in our recent input on mathematics in business, Richard set us an apprentice style business simulation to demonstrate the mathematics in demand planning. As someone who watches the apprentice religiously every week, I was extremely excited at the opportunity to pretend I was one of the candidates trying to impress Lord Sugar (well in this case Richard) and on reflection I maybe took it a little too serious. After lots of deliberation Me and Gillian came up with Team Sparkle (because who doesn’t love sparkles?).
The Rules:
- Each team started with £5000
- The year was split into 4 quarters and we could only order 5 different
- products per sales period (each quarter).
- Any stock left from one sales period could be taken over to the next quarter (except items such as milk and bread which go off very quickly.)
April-May-June
When deciding initially what to order for the first quarter we had to consider a few different things. First, we considered what would be popular at this time of year, so straight away obviously ruling out any Christmas themed products- because who really buys a selection box in June? We then considered which produced appeared to make a higher profit, we were initially drawn to the champagne which are sold for double the price we would pay, as well as the beans sold for 8x more than we would pay!!! Along with these we decided to chose products which we knew sell consistently and regularly.
As you can see from the image above, all the products we chose to purchased sold reasonable well and managed to make us a reasonable profit, doubling our original £5000. To work out the money we made we had to do a series of mathematical calculations. First we had to work out how many of the units we ordered that were actually sold, by multiplying the quantity ordered by the percentage sold. Then to work out the sales value generated we had to then multiply the units sold by the selling cost. Finally, we had to work out the amount of units of remaining stock which could be carried over.
By calculating the total of our sales values and adding on the money we had left in the bank, at the end of the 1st quarter we had £10,040.
July- August-September
Again, we considered which items would sell best during these summer months again whilst making us more the most profit, we decided to order more champagne, bread and milk but this time adding on beer and soft drinks.
Again all of our products sold well with 100% of beers selling, and 90% of both the champagne and soft drink flying off the shelf. Again, by doing the calculations we were able to work out we now had £18,380 and a small amount of stock to carry over, almost doubling our money since the last quarter.
October- November- December
When we got to this quarter, we obviously had to consider that Christmas would be in this sales period meaning we could finally spend some of our money on selection boxes!! We decided to spend a large amount of money on more champagne as everyone enjoys a glass or two at Christmas, and for those who aren’t champagne fans we purchased 3,000 beers. We only purchased 500 of the frozen turkeys because although we knew these would sell, they were not going to make too much profit so we decided not to spend too much on these (potentially a risky move).
This round was very successful, with 100% of the selection boxes, champagne, turkeys and luxury hampers all selling. We were left with very little extra stock and we calculated our takings went up from 18,000 to 35,950. On reflection we probably could have purchased more high profit products such as the hampers or even more beans as 90% of them sold with the selling price still at 8x the purchase price.
January- February- March
In the last 3 months, we clocked on to the fact beans had sold consistently well through every sales period and with a consy. In this quarter the selling price for beans was 10x the purchase price!!! So we knew the key to success here was buying a lot of beans. We also decided to purchase more of the lower priced items such as milk and bread as Christmas always leaves the bank account looking bleak, so January may be a month of only beans on toast for breakfast lunch and dinner.
This month saw our earning increase majorly, with everything we had purchased selling reasonably well. 100% of beans sold meaning from the £5,000 we spent on them this brought in £50,000. In total we managed to take our starting figure from £5,000 up to £98,000, which to be honest I was very impressed with. I’m sure Alan Sugar would disagree.
Beans, beans, beans.
After completing the task and discussing our tactics with rest of the groups, we came to the conclusion that way to earn the most money throughout the game would literally be to only buy huge amounts of beans. Due to its consistently high percentage sales in each quarter and the massive increase from purchase price to selling price, if we had only spent our money on buying beans alone our earnings could have been way into the hundreds of thousands. Despite the months which it didn’t sell as well, any leftover stock would carry over to the final quarter due to large shelf life and would ultimately leave you with massive profits. If I was to do this over again, I would definitely put all my focus on beans. This maybe would have made profits that Lord Sugar would be more impressed with.
Throughout this business simulation we used various different mathematical strategies, most of which were basic concepts such as addition, subtraction and multiplication. Although this activity used basic fundamental mathematics, it also required a deeper level of understanding to be able to understand the processes and why the mathematics was being used. I think this would be a great activity to bring into the classroom. As it is based on basic maths processes, it could be easily made simpler or even harder by changing the amount of money that you begin with or the number of products you are allowed to purchase in each quarter. This would be a great way to show pupils a real-life application of mathematics, and encouraging them to develop problem solving skills and think critically. I thoroughly enjoyed the activity and I feel like it would be a fun and engaging way to explore maths with a class, because who doesn’t love the idea of making lots of money.
