LOVELY PROFESSIONAL UNIVERSITY

MITTAL SCHOOL OF BUSINESS

ACADEMIC TASK – 3
THE SIMULATION GAME REPORT

Course Code – MGN572

Course Name – Individual Dynamics and Leadership
Name of the Faculty – Navpreet Kaur Ma’am

Student Name – Naveen Kumar

Reg No. - 12000426
Section - Q2041
 Role as a Finance Manager

In this round all the managers were bound to come together and discuss what further action
can be taken and how the budget should be allocated based on the targets. The budget is
decided in different categories like retailer margin, R&D budget, marketing budget, marginal
increase in sales commission, overall increase in sales commission and increase in employee
payout.

1. To increase the sales I have increased the retailer’s margin because 1% increase in retailer
margin gives 5% increase in sales so I have increased it from 25% to 35%. For every 1%
point increase over 20% growth would give us 0.25 points and for every 1% point increase
over 16% PBT margin would give us 1.25 points.

2. For the cost reduction we have to do R&D so it can reduce our manufacturing cost. If we
do 10 crore R&D then our manufacturing cost reduce by 6% and if we do 15 crore R&D our
manufacturing cost reduce by 9%. So I decided to do R&D 15 crore that can affect our
manufacturing costs.

3. In order to increase the sales, if I allot 15 crore marketing budget then we will get 4%
increase in sales and if it is 20 crore marketing budget our sales would increase by 6%. So, I
decided to give 20 crore for the marketing budget so it will maintain our manufacturing cost
as well as sales for the product.

4. If we increase the marginal in sales commission by 1% then the sale would be 5 crore more
and if we increase 1% in overall sales commission then our sale would be 10 crore more.
Here, I did the same to give marginal increase in sales commission to maintain our sales
growth.

5. If we overall increase in sales commission then it will also increase our sales input, so I
give the same.

6. Here I did a mistake I should give a 15% increase in employee pay-out as it will motivate
the employees and it also affect variable employee cost positively but I didn’t give any
increase in pay-out so it is my biggest mistake.
Retailer Margin = 29%

R&D Budget = 15 crore

Marketing Budget = 15 crore

Marginal Increase in sales commission = YES

Overall increase in sales commission = NO

15% Increase in Employee Pay-out = NO (WRONG DECISION)