
industry have the highest market share, while the new entrants
such as Quality Foods Restaurant are gaining the market share
slowly. Due to the high intensity of competition in the industry,
individual corporations are coming with aspects that are meant
to increase their competitive advantage. The understanding of
the market is an essential factor that leads to the amount of
market share for every corporation. Another factor that controls
the market share is the application of the right marketing
strategy. There is a consistent growth in sales for the
companies, an indication that the industry is growing at a high
rate. The understanding of the trends in the market is important
for Quality Foods Restaurant, mainly in ensuring that it remains
competitive ad also makes the profits in every decision they
undertake for future advancements.
To maintain the Sustainable Competitive advantage, Quality
Foods Restaurant must undertake the activities that are aimed
towards ensuring that the services are of high quality as
compared to that of its competitors. The understanding of the
immediate competitors is also essential towards undertaking the
activities that are more competitive and attractive to the clients
(Della Corte & Aria, 2016). The overall aim of the business is
to provide the people of San Diego with healthy foods as
compared to their competitors, an aspect that should be upheld
to ensure that they do not lose focus and affect their market
share. Brand loyalty is an essential aspect that must be taken
into consideration towards ensuring that the company remains
relevant in the delivery of healthy foods. The Food and Drug
Administration policies must also be maintained to avoid the
revoking of the license, which usually leads to loss of customers
and in severe cases, the collapse of the company. Some of the
factors as indicated that the restaurant must undertake to retain
a high number of clients are on Client Satisfaction, the
professionalism of all the employees, and product
differentiation.
The analysis of the financial reports of its competitor shows a

9. consistent growth of revenue, which translates to the growth of
the industry. Quality Foods Restaurant should remain focused in
the delivery of healthy foods and the best services to its
customers for it to remain relevant and competitive in the
industry.
SWOT analysis
To start a business, it is essential to do a market research, with
a macro environment analysis, so that the entrepreneur is
prepared with the possible threats, opportunities, strengths and
weaknesses that the company may suffer.
Next you can see the SWOT matrix of the quality restaurant:
STRENGHTS
WEAKNESSES
Different environment
High turn over from professionals
Quality service
Lack of know-how of entrepreneurs
Practicality
Balanced low calorie enhancements
Accompanying a Nutritionist
OPPORTUNITIES
THREATS
Bull Market
Lack of quality workmanship
Reconcile need with pleasure
Strong competition
People most concerned about quality of life
Find products always with the same quality
People looking for places with reduced meal time

10. Financial Plan
This topic is intended for the presentation of the Quality Food
restaurant financial plan, which will be presented in the form of
financial spreadsheets made in Microsoft Office Excel, thus
facilitating the visualization of data.
To open the restaurant the company will start with a cash
balance of $ 320,000.00, which will be used in the initial
investment $ 260,000.00, broken down as follows: civil works,
equipment, machinery, furniture and utensils and pre-operating
expenses.
References
(2019). Retrieved 23 October 2019, from
http://www.annualreports.com/HostedData/AnnualReports/PDF/
NYSE_MCD_2018.pdf
Bridges, F. (2019). Healthy Food Makes You Happy: Research
Shows A Healthy Diet Improves Your Mental Health. [online]
Forbes.com. Available at:
https://www.forbes.com/sites/francesbridges/2019/01/26/food-
makes-you-happy-a-healthy-diet-improves-mental-
health/#13aeb08326f8 [Accessed 11 Nov. 2019].
Della Corte, V., & Aria, M. (2016). Coopetition and sustainable
competitive advantage. The case of tourist
destinations. Tourism Management, 54, 524-540.

11. Dong, L., Ratti, C., & Zheng, S. (2019). Predicting
neighborhoods’ socioeconomic attributes using restaurant
data. Proceedings of the National Academy of
Sciences, 116(31), 15447-15452.
Ert, E., & Fleischer, A. (2016). Mere position effect in booking
Restaurants online. Journal of Travel Research, 55(3), 311-321.
Hua, N., & Templeton, A.(2010). Forces driving growth of the
restaurant industry in the USA. International journal of
contemporary hospitality management, 22(1), 56-68. Retrieved
from,
https://www.emeraldinsight.com/doi/abs/10.1108/095961110110
13471.
James, W. P. T. (2009). WHO recognition of the global obesity
epidemic. International journal of obesity, 32(S7), S120.
Luu, T. (2014). Knowledge sharing and competitive
intelligence. Marketing Intelligence & Planning, 32(3), 269-
292. Retrieved from:
https://www.emerald.com/insight/content/doi/10.1108/MIP-05-
2013-0077/full/html.
s, C. B., Thomas, C. C., Henley, S. J., Massetti, G. M., Galuska,
D. A., Agurs-Collins, T., ... & Richardson, L. C. (2017). Vital
signs: trends in incidence of cancers associated with overweight
and obesity—United States, 2005–2014. MMWR. Morbidity and
mortality weekly report, 66(39), 1052.
Sheel, A. (2017). 2016–2017 Restaurant Industry Performance
and the JHFM Index.
Starbucks Corporation - Financial Data - Annual Reports.
(2019). Retrieved 23 October 2019, from
https://investor.starbucks.com/financial-data/annual-
reports/default.aspx
US second-quarter GDP growth revised to 2.0%. (2019).
Retrieved 23 October 2019, from
https://www.cnbc.com/2019/08/29/us-gdp-q2-second-reading-
up-2point0percent-in-line-with-expectations.html
World Health Organization. (2018). World report on ageing and
health. World Health Organization.

12. Appendices
Competitors Financial Statement
Figure 1 Starbuck's Balance Sheet
Figure 2 Star Bucks Income Statements
Figure 3 McDonald's Balance Sheet
Figure 4 McDonald’s Income Statement
1
MAY 16, 2019
Team 6
B. Yang-Vaernet | C. McCulloch | J. Manuel
M. Hunt | R. Langowski

13. ERPSIM
Visualization &
Analysis Project
HEC Montreal Advanced Game
2
TABLE OF CONTENTS:
EXECUTIVE SUMMARY
................................................................... 2
INTRODUCTION
............................................................................... 3
STRATEGIC PROBLEM
................................................................... 3
RECOMMENDATIONS
................................................................... 10
OPERATIONAL PROBLEM
............................................................ 12
RECOMMENDATIONS
................................................................... 21
CONCLUSION
................................................................................. 22

14. 3
Executive Summary
1. Purpose
The purpose of this report is to evaluate our team’s performance
through our nine
rounds of the HEC Montreal ERPsim Advanced Manufacturing
game. Our goal was to
maximize production and sales in order to gain the highest net
income and company
valuation, not only to win the game but also to challenge
ourselves and put into practice
the skills we gained while studying cost accounting. This report
aims to identify the
problems we encountered that hindered our overall performance
and further understand
the causes of those problems.
2. Problems
Our team identified two main problems we suffered during the
nine-round game, one
strategic and one operational. Strategically, we failed to
identify the most opportune
markets in which to produce and sell products. Operationally,
we struggled to hold a
sufficient amount of inventory as illustrated by the rate our
inventory was leaving the
warehouses. These problems were chosen as the main issues we
wanted to tackle
because after analyzing our data, we believe that they had the
most significant impact

15. on our overall performance
3. Findings
We found that a potential reason for our strategic problem was
the inopportune timing of
market entry and exit in certain markets. This caused our
company to lose out on
potential profits and was an opportunity cost to producing other
products. Additionally,
we placed relatively large material requisition orders which
essentially gave us a fixed
production schedule, leaving little room for flexibility if we
wanted to switch between
products. For our operational problem, we believe the root of
our inventory depletion
problem came from setting the price below the market average
and not shipping enough
goods from the main warehouse to the regional ones. These two
causes resulted in our
inability to optimally sell all of the products we produced.
4. Recommendations
To improve our ability to identify the most propitious markets
to sell products, we should
not only enter successful markets based on the ZMARKET data,
but also hypothesize
where we might be able to gain an edge in niche markets during
the wait for the data to
be prepared. Secondly, having smaller and more constant
production runs will correct
our timing of market entry and exit. Regarding our operation
problems of depleted
inventory and insufficient shipping quantities to regional
warehouses, our
recommendations are to monitor prices better and proactively

16. change prices every 5
days to remain competitive. In addition, we want to enhance our
communication
between sales, production, and shipping and explore factors that
affect shipping through
increased analysis.
4
Introduction
Our group, Team O, ranked No. 2 in the ERPsim Advanced
Game over a series of nine
rounds. We divided our roles into pricing, production, shipping,
and marketing.
Together, our goal was to work cohesively in order to earn the
maximum potential net
income and company valuation. Our strategy before starting the
game was to sell only a
few product lines and place our focus on distribution channels
12 and 14 in order to
utilize price leverage via marketing to gain higher margins.
Despite our slow start in
round one, we were able to quickly solidify ourselves as one of
the top performing
teams. However, after five rounds of play, we not able to keep
our first place position.
Ultimately, due to a combination of external and internal issues,
we ended the nine

17. rounds in second place.
After analyzing our performance, we identified a strategic and
an operational issue that
we were unable to correct during the nine rounds of play. We
were also able to identify
several potential causes of these two main issues. Regarding the
strategic problem we
faced, we failed to identify opportune markets to produce and
push our products into to
obtain significant market share. Operationally, our inventory
sold out quickly in several
rounds, leaving little inventory in our regional warehouses to
sell. In this report, we will
go in-depth about the strategic and operational issues we faced,
explore the various
potential causes of these problems, and discuss
recommendations we would make
going forward into the final six rounds of the Advanced Game.
Strategic Problem
The primary strategic problem we faced was that we failed to
identify the most favorable
markets to enter, as well as exit unfavorable markets ahead of
our competitors. Our
strategy was to produce just a few products in order to minimize
production time and
focus on the markets for those specific products. The products
we chose to initially
produce and sell were 500g Nut Muesli, 500g Raisin Muesli,
1kg Nut Muesli, and 1k
Original Muesli. Later, beginning in round four, we made the

18. decision to produce 500g
Blueberry Muesli and 1kg Strawberry Muesli to add to our
product mix and maximize
our overall profit. Due to our narrow product mix strategy, we
needed to be alert about
where those few products were selling well and gain an edge
before the competition
entered the same market. While we were able to achieve around
95% productivity each
round, our team struggled to find the sweet spot for our few
products to maximize profit
and market demand.
Graphs to Illustrate Strategic Problem
Figure 1.1 illustrates our initial struggle to maximize market
demand in round one. Our
company, represented by the green bars, sold nearly an even
quantity of 500g Nut
Muesli and 500g Raisin Muesli. However, the graph displays
that 500g Nut Muesli had a
much higher market quantity demand than 500g Raisin Muesli
(59.93% to 40.06%).
Proportionally, as shown in Figure 1.2, we should have sold
much more 500g Nut
5
Muesli than 500g Raisin Muesli than we did. The issue shown in
these two
visualizations was that we were unable to sell more 500g Nut
Muesli with regard to the

19. market quantity demanded, thus supporting our main strategic
issue that we were
unable to properly identify and take advantage of the market.
Figure 1.1: Round 1 Quantity Sold per Product by Sales
Organization
Figure 1.2: Net Value per Material Description for Round 1
Figure 1.3 shows the top five product markets in terms of net
value for round five. Even
in round five, our team was unable to identify the top
performing markets and adjust our
product mix accordingly. By round five, we moved into
production for 1kg Strawberry
and were able to utilize the market well for that product.
However, 1kg Blueberry, 500g
Mixed Fruit, and 500g Raisin were the other top three
performing products for round five
and we were unable to produce and sell those specific products.
Out of the top five
products of that round, we only produced and sold two of them:
500g Nut Muesli and
6
1kg Strawberry Muesli. Identifying which markets to enter was
a problem we
consistently encountered throughout the nine rounds.

20. Figure 1.3: Net Value per Product by Sales Organization for
Top 5 Markets in Round 5
Below, Figure 1.4 shows the sale of 500g Blueberry Muesli over
the nine rounds and
compares our company performance with our competitors and
the market. Figure 1.4
corresponds with Figure 1.5, which shows the difference in
overall market sales
revenue over the nine rounds. In Figure 1.4, we can see that we
entered the 500g
Blueberry Muesli market in rounds four, five, and six. However,
in all of those rounds,
the market net value dropped considerably compared to previous
rounds. We sold the
most 500g Blueberry Muesli in rounds four and five, but that
was when market demand
for 500g Blueberry was relatively low.
After noticing this decline, we made the decision to halt our
production of 500g
Blueberry. We then committed to another product in our sales
forecast. Unfortunately,
we sold the last of our 500g Blueberry Muesli in round six,
exiting the blueberry market
right as 500g Blueberry Muesli sales began to spike again. At
this time, it was too late to
switch back into this product without first producing the other
products we had
committed to.

21. 7
Figure 1.4: 500g Blueberry Sales Over Nine Rounds
Figure 1.5: 500g Blueberry Muesli Net Value Changes Over
Nine Rounds
8
Reasoning for Our Strategic Problem
1. Timing of Market Entrance and Exit
One of the possible reasons for our inability to take advantage
of booming markets was
that we were too slow to enter into markets that we saw as up-
and-coming. This issue
would lead to our inability to take advantage of market booms
and caused us to be
stuck with large amounts of relatively unpopular stock.

22. Figure 2.1 shows the percentage change in market demand of
1kg Strawberry from
round to round. There is no bar for round one because there is
no round zero sales to
compare it to, but the total amount sold in round one was
$1,234,539 [$5.09*240,000]
(this calculation was derived from our pivot table of sales data
from SAP database). The
market for 1kg Strawberry increased steadily from round one to
round four. It then
began to steadily decrease (with a couple of spikes in between)
for the rest of the game.
The large increase at the end in round nine can be attributed to
our dumping of
inventory at low prices instead of an actual increase in market
demand.
Figure 2.1: Percentage Change in Market Demand for 1kg
Strawberry from Previous
Round
Figure 2.2 illustrates how our production of 1kg Strawberry
begins in round 3 and
steadily increases until the end of the game. Rather than lower
our production of 1kg
Strawberry as demand decreased, we actually increased our
production.

23. 9
Figure 2.2: Production of 1kg Strawberry by Round
It is clear based on the above charts that our team correctly read
the market in order to
produce 1kg Strawberry in time for the market spike in round
four. However, we failed to
continue watching market trends in order to know when to stop
producing 1kg
Strawberry. We increased our production of 1kg Strawberry
from round four to round
nine, even though the market report shows that the product line
started declining after
round four.
2. Placing Large Material Requisition Orders
Another aspect of the strategic problem we identified was that
we placed large material
requisition orders. Our goal of placing large material requisition
orders was to maximize
production immediately after the goods were received. We did
not want low productivity
or idle time in between orders, so we wanted to load up on
materials whenever we
ordered. However, looking back, this might not have been the
best strategy.
Figure 2.3 illustrates the material requisition orders received on
certain days from

24. rounds one to five. Looking at day 11 of round three in
particular, we received a quantity
of 861,000 units of material for production. Figure 2.4
corresponds to the spike of
861,000 units shown in Figure 2.3 and shows the breakdown of
the 861,000 units in
detail. We intended to make three main products of Strawberry,
Raisin, and Nut Muesli.
Purchasing such large quantities of materials for only a few
select products meant that
we did not have to worry about low productivity, but also meant
that we did not have the
flexibility to change between products efficiently. This was a
huge problem since we
couldn’t take advantage of the markets we perceived as
successful. One such market
that we identified was 1kg Blueberry. Although we saw the
demand increasing, we were
10
not able to switch into this product with such a large requisition
order. By having
material for only a few products, we were limited in producing
only those specific
products and thus limited what products we could sell and the
markets we could enter
into.
Figure 2.3: Quantity of Goods Receipt Rounds 1-5

25. Figure 2.4: Detailed View of Day 11 and Breakdown of 861,000
Units Shown in Figure
4.4
11
We included Table 2.1 to again illustrate how production was
locked in for Strawberry,
Raisin and Nut Muesli late in round three. By the time we
finished producing these
items, it was already late in round four and we felt like we
missed the opportunity to take
advantage of the 1kg Blueberry Muesli market.
Table 2.1: Product Delivery
Recommendations
In addressing the two potential causes of our strategic problem,
we have determined
two main recommendations that could resolve our strategic
issue. As we described
above, part of our strategic issue was entering markets right as
the demand spiked and
exiting markets after demand already fell unfavorably. Though
markets are volatile and

26. sometimes unpredictable, there are times when we should have
known to enter or exit a
market based on extensive market analysis.
Our recommendation going forward is to not only follow the
successful markets after the
ZMARKET data is released every five days but to consider
evaluating where we might
be able to gain an edge in niche markets as well. Since we wait
a full five days for the
ZMARKET report data, there could be a lot of market changes
in the meantime that we
are not accounting for. At that point, when the ZMARKET
report comes out it might be
too late to switch our production to meet the market current
market needs.
We will utilize Lumira and SAP Cloud during the game itself to
predict the patterns in the
market. Initially, each of our team members was responsible for
a relatively simple task
within one given department. Now that we know how to
properly carry out our assigned
tasks, we can designate more team members to do actual
analysis throughout the
duration of the game. Our team will be able to make important
executive decisions
based on predictive analysis and real data rather than guessing
which markets might be
outperforming others and whether we should switch production
lines during the five-day
downtime.

27. We will use a mixture of several charts and graphs that we
believe will highlight the
market trends. The first chart will show the products sold by
round and by sales
organization. This will show us where the large markets are,
where our competitors are
selling the most, and where we have a good market share. In
addition, we will be
analyzing individual products to determine whether the demand
is increasing, beginning
12
to level out, or decreasing. Partnering these two charts together
should allow us to
avoid the issues we had by waiting for the ZMARKET report,
while also giving us
additional insight into our own market power.
In addition, we mentioned that another cause to our strategic
issue of improper timing of
entering and leaving certain markets was due to our large
production runs. We would
often look to purchase way too many products at one time and
would have production
scheduled for over 15 days at a time. We were so blinded by our
productivity
percentage that we failed to efficiently switch quickly between
products.
In order to counteract this, our second recommendation is to
have smaller and more

28. frequent production runs. With our investment in setup-time
reduction, we are able to
maintain high productivity while also having the flexibility to
switch into emerging
products. After creating a budget production schedule with
smaller batch sizes and
strategically timed purchase order conversions, we can still
operate around 90%
productivity. We just need to communicate more efficiently to
ensure we are running
MRP and creating purchase orders early enough to ensure we
don’t run into any slack
time. We believe our lower production runs will allow us to
take advantage of market
trends in order to offer a wider and more coveted product mix.
In short, our two recommendations are 1) using Lumira and SAP
CloudAnalytics to
create graphs in game and 2) having shorter production runs.
These two potential
solutions should help us enter and exit markets smarter and
quicker.
13
Operational Problem

29. The main operational problem we faced during the Advanced
Game was that we were
often running out of products too quickly which left us with
little finished goods inventory
to sustain us through the next production run. As mentioned in
the section addressing
our strategic issues, our initial strategy was to produce only a
few products in order to
maximize production and reduce switching time between
products. For the first round,
we produced 500g Nut Muesli, 500g Raisin Muesli, 1kg Nut
Muesli, and 1kg Original
Muesli. Out of the twelve available products across two
different sizes for distribution,
we only produced four. This meant that we had to carefully
control the level of finished
goods inventory on hand to ensure we would have enough to
sell while other products
were still in production. However, we struggled to keep a
sufficient level of inventory,
with stock-outs leading to gaps in sales negatively affecting our
bottom line.
Graphs to Illustrate the Operational Problem:
Figure 3.1 shows the production and sales for 500g Nut Muesli
in round one. The blue
bars represent production quantity and the green bars represent
sales quantity. The
chart is designed to show our operational problem; our products
sell out too quickly.
Ideal pricing and production result in sales spread over the
period of time between one
production run and the next. According to the graph, we lost out

30. of five days worth of
sales (day 13-18) because we sold out too quickly.
Figure 3.1: Production and Sales for 500g Nut Muesli for Round
1
Figure 3.2 shows the sales and production runs for 500g Nut
Muesli in rounds one
through nine. The blue data points correspond to our production
runs and the green
data points correspond to sales taking place. Any breaks in the
green line represent
times when we sold out of the product too early and lost out on
potential profits.
According to the chart, there was only one production run that
actually lasted into the
next run.
14
Figure 3.2: Production and Sales for 500g Nut Muesli Rounds 1-
9
Reasoning for Our Operational Problem
1. Low Prices Leading to High Demand Resulted in Depleted
Inventory

31. One of the potential causes for our inventory being depleted
was because our team
priced our products too low with the goal of being competitive
in prices, especially in
distribution channels 10 and 12 where the prices are very
elastic. However, our prices
being set too low may have resulted in a substantial increase in
demand. This resulted
in our inventory being sold way too quickly, leaving little in the
warehouses before we
finished another production run for that specific product.
We created a heat map (Figure 4.1) that visualizes our prices in
each distribution
channel comparatively with our competition over the nine
rounds. This graph is a simple
representation that shows how our prices were set much lower
than the average
competitor's prices for distribution channel 10. For distribution
channel 12, our prices
were set lower than the average competition’s prices for the
first four rounds before we
started pricing higher than the average. For distribution channel
14, we priced our
products lower than our competition’s average prices due to a
system malfunction that
locked our price in place for three rounds. Because distribution
channel 14 is comprised
of independent grocers who are highly susceptible to marketing
and are less elastic to
changes in prices, we did not fully utilize our price leverage
with this particular product
distribution channel. It makes sense that we priced a little lower

32. for distribution channel
12 and 10 because they are more price-sensitive merchandisers.
15
Figure 4.1: Average Price per Distribution Channel; Company
vs Competitors
Figures 4.2-4.3 illustrate the various price changes for 500g Nut
Muesli in distribution
channels 12 and 14 in comparison with the market’s prices for
all nine rounds, while
Figure 4.4-4.5 show the same dimensions for 1k Strawberry
Muesli. Looking at the 500g
Nut Muesli in DC 14, the prices our team set for this product
fell below the market price
between rounds three and six due to the system malfunction.
Since DC14 is the least
price sensitive, we were not taking advantage of the market
prices to maximize profits.
In contrast, the prices set for 500g Nut Muesli in DC12 were
relatively even.
1kg Strawberry, on the other hand, was below market price for
the majority of all nine
rounds for both DC10 and DC12. Our goal from this was to
price competitively in these
markets since DC10 and DC12 are both relatively price elastic
and not susceptible to

33. the influence of marketing. We thought that by pricing low, we
would be able to sell
more and thus gain more revenue. However, these lower-than-
market prices may
explain the high demand for our product and thus the reason for
why our finished goods
inventory was depleted very quickly, supporting our overall
problem that we did not
have enough inventory to last us through another round of
production.
An additional issue we noticed was that since the market report
comes out every five
days, our prices tended to lag behind the market. This is
displayed best in Figure 4.2
from rounds three to six. Our company’s price is in green and
our price lags behind the
market average by one round. Given this approach, we are not
optimally pricing to what
the market demands but merely just following what we know the
market bore in the
past. Our pricing strategy was to price around 5 percent over the
market price in DC12,
but this graph shows that we were unsuccessful in doing so.
16
Figure 4.2 Figure 4.3

34. Figure 4.4 Figure 4.5
After looking at our prices for 500g Nut Muesli for DC 14, we
wanted to dive deeper into
the effects of pricing that low. We noticed that our prices for
rounds three to five were
well below the market rate and as a result, we felt that this
would negatively affect our
net income. As shown in Figure 4.6, we first made a graph
depicting the net value of the
market and our company by distribution channel in rounds three
through five. However,
this graph was not obvious enough to the naked eye to discern
anything. We then took
the raw data from the graph and manipulated it in Excel to see
our proportion of sales to
each distribution channel. This analysis can be found in Table
4.1. Our analysis shows
our company did not earn as much revenue from DC10
compared to the market (-6%)
and earned too much of our revenue from DC14 (+9%). If our
company priced correctly,
this distribution would be favorable; but since our prices in
DC12 were higher, this was
not a favorable outcome.
17

35. Figures 4.6: Net Value per Distribution Channel for the Market
and Company
Table 4.1: Table of Net Value per Distribution Channel
From this graph and table, we were able to find that because of
our low prices in DC14,
we were selling a disproportionate amount to that channel. Our
company was selling
9% more in DC14 than the overall market which means that we
were receiving lower
margins on those products than if our sales were consistent with
the market proportions.
In order to tie back into our hypothesis that we had depleted
inventory, we decided to
look into whether or not our 500g products were being sold too
quickly as a result of our
18
low prices. As seen in Figures 4.7-4.9, we looked at the 500g
products that we
produced in rounds three to five. Like on the graph seen above,
the blue lines represent
the production runs for each product and the green lines
represent sales. Anytime there
is a break in the green line, it represents a stockout and thus a
loss of sales for that
period of time.

36. Figure 4.7: Production and Sales for 500g Nut Muesli Rounds 3-
5
Figure 4.8: Production and Sales for 500g Blueberry Muesli
Rounds 3-
5
19
Figure 4.9: Production and Sales for 500g Raisin Muesli Rounds
3-5
As the charts depict, we consistently underpriced our products
which lead to constant
sellouts and lost revenue that could have come from increased
profit margin if we had
priced higher. There are large variations in stockout time
between production runs from
three days in Figure 4.8 to 14 days in Figure 4.9. With this high
variation, there is no
easy change we can make to prices in order to fix all of our
stockouts. Instead, we need
to be more attentive to prices and adjust them in real time
according to historical sales
data.

37. 2. Not shipping enough products to our regional warehouses to
keep up with production
Another cause of our operational problem was that we were not
shipping enough
products to the regional warehouses to keep up with production.
By not shipping
enough of our products, we were not maximizing the amount
that could be sold, thus
leading to the operational problem of running out of products
too quickly in the regional
warehouses. If we managed to ship out all of our products to the
regional warehouses,
then the warehouses would be more adequately stocked to
handle the outflow of
product.
Figure 4.10 emphasizes our company’s total production in
comparison to the total
quantity of goods shipped out to the regional warehouses. Both
this graph and Figure
4.11 were created by linking the yield and goods movement
databases in order to make
the comparison. The only difference between the two graphs is
that Figure 4.11 shows
production vs quantity shipped over all nine rounds. For round
one in particular, we had
produced a lot more than was shipped out. This also happened
in round eight, where
we under-shipped our total production by 28,854 units
[468,000-439,146]. This was
especially detrimental to our inventory levels because we were
selling out especially

38. fast in round eight, where we needed a sufficient level of
inventory to support the
demand.
20
Figure 4.10: Total Quantity Produced and Total Quantity
Shipped to Regional
Warehouses in Round 1
Figure 4.11: Quantity Produced and Quantity Shipped to
Regional Warehouses Over
Nine Rounds
21
Table 4.2 calculates the quantity that was over-shipped or
under-shipped for each of the
nine rounds. The column furthest to the right shows the
cumulative shipments not made
over the nine rounds. Round one had the highest percentage of
goods not shipped
because the 88,487 units left in the warehouse made up 21.22%
of the total quantity
produced [88,487÷417,000=0.2122]. We had four rounds where
we under-shipped the

39. goods we produced. Rounds four, seven, and eight were the
other rounds that we failed
to ship all of our goods with 3% [64,048÷464,000], 0.02%
[48,000÷461,000], 6.17%
[76,854÷468,000] of units not being shipped out.
As a result of the first round having such a high quantity of
produced goods not shipped
out, we constantly had to keep up throughout the next nine
rounds to make up for the
21.22% under-shipped goods. As you can see in the column
furthest to the right, we
were unable to make up for it until the last round. Though these
numbers are low, they
are very inconsistent and fluctuate a lot. The inconsistency of
remaining units in the
main warehouse causes uncertainty regarding the units we keep
in each of the regional
warehouses. For this reason, we believe that it could be a
potential cause of our
inventory levels being so low.
Table 4.2: Over/Under Shipments to Regional Warehouses
22

40. Recommendations
As illustrated above, the reasons for our depletion of inventory
was due to a mixture of
low prices and not shipping enough products to our regional
warehouses. After running
our analysis on low prices, we have determined the best course
of action is to actively
monitor pricing trends and be more proactive on switching
prices every five days. As a
company, we need to get better at monitoring pricing trends and
making educated
guesses on where the prices will be. In the past, we were pricing
to what the average
prices were and as a result, we could not follow our pricing
strategy. Noticing that prices
are on an upward or downward trend will help our company take
advantage of high
demand environments and hedge our losses when demand is
soft.
Secondly, we will switch prices every five days in order to stay
competitive within the
markets and make sure we are executing the pricing strategy we
have set for ourselves.
Since the market reports come out every five days, we will get
immediate feedback if
our prediction on the market is holding true or not. Our
company would rather take a
bolder and riskier stance on the market than always be five days
behind our
competitors.

41. We will rectify our second issue, of not shipping enough to
regional warehouses, by
having better communication between our product, sales, and
shipping segments of our
team and better analysis of factors that affect shipping. In order
to have better
communication, our team plans on talking more with each other
on product sales and
products planned for production in order to get our shipping
right. With better
communication, we are able to quickly adapt to certain areas
buying different products,
and not lose out on sales because products are still in our main
warehouse.
Lastly, we plan on having a better analysis of the factors that
affect shipping. These
factors include inventory reports, sales reports, and our
production schedule. We plan
on shifting some positions on our team so that one person is
dedicated to analyzing
shipping. While communication between roles can lead to the
facilitation of better
analysis, having one person whose specialty is analyzing the
inventory and sales of
regions will greatly benefit our team.
In conclusion, we determined that we had low inventory because
of our imperfect
pricing and shipping schedule. We believe the pricing hindered
our ability to make the
margins we expected to achieve and the shipping did not allow
us to sell enough. Going
forward we plan on having more analysis of the data by shifting

42. around the roles of our
team and better communication of our strategy during game
time. These two solutions
executed properly should fix our inventory problem and help the
team earn the number
one company valuation.
23
Conclusion
While our team performed quite well overall in the extended
game, we definitely had
some areas in which we can improve in going forward. Our
initial strategy was to only
produce around two product lines in order to maximize
production capacity and
minimize production costs. Then around round three, we saw
how different product lines
were experiencing breakout sales and so we decided to change
our product mix and
move into those markets. We also had trouble finding optimal
prices that moved our
products quickly enough to conserve warehousing space but
slowly enough to prevent
stockouts.

43. While taking advantage of high performing markets is a good
strategy, our execution
was poor as we identified and moved into some markets too
late, while failing to exit
other markets when we should have identified a downturn.
While we achieved our goal
of having high productivity, we failed to adapt quickly enough
to change our product mix
to take advantage of booming markets.
Going into the next game, we have a revised strategy that
combines the high
productivity from the last game with more efficient market
analysis allowing us to move
into new markets more concisely. Additionally, we plan to run
production in smaller
batches in order to both save on warehousing costs and to be
able to switch between
product lines more efficiently when the market demand shifts.
This revised strategy will
allow us to maintain high productivity while being able to better
react to market changes;
which will in turn translate to higher profitability across the
board.
After determining our problems our recommendations are as
follows:
• Strategic
1. Utilize Lumira and SAP CloudAnalytics to create graphs of
market trends
2. Have shorter production runs

44. • Operational
1. Monitor prices better
2. Proactively switch prices every 5 days
3. Better communication between sales, production, and
shipping
4. More analysis of factors that affect shipping
Our recommendations are a combination of better
communication, analysis, and
proactive action. With our grasp of the game, we will be able to
consolidate roles on our
team so we can free up one more person for full-time analysis
of the market. The
successful implementation of these strategies will lead to better
performance in the final
game and a number one overall class rank.