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Simulation Exercise - PDA

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I need help in running the simulation as indicated below:

Your first step is to come up with a strategy for how you will make these decisions.

Access the simulation site (http://forio.com/pdasim.htm). We will be using the PDA Sim

Read the introduction, and study the Financials and the Market Information. Review the Decisions you will be asked to make, BUT DO NOT ENTER ANY DECISIONS! (If you have difficulty with impulse control, try one of the other simulations!)

In a two to three page paper, describe the strategy that you will use and defend why you think that strategy will work. You may append supporting materials, such as data tables and references. Be sure to EXPLICITLY draw on concepts and theories.

Hints for success!

Throughout this SLP, you will be asked to make business decisions under conditions of incomplete information and uncertainty. To do so, you will need to make assumptions about how markets operate. Thus your strategies in approaching this decision need to rely on models, ratio analysis, and theories from such classes as Economics, Finance, Accounting, Marketing, Strategy, and Quantitative Analysis. In addition, the simulation will give you some additional market information as you progress.

Be sure to use the financial data you are given. You will have to crunch some numbers and present your data analysis professionally by creating a few simple tables, charts and graphs.

It is necessary to make specific recommendations as to any pricing changes or allocations to R&D. (Drop the price of model X? By how much?) Your recommendations must make sense given your analysis of the market and chosen strategy.

Turn the 2-3 page paper in at the end of this module.
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Solution Preview

The response addresses the queries posted in 988 words with references.

//Before writing about the simulation process, it is essential to known about the main aspect of simulation. One should know about the key concept of simulation and its main objectives, which will further assist in analyzing the simulation for the given case in an effective manner//

Simulation

Simulation is aimed to increase the overall profit for the given models for the stated time period of five years. Strategy developed for the given case is to decrease the price of X7, maximize the price of product X6 and maintaining the price of product X5 constantly for two years. Product X5 is associated with the plastic case and is in the market for the past 3 years. Customers are less concerned with the performance of X5. So, there is no need to raise the prices of this product, but maximum profit should be acquired from this product. Thus, for two years, X5 should be used to increase the profitability. Current price of X5 is $250.

//Above is the discussion and aim of simulation. Moving to the next directions, explanation about the profitability and revenue of three products is to be discussed//

Profitability and revenue

Product X6 is related to the flat metal case and is in the market for 2 years. Customers are not concerned about the price of the product, but they are concerned with the performance of this product. Current price of X6 is $400, which can be increased due to its performance and quality that can't be adjusted by them due to the price, so it ...

Solution Summary

The response addresses the queries posted in 988 words with references.

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See Also This Related BrainMass Solution

Strategy Planning Analysis Using PDA Simulation

Review your strategy from last module and enter your decisions into the simulation. Run it through all the way through, (ALL FOUR YEARS - NOT JUST ONE!) and do not deviate from your strategy:

Give your final score on the simulation. How does that compare to market potential?

Evaluate the effectiveness of your strategy.

Outline your proposed changes in strategy for the next run and justify them.

Remember that the key here is ANALYSIS. What assumptions did you make when you planned your strategy? Did these assumptions prove to be right, or was there something else you didn't think about that influenced your results? How will taking those factors into account affect your strategy in this upcoming run?

Again, you need to crunch some numbers to determine how successful you were, where the greatest sources of profit are, and what changes make sense. Make sure you proposed changes in strategy are firmly based in this analysis and sound business principles.

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