1. Retail Challenge an exploration of business
This computer simulation gives you and the others:
an opportunity to manage a “real” business for several simulated quarters
making decisions as part of a small team covering:
Marketing
Operations
Finance
your objective, while competing against the other teams, is to make your business a success

2. The Simulation The simulation consists of three stages: Preparation
Decision-making
Review
Familiarization
Organization
Consider objectives
Consider strategies
Submit Decisions
Simulate
Analyze Results
Replan
Discuss & Compare Results

3. The Situation a subsidiary currently operating
sells three product ranges
Staples
Fashion
Big Ticket
has staff who sell all ranges
You will run this business for several periods, each of which represents one trading quarter

4. Marketing Sales are influenced by price (mark-up) advertising staffing
Inventory availability
the actions of the other teams
You decide mark-up for each product range separately. Advertising and sales staff sell all product ranges.

5. Cost Data Sales staff – $500 per quarter
Other Expenses – $7000 per quarter
Advertising – decided by you
Discounts
Range
Discount Level
Discount
Staples
40,000 5%
Fashion
15,000
20%
Big Ticket
20,000
10%

6. Other Data Prompt Payment Discount - up to 5%
Interest on Overdrafts – 20%/year
Interest earned on Cash – 12%/year
Mandatory Payment to Parent
75% of Operational Income
plus 4% of Total Equity

7. Decisions For each range separately Percent Mark-up Gross Purchases
And in general
Advertising
Sales Force Size
Creditor Days
Use the decision form supplied and complete it carefully and legibly and hand to the simulation controller at the specified times.

8. Results Results are returned to you in three stages:
Preliminary Results
demand at cost & ending stock
Sales, operating profit, cash and overdraft
Full Results
Purchases & sales
Profit & Loss
Balance Sheet
Key Measures
Business Research
Market News (prices & market shares)
Company Reports
Company News

9. Observations it takes time to understand
but the business still has to be run
therefore your decisions will not be perfect
time will be a constraint
by the end you should (just) be in charge of your business
your business skills will be challenged
remember the purpose is to learn!
(rather than just to win!)
so, take time to reflect & review
and have fun!