ICE CREAM is a business simulation that demonstrates the importance of management decision-making in the context of a competitive retail situation. These decisions cover the areas of purchase and allocation of stock, promotion, selling, finance and planning.
ICE CREAM is an interactive computer model, which has been developed by Andy Clayton of Challenge Training Partners to provide a stimulating simulation for use in shorter events. Significant features of the model are its realism with regard to: the product being sold, the location of the businesses and the magnitude of the amounts of money involved. The concept of a retail ice cream business located in a typical British seaside resort was chosen as one that is instantly recognisable by all.
A salient feature of ICE CREAM is the model's response to individual company decisions and actions and, in particular, to the weather during each "week" of the simulation. All these affect not only individual companies, but all interact to affect the performance of all the companies and the ice cream market as a whole.
In the model a team of young entrepreneurs has decided to run three ice cream stalls during their long summer vacation from university. The team buys its ice cream from a wholesaler/manufacturer and sells it through specialist stalls/vans, which it rents. Their business is very cash orientated. Ice cream and stall rental etc. are paid for up front at the beginning of each week. The team has to pay themselves the minimum wage each week. There is the stret trading licence to provide for etc.
Normally each company (team) is in competition with 5 other similar companies for the available market. Typically the teams will run their companies for between 5 and 7 "weeks" in a one to one and a half day event.
Objective
Each company tries to make the most profit; by achieving good prices for its ice cream; by matching supply and demand; and by quantifying the effect of weather upon ice cream sales both overall and at the different stall locations. The most successful company is deemed to be the one that has made the highest profit and which has paid of its initial loan in a timely fashion.
To win, a company must have its business still in a viable state, with sufficient stock to continue trading.
Decision-making
Each company makes its decisions each "week" by filling in a decision-form. Depending upon the situation this will either be either completed by hand or electronically. During the time allotted for the decision the companies may send a representative to the simulation manager for their market to seek advice or negotiate terms.
The results of the companies' decisions are returned at the beginning of the next "week" on a single, readily understandable sheet. Results include sales information, cash flow, costs incurred and profit made.
Messages giving the next week's weather forecast, invitations to tender for the bulk supply of ice cream, important Health and Safety issues etc. are issued. It is important that the teams look out for these. Every team is given a brief, but detailed manual, which includes help and advice on the decision-making process and the associated rules.
The Simulation Managers
A very important role in ICE CREAM is played by the Simulation Managers. Typically this team will be formed of either designated students or staff from the schools or colleges involved. Whilst being members of the overall team responsible for the efficient operation of the simulation, the Simulation Managers have specific responsibility for a market of 6 companies. The Simulation Managers have three roles: