Mintendo Game Girls - Case Study



1. Which option delivers the maximum profit for the supply chain: Sandra's plan, Bill's plan, or no promotion plan at all?

For the supply chain management decision, we need to evaluate the proposals submitted by both Bill and Sandra and as well gauge the impact of no promotion on the profitability of the company. For this reason, through analysis was done on the proposal and based on certain models (refer to excel sheet for detailed calculations) and profitability was calculated based on the demand forecasts. These demand forecasts were based on the variables that were highlighted in both the proposals; Sandra was mainly concerned with controlling costs and she proposed that price be lowered by $5 for the month of September while Bill thought of bringing the same promotion in the month of November.

Sandra's idea would increase the demand by 50 percent due to the promotional offer and the resulting demand forecasts would be;

Demand (Sandra's Idea)

Month

Demand Forecast

July

100,000

August

110,000

September

324,000

October

126,000

November

175,000

December

300,000

Based on the demand forecast, there were certain variables taken into consideration to determine the total costs of the sales and obtain profitability values. The detailed computations are given in the attached excel sheet. A precise income statement of Sandra's proposal is given below;

Total Cost =

$ 17,184,437.50

Total revenue =

$ 56,750,000.00

Profit = $ 39,565,562.50

Bill's idea also resulted in a shift in the demand for that particular interim. The demand for the quarter as per the proposed plan is given below;

Demand (Bill's Idea)

Month

Demand Forecast

July

100,000

August

110,000

September

130,000

October

180,000

November

465,000

December

210,000

After the demand forecast, all the relevant variables were taken into consideration to determine the total costs and profitability was obtained based on the sales and revenue figures. The detailed computations are given in the attached excel sheet. A precise income statement of Bill's proposal is given below;

Total Cost =

$ 19,032,410.68

Total revenue =

$ 59,750,000.00

Profit = $ 40,717,589.32

The profitability figure of the November promotion plan as proposed by Bill is greater and so far, Bill's idea proves to be fruitful for the company. Yet, there still remain a third step to reach to a decision and strategize accordingly. The next step was followed by going through the same computation with no promotion at all, this step would give significant input to guide the decision making process.

No ...