INSTRUCTIONS BEFORE STARTING THE SIMULATION 
To: All Participants  
 
Your team has been placed in charge as Directors on the Board of a company. The rules for
managing your business are explained in the Participant Manual. These rules would be clarified,
amplified and may be modified by another documents and instructions by the Simulation
Administrator from time to time. He will also inform you the tenure of your team’s appointment.
Please be guided by the following, too:

1. The winning Criterion for evaluation of the performance of your Team is the Cumulative
Profit after Tax (Cum PAT) at the end of the last quarter of this event.

2. Your team will be given a unique Team ID and Group ID. These would identify your team in
all decision forms, reports and communications from and to you, during the event.

3. You will also receive login id and password for downloading and uploading information as
well as Decision Form. The safety of login and password will be the sole responsibility of
the team. In case of loss, these will not be changed. However, the same login password
will be provided to your team.

4. Your team will be given a Standard Decision Form in Excel Format for each Quarter. You
will submit the same on time through the method explained by the Games Administrator at
the end of every Quarter. Once the time is closed, it is not available for revision, modification
of entries or for any other reason. On e-submission of form, if you submit a blank form, the
previous Qtr decisions will be taken automatically. No request for filled form will be
entertained. Please maintain the backup for your record.

5. Chairperson must authorize the decisions of his Team for each quarter.

6. The length of each Quarter may range from 30 minutes to 40 minutes. Please submit the
Decision Form within the stipulated deadline as announced. You will not be allowed to get
any extension in time limit for submission of the Decision Form.

7. The Sector Analysis Report (SAR) gives you an overview of the industry. Cost and other
constraints for the case are shown in the Starting Conditions. The financial position of your
Company at the beginning of the Game (Quarter zero) is given in the Management Report
(MR). A comparative statement of the Teams competing in your Group is given in the
Sector Update (SU). More information would be made available to you at prices mentioned
in the Information Packages section of the Starting Conditions or as decided by the
Simulation Administrator.

8. Changes in the external environment and some managerial proposal may be communicated
through the quarterly Gazettes. Please note that it is your responsibility to ensure that you
received a set of Decision Forms and copies of the Gazette for every Quarter.

9. On receipt of the Management Report and Sector Update of any Quarter, you must
verify their contents against the Decisions taken by you. If you do not report any
unexplainable discrepancy between your decision data and your results within 10
minutes thereafter, the data used for the process will be considered good and binding
on the Team. No change will be accepted, thereafter. However, the SIMULATION
ADMINISTRATOR RESERVES THE RIGHT TO REPROCESS THE RESULT OF ANY
QUARTER. HIS DECISIONS ARE FINAL AND BINDING ON ALL PARTICIPANTS, THEIR
TEAMS AND SPONSORING BODIES.
Page 1
 
 Sector Analysis Report – MPX13.0

MPX –Mobile Music player Industry

We will be evaluating performance based on Cumulative Profit after

Tax (CumPAT). As always the interest on the shark loans in the
Last Quarter will be deducted from your winning criteria in the Last
Qtr. The team with the highest Cumulative Profit at the end of Last
Quarter will be declared the winner.
*****************************************************************************
Job Description
1. Decide within the team who will play the following roles
a. CEO
Your job description is to
• Assess the economy, (GDP, inflation etc) and business cycle and draw up a
long term plan for your company
• Facilitate the budgeting and review process
• Reconcile conflicting demands of operations, marketing and finance
• Motivate and lead your team through the minefield of quarter to quarter
business decisions

b. CMO
Your job description is to
• Forecast product demand and overall market size
• Establish a pricing and sales policy as well as brand propositions for your
products
• Establish product mix policy
• Establish a collection policy for the market

c. COO
Your job description is to
• Decide on the level of production and overall production capacity
• Ensure availability of raw materials for production
• Evaluate capital expenditure and process improvement proposals

d. CFO
Your job description is to
• Report on figures in the financial statements
• Trace these to operational as well as long term decisions
• Ensure availability of cash to meet operational and long term requirements

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 Sector Analysis Report – MPX13.0

Introduction
The report highlights some of the basic features of the market for MPXs. Following the
emergence of the Internet as key enabler technology, the music industry has seen turbulent
time. As an initial entrant into the Internet area, the music industry has, to a more or less
extent, shaped critical social, legal and business issues in the area of Internet enabled
businesses. The evolution of the industry has seen a constant struggle for supremacy between
content providers, channels and consumer electronics and technology that enable users to
enjoy the benefit of high quality and speed enabled by the Internet. The emergence of the MPX
has enhanced mobility and is viewed as a critical technological component of the music
industry. To what extent will MPX revolutionize the music industry? How will its emergence
affect other portable media players? Will technological convergence support or harm the MPX
industry?

The Product
MPXs are mobile music players. Unlike the “walkmans” of the 1970s – the primary function of
walkmans and MPXs are inherently the same – MPXs have the capability to store large volumes
of music content and thus are considered as an important enhancement over cassette-playing
walkmans. The evolution of the MPXs can be traced to the early 90s, when flash memory was
first integrated with music amplifiers– as a storage device. Since then developments in the
semiconductor industry, software and electronic industries has tended to reduce the form factor
of music playing and storing devices and led to the emergence of the modern MPX players.
Although MPXs have been around for over 10 years now, the introduction of the iPODs in the
early 2000s has galvanized the industry which has since shown impressive growth rates.

MPXs is a generic name for mobile media players that employ the MPEG x format. These
players come in different sizes and with varying add-on functionalities. Increasingly, unlike the
earlier generation mobile music players (Walkmans), this class of products are closely aligned
with the developments in the computer technology and are viewed as a mobile accessory to a
desktop or a laptop computer. This association is natural since the new generation mobile
media players get their content from CDs/DVDs and most importantly, the Internet. Post
Napster, the re-organization of the music industry, has made the Internet, the largest channel
of music sales globally.

The challenge of the MPX manufacturer/designer has always been trying to get the combination
of form factor and functionalities that appeal to the target population. When they do get it
right, growth has been astronomical; where they haven’t got it right, the products have bombed
Page 3 -3-
 Sector Analysis Report – MPX13.0

in the market. The key combinations that have emerged over the years as “winning”
combinations are

• Form factor [The shape, size of the device]

• In built FM radio tuner [Yes, No]
• Size of the LC Display device [Small, Medium, Large]
• Storage Size [0.5 to 5 GB ]
• Output devices [Earphone types, Hi Definition etc]
• Energy Source [Power adapters, USB, Battery type]

The various classes of products in the MPX industry revolve around the combinations that have
found to be “hits” with specific market segments. The classes of products are:

PALMs – are that class of MPX players that have found to be the most commonly accepted
design of mobile media players. These have fairly large LCD
displays, have medium sized storage capacity 1-2 GB, are sold
along with Hi Definition earphones and are powered by Li
batteries – charged through a USB power source. This
combination underlines the key value proposition that the MPX
player provides to the end customer – ability to store large
number of songs, organize and play on request, easy to carry and
easy to buy . Also, as PALMs have diffused into the market, the
MPX manufacturers have sought to position this as a substitute for existing home entertainment
systems. In order to be able to do this, the PALM has been engineered with a host of interfaces
that make it possible for it to serve as the “brain” behind the home/car/mobile media player.
As a result, the PALM is considered to be the largest segment of the MPX market.

MILLI – While PALM caters to the young music connoisseur, its price
point has found to be beyond the reach of a large number of teenage
and college kids. Keeping this in mind, the MILLI has been designed to
retain the key value proposition, but engineered to meet the needs of
this market. It has a smaller display (a major cost component in MPX
players), smaller form factor and hence smaller storage capacity (1-1.5
GB). Since it is targeted at younger audiences, the need to link with
accessory devices has been eliminated, thus bringing down the cost substantially.

Page 4 -4-
 Sector Analysis Report – MPX13.0

STICKs –are mobile music players – as opposed to media

players. They focus primarily on customers who want to hear to
music. As a result STICKs do not have display devices – which are
eliminated to further reduce the cost to customers. This product
has been envisioned as one that will be used by computer/laptop
owners who wish to use the MPX primarily for music while they are
mobile and are able to use their computers/laptops for all other
media playing applications. Also, since they are more dependent on the computing interface, it
is presumed that their primary storage devices is the computer and are able to replenish songs
in the STICK in a fairly regular manner. Thus the STICK is a temporary storage of music that is
of current interest. This has resulted in STICKS having small storage capacity and has made it
possible to reduce the size of the MPX player as well.

BONEs – This is a class of MPX players that are now sold in the market directly but are
wrapped around other mobile devices and are embedded in them. This product consists of a
storage and media playing software. The display unit
and the output units are integrated by the buyer with
their existing products (say, mobile phones, smart
phones, cameras, toys etc). The customers of this
product demand high level engineering content in the
product so as to be able to integrate it with their
other devices. The entry into this market has been
difficult since manufacturers need a strong design competency to be able to support the needs
of the customers in this segment.
Current Price Bands for the products in the MPX industry. Firms with prices outside
this band will receive no sales.

Limits PALM MILLI STICK

Upper 550 500 350
Lower 400 350 250

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 Sector Analysis Report – MPX13.0

About MP3 from Wikipedia

MP3 is a compression format. It provides a representation of pulse-code modulation-encoded (PCM) audio data in a much
smaller size by discarding portions that are considered less important to human hearing (similar to JPEG, a glossy
compression for images). A number of techniques are employed in MP3 to determine which portions of the audio can be
discarded, including psychoacoustics. MP3 audio can be compressed with different bit rates, providing a range of
tradeoffs between data size and sound quality.

The MP3 format uses a hybrid transformation to transform a time domain signal into a frequency domain signal:
32-band polyphase quadrature filter 36 or 12 tap MDCT; size can be selected independent for sub-band 0...1 and 2...31

Aliasing reduction post processing

In terms of the MPEG specifications, AAC (Advanced audio coding) from MPEG-4 is to be the successor of the MP3
format, although there has been a significant movement to create and popularize other audio formats. Nevertheless, any
succession is not likely to happen for a significant amount of time due to MP3's overwhelming popularity. MP3 enjoys
extremely wide popularity and support, not just by end-users and software but by hardware such as portable media
players (referred to as MP3 players) DVD and CD players

Inputs for MPXs

The two key raw materials used in the making of MPXs are Wafers and Wraps. These Wafers
and Wraps in varying proportions are used to assemble MPXs of various types. This has been
made possible by the concerted efforts in modularization of these materials. The economies of
scale associated with the manufacturer of Wafer have made it concentrated in a few countries
and is primarily imported into the country. Wraps are available domestically and consist of
electronic display and output devices.

Nature of the Market and Competition

The MPX industry is fairly a new industry, but has close association with several existing
industry segments. While the product definitions described above have evolved in the last few
years, industry sources are convinced that they are by no means stable. The pace of
technological change, the potential for technological convergence, the emergence of new
business models around the Internet and changing life styles are constantly putting pressure on
the prevailing dominant designs. This is reflected in the results of a recent survey, displayed
below, by several market research firms on the future expectations of market share amongst
the four segments. While there is a general agreement on the direction, there is no consensus
on the pace of change.

Page 6 -6-
 Sector Analysis Report – MPX13.0

The emergence of the dominant market segments has played an important role in stabilizing
the basis of competition in this industry. In the earlier years, price variations amongst products
with similar features were quite common, making it difficult for the consumer to make choices.
Now, each market segment is characterized by a price band and the battle for supremacy is
within this band. While price continues to be the key basis of competition, the perception of a
company in terms of brand, has increasingly started to play a role. Companies which invest
consistently in brand building – through advertising, co-branding with accessory manufacturers
and content providers, technology tie-ups with complementers etc are likely to benefit in the
market. Chanakya is gradually emerging as the global hub for the manufacture of MPX players.

Annual Market Size for MPXs in Chanakya

1,400,000
1,200,000
No of Units

1,000,000
800,000
600,000
400,000
200,000
-
-3 -2 -1 Current 1 2
Year

The Strategic Question

Will the MPX industry retain its position amongst consumer electronics companies or will it be
subsumed as an OEM to this industry? This question has been debated at length at various fora
and jury on this is still out. On the one hand, analysts believe that MPXs have come to stay and
has become a lifestyle product. Currently penetration of MPX is around the 20-30% of the
potential market. With the relatively rapid growth that has been witnessed over the past few
years, the market is likely to get saturated in about a year or so. Given the changes in
Page 7 -7-
 Sector Analysis Report – MPX13.0

technology, there exists a potential for a good replacement market to thrive. Thus, one school
of thought believes that MPXs are here to stay and substantial investments in brand building
are likely to be the key strategic initiative adopted by manufacturers for years to come. On the
other hand, the sceptics in this industry believe that the 20-30% penetration will grow to
around 50-60% in the next few years and even there, the available market is likely to shrink –
primarily due to cannibalization of this market by higher end electronic devices that would
embed MPX players within them. Thus, they question the very existence of the replacement
market – since according to them, the 20-30% of initial adopters will replace their need for
MPXs through other products. They are encouraged by the increased convergence of
technology and the belief that size of the consumer’s pocket is constrained – not in terms of
money (which is not a constraint) - but the physical space available to handle more than one
mobile electronic equipment. These analysts are prevailing upon the industry to focus on
growing the BONE market and focus on building a strong technology competency to be able to
benefit from this eventual transition of the industry.

*****************************************************************************

Page 8 -8-
 MANAGEMENT AIMA

CHANAKYA Cash Statement

THE BUSINESS DECISION GAME
Ltd. REPORT DESCRIPTION CU

A0
Operation Cash Inflows 4,855,000
Income Statement
Sales Revenue Collection
Results of Quarter Current Quarter 4,855,000
Previous Quarter 0
DESCRIPTION CU

0 Operation Cash Outflows

RM & Contract Mfg payment
3,080,000
3,760,550

INCOME Current Quarter

Previous Quarter 0
Balance Sheet Net Sales Revenue 4,855,000 Manpower
Other Income 0 Current Quarter 232,000
DESCRIPTION CU Previous Quarter 0
Total Income 4,855,000
Warehousing Charges 0
Share Holders' Funds EXPENSES Production Overheads 200,000
Equity Share Capital (FV=1) 7,000,000 FG Op Inv (incl Contract Mfg) 0
Selling, Dist and Admin costs 248,550
Res & Surplus or Ret Earnings 346,115 3,080,000
Raw Materials Consumed 0
(Eq share prem: 0.00 ) Information Package
+Manpower 232,000 0
Preference Share capital Product Design & Certification
( ) 0 =Total Direct Costs 3,312,000 Interest Flows 0
(Pr. share prem: 0.00 ) +Warehousing Charges 0 Net Interest Paid
0
Loan Funds +Production Overheads 200,000 Interest on Bank OD
0 0
Two Year Term Loan =Cost of Production (CoP) 3,512,000 Interest on Term loans
0 Interest on Bonds 0
Three Year Term Loan Goods Available for Sale (Op+CoP) 3,512,000
Bonds 0 Shark Loan Interest 0
Less FG Closing Inventory 0
Total Sources 7,346,115 3,512,000 Income from Investments (+) 0
=Cost of Goods Sold
Fixed Assets Gross Profits 1,343,000 Corporate Tax 148,335
3,000,000 248,550
Assembly Plant (incl Plant under inst) Selling, Dist & Admin Expenses Ext item,inv writeoff, disband(+/-) 0
less Accumulated Depreciation 300,000 0
Bad Debts Net Operational Flows 946,115
Machinery (incl Mach under instal) 3,000,000 Cash Discount+Bill Disc Chges 0 Appropriations
less Accumulated Depreciation 300,000 0 Preference Dividend 0
Information Package
Total Fixed Assets 0 Equity Dividend 0
5,400,000 Research & Develpment
Capital Inflows
Investments & Vendor Deposits 0 EBITDA 1,094,450
Depreciation & GW amortization Overdraft and Loans Taken 0
1,946,115 600,000
Current Assets
EBIT Capital Raised
0 494,450 0
RM+FG Inv Pref Shares Issued
Bank Overdraft Interest 0
Accounts Receivables 0 Equity Shares Issued 0
Shark Loan Interest 0
Cash on Hand 1,946,115 Capital Outflows
2/3 year Term Loan Interest 0 0
Less Current Liabilities Investments
0 Bond Interest 0
Accounts Payables Principal Repayments 0
0 Misc Exp, Royalty, Ins etc 0 LC Amount Repayed 0
Maturing Term Loans 0 Total Financial Expenses 0 Cap Expenditure 0
Bonds maturing 0 Corporate Tax 148,335 Net Capital Flows 0
Bank Overdraft 0 Ext item,Inv write off, disband 0
Shark Loans 0 Profit After Tax (PAT) 346,115
Appropriations Misc Exp, Royalty, Ins. etc 0
Total Net Current Assets 1,946,115
Total Application of Funds Dividend on Preference Shares 0 Opening Balance Cash 1,000,000
7,346,115 Dividend on Equity Shares 0 Shark Loans Raised 0
Net Income to Retained Earnings 346,115 Closing Balance 1,946,115

SUMMARY OF OUTSTANDING TERM LOANS & BONDS (PLR + %) Inventory Data (ID)
# AMOUNT INTRATE DURATION ENDS IN AMOUNT DUE EQI Finished Goods PALM MILLI STICK BONE

Order Enq Recd Dom(units) 5,000 4,000 2,600

Opening Inventory (units)
Actual Production (units) 5,000 4,000 2,600
Equivalent Capacity Used 5,000 4,000 2,600
Proc from Contract Mfg (units)
Sale Dom + Export+Var (units) 5,000 4,000 2,600
FG Closing Inventory (units)
Material Consumed / unit
WAFER 3.00 2.00 1.00
WRAP 2.00 2.00 2.00
Material Consumed (units)
WAFER 15,000 8,000 2,600
WRAP 10,000 8,000 5,200
Report on the Market submitted by : Your Corporate Planning Dept
Manpower Cost/Unit 20.00 20.00 20.00 20.00
Forecast of General Economic Environment Your Direct Cost pu 345.00 270.00 195.00
Avg Ind Selling Price CU 475.00 425.00 300.00
Qrtr-> 0 1 2 3 4 Your Market Share (%)(units) 10.00 10.00 10.00
Index (Base )
Raw Material Numbers Value Cu.
GDP 102 104 105 106 109 WAFER WRAP WAFER WRAP
STK IDX 12900 13000 13500 13650 13750 Opening Inventory
CPI 100 101 104 105 106 Fresh Purchases 25,600 23,200 1,920,000 1,160,000
IIP 100 102 104 106 108 Consumption 25,600 23,200 1,920,000 1,160,000
Closing Inventory
CIBOR/PLR (%pa) 10.0 10.0 10.0 10.0 10.0
WtAvg Proc Price pu 75.00 50.00
WAvg Cons Price pu 75.00 50.00
Actual Or Forecasted Demand for the Domestic Sector; Export, Tenders etc is extra and as given in Gz, emails
(in Units)
Qrtr-> 0 1 2 3 4
Product Messages
PALM 58,000 60,800 63,360 67,900
MILLI 43,500 44,800 45,760
STICK 29,000 32,000 35,200
BONE 14,500 22,400 31,680 40,740

Page 9
 0
Sector AIMA
Update Issued at the end of Quarter No: Team No:
A0
Company Name Team 0 Team 1 Team 2 Team 3 Team 4 Team 5 Team 6 Team 7 Team 8 Team 9
Plant Capacity (for next qtr) 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Machine Capacity (for next qtr) 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Plant Capacity thru Productivity Gains
Machine Capacity thru Productivity Gains
Equity Share Price on Stk Exc 1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03

3.461 3.461 3.461 3.461 3.461 3.461 3.461 3.461 3.461 3.461
Winning Criterion (CUMPAT(000
00)
)

Key Performance Data (Information Package # 6 - Price Cu.50,000)

Average Manpower Cost 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00
Net Income Margin 0.0713 0.0713 0.0713 0.0713 0.0713 0.0713 0.0713 0.0713 0.0713 0.0713
Debt to Equity Ratio
Current Ratio *****.** *****.** *****.** *****.** *****.** *****.** *****.** *****.** *****.** *****.**
Earnings Per Share 0.0494 0.0494 0.0494 0.0494 0.0494 0.0494 0.0494 0.0494 0.0494 0.0494
Return on Equity 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471
Return on Investment 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471 0.0471
Collection in Curr Qtr/Sales 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Efficiency and Activity Ratios ((Information Package # 7 - Price Cu.40,000)

Prod Dev /Sales
S & D & Info Pack Cost/Sales 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
Material Cost/Sales 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63
Financial Cost/Sales
Days Sales Outstanding
FG Inventory Holding Days
Sales/Total Assets 0.66 0.66 0.66 0.66 0.66 0.66 0.66 0.66 0.66 0.66

Market Share Data (Information Package # 8 - Price Cu.125,000)

PALM Market Share % units 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Avg Price / Unit 475 475 475 475 475 475 475 475 475 475
Sale/Ord Enq 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

MILLI Market Share % units 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Avg Price / Unit 425 425 425 425 425 425 425 425 425 425
Sale/Ord Enq 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

STICK 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Avg Price / Unit 300 300 300 300 300 300 300 300 300 300
Sale/Ord Enq 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

BONE
Avg Price / Unit
Sale/Ord Enq

Market Share (Rs Sales) 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

Contract Sales (no charge)

Price Quotation
PALM
Qty Awarded
Price Quotation
MILLI Qty Awarded
Price Quotation
STICK Qty Awarded
Price Quotation
BONE Qty Awarded

Industry Wide Inventory Levels (Information Package # 9

PALM - Price Cu.25,000)

MILLI
STICK WAFER
BONE WRAPA

Asset List (no Charge)

Plant # 1
Capacity (units) 15000
Remaining Life (qtrs) 9

Machine # 1
Capacity (units) 15000
Remaining Life (qtrs) 9
Page 10
Abridged Balance Sheet and Income Statement at the end of Quarter 0 Group A 6
(Information Package # 10 Price Cu.125,000) TEAM 0 TEAM 1 TEAM 2 TEAM 3 TEAM 7 TEAM 8 TEAM 9
TEAM 4 TEAM 5 TEAM 6
Balance Sheet All Figures are in Cu 000)
Equity Share Capital 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000
Preference Share Cap
Reserves and Surplus 346 346 346 346 346 346 346 346 346 346
Total Long Term Liab
Total Sources 7,346 7,346 7,346 7,346 7,346 7,346 7,346 7,346 7,346 7,346
Total Fixed Assets 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400
Total Investments
Receivables
RM+FG Inventory
Cash In Hand 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946
Account Payables
Bank Overdraft
Maturing Term Loans
Maturing Bonds
Shark Loans
Net Current Assets 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946
Total Application 7,346 7,346 7,346 7,346 7,346 7,346 7,346 7,346 7,346 7,346

Income Statement All Figures are in Cu 000)

Sales 4,855 4,855 4,855 4,855 4,855 4,855 4,855 4,855 4,855 4,855
Other Income
Opening Inventory
Production Cost 3,512 3,512 3,512 3,512 3,512 3,512 3,512 3,512 3,512 3,512
Goods Available for 3,512 3,512 3,512 3,512 3,512 3,512 3,512 3,512 3,512 3,512
FG Closing Inventory
Gross Profit 1,343 1,343 1,343 1,343 1,343 1,343 1,343 1,343 1,343 1,343
Bad Debts
S & D Expenses 249 249 249 249 249 249 249 249 249 249
R & D Expenses
MR Expenses
Total Financial Expe
Income Tax 148 148 148 148 148 148 148 148 148 148
Equity Dividend
Preference Dividend
Transfer to R & S 346 346 346 346 346 346 346 346 346 346

Page 11

06/15/13
 STARTING CONDITIONS
RAW MATERIAL COSTS (Consumption of Raw Material for one unit of Product)
WAFER WRAP
PALM 3 2
MILLI 2 2
STICK 1 2
BONE 1 2
Raw Material Costs Per Unit Cu 75 Cu 50
Spot Rates Cu 100 Cu 75
Constraint on Purchase of Raw Material + or - 50% of previous quarter
Cash Outflow will be 100% in the same Quarter

WAREHOUSING COST CU 1 Per Unit

Warehousing cost on Raw Material & Finished Goods Inventory at the end of the Qtr.
Cash Outflow will be 100% in same Qtr.

MANPOWER COST (LABOUR COST) CU 20 Per Unit

Cash Outflow will be 100% in same Qtr.

PRODCUTION OVERHEADS CU 2,00,000 Per Qtr.

Cash Outflow will be 100% in same Qtr.

PLANT AND MACHINERY (CAPACITY COST)

Present Plant and Machinery capacity is 15000 unit each
Cost of New Plant (CU Per Unit) Cu 200
Cost of New Machinery (CU Per Unit) Cu 200
Life of Both Plant & Machinery 10 Qtrs
Lead Time for New Plant & Machinery 1 Qtr.
Cash Outflow will be 100% in the Ordering Qtr.

MARKETING DATA
Fixed Advertisement, Branding, Distribution & Marketing Cost Per Qtr. Cu 2,00,000
Co-Branding, Incentives to Dealers Per Qtr. (on Sales Rev.) on each product 1%
Cash Outflow for Advertisement & Incentive will be 100% in same Qtr.
Cash Collection of Sales is 100% in same Qtr.

INFORMATION PACKAGE COST

Information No. Description Cost in CU
6 Key Performance Data 50000
7 Efficiency and Activity Ratios 40000
8 Market Share Data 125000
9 Industry Wide Inventory Levels 25000
10 Comparative Financial Statements 125000
Cash Outflow in respect of Information Packages will be 100% in the same Qtr.

FINANCIAL COSTS AND DATA

Maximum Permissible Debt to Equity Ratio 0.4
Maximum Overdraft Limit Cu 486,000
Loan Processing Chagres in CU Cu 25,000
Interest on Three Year Term Loan 3.25%-4.75% above PLR
Interest on Two Year Term Loan 2.25%-3.75% above PLR
Interest on Bank O.D. 3.25%-4.75% above PLR
Minimum Cash Balance to be Maintained at End of Quarter in CU Cu 500,000
Shark Loan Interest (annual): Number of times PLR 4
Interest on Short Term Investment 2% above PLR
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Corporate Income Tax Rate 30%
Face Value of Equity Share (in CU) Cu 1
CHANAKYA Group Date of Play

Business Decision Game Team No. Quarter No. Trial Quarter

Submission @
MPX- MOBILE MUSIC INDUSTRY
Decisions Names of Finished Products

Palm Milli Stick

Total Production (units)

Retail Selling Price (Cu.)

Total Purchase of Wafer (units)

Total Purchase of Wrap (units)

CEO's Signature____________________
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