Working Capital Simulation - MIT CTLctl.mit.edu/sites/ctl.mit.edu/files/tab 6 Working...

1

WorkingCapitalSimulation

JarrodGoentzel

BasedonmaterialsprovidedbyHarvardBusinessPublishing

Toaccessthesimulation

• ClicktheHarvardBusinessPublishing linkintheemailyouweresentbythecourseadministrator

• Itshouldhavethisdomain:cb.hbsp.harvard.edu• Notethatthelinktoaccessthesimulationmaybedifferentthanthe linktootherHarvardBusinessPublishingmaterials(e.g.cases)

JarrodGoentzel

2

Youshouldarriveatthispage

JarrodGoentzel

Logintoyouraccount

IfyouhaveapreviousHBPlogin,thenthelinkwilladdthe

simulationtoyourcoursepack.

JarrodGoentzel

3

RunSimulation

Click “Coursepacks”

Click your course name

Scroll down and click“Run Simulation”

YYYY CourseName

JarrodGoentzel

JarrodGoentzel

Available inyourcoursepack online:

4

JarrodGoentzel

JarrodGoentzel

5

Warmupanalysis:CashConversionCycleforSNC• Calculatethefollowingfor2012

– DSO:DaysSalesOutstanding– DPO:DaysPurchasesOutstanding– DSI:DaysSalesinInventory– CCC:CashConversion Cycle(indays)

JarrodGoentzel

JarrodGoentzel

6

• YousimplymakeYES/NOdecisionsaboutbusinessopportunities• Thereare10opportunitiesover thenext8years

(1024solutionsifyouwanttocompletelyenumeratethem)

JarrodGoentzel

WorkingCapitalSimulation• Roles:YouaretheCEO,Iamtheshareholder• Goal:Makemehappy• Constraint:Yourcreditlinecannotexceed$3.2million; laterImayreducethecreditlineandseehowitaffectsyourperformance.

• Resourcesavailable– Video(6minutes)todescribethegame– Copytoclipboardoption(mayneedtorefreshthebrowser)

– TerminologyPrimer

JarrodGoentzel

7

JarrodGoentzel

Watchyourcreditlimit

Questionstoconsiderforthedebrief

• WhatisthekeytoSNCsuccess?• Whatwasyourobjectiveinmakingdecisions?• Whatapproachesdidyouusetoevaluateoptions?

JarrodGoentzel