SAP Distribution Game

Hey Class!

During the past two classes ,we played the SAP distribution game.  The game was kind of hard.  There was a lot to focus on all at once, and a short amount of time to do so.  At the end of the game, my team ranked in at the 4th spot.  I don't think we did too bad.  Our strategy was pretty much to constantly refresh the inventory and if inventory dropped, we raised prices, and as inventory stayed the same, we dropped prices.  While doing this, we also compared our prices to the market prices, to try and keep them as close as possible with those, that way we were not over pricing or under pricing (and losing profit).  The game ranking was solely based on profit, however, in the real world, that should not be the only thing to consider.  There are other things that can be looked at when ranking businesses, such as return on equity.  A business should be receiving back more than they invested in the original inventory.  A company should also be able to work, by computing the lowest costs possible, and a company should also be able to market their products well by keeping costs low as well.  All things should be considered when ranking a business.  I think my team did well on communicating, and telling eachother when prices needed to be changed, or when the amount of money used on marketing needed to be changed. I think what my team could have done better on, is looking at the areas better.  We mainly focused on prices and money for marketing, when we should have focused on what areas we needed to market to (north, west, etc.).  I learned some things during this game.  For one, I learned that setting your prices low will get inventory sold, however, the businesses profit will still be low because some of the costs may not be covered.  I also learned that prices have to be changing constantly based on demand and supply.  The more demand there is, the supply plummets, and in order to not lose all of the inventory, prices have to change at a rate where they are still being sold, but not being depleted at a fast rate.  Running a business seems confusing! There is so many aspects of the business that need to be looked at all at one time in order for the business to run efficiently.  Being a management major, I seem to have a lot to look forward to!