ARCHIVES: Quarter 1 Year 2018


1. The results published this weekend for Quarter 1, 2018 are the first NON-trial decisions and contracts of the term. The history generated by these decisions will now be cumulative. Therefore, any "current" numbers listed in your decision menus are real and your firm must remember to set all change variables to ZERO to maintain "Current" values. Stock Issue, Long Term Loans, Plant Capacity, sales rep Salary and Commissions must be set to zero to maintain existing numbers. If you want to increase, enter the amount by which you want to increase or (-) to decrease current numbers.


2. If you hired trainees in Quarter 1, 2018, do not forget to place them as sales reps in Quarter 2, 2018. To place a trainee as a sales rep, enter the NEW TOTAL number of sales reps in the area to which you are placing the sales rep (number of sales reps ending Quarter 1, 2018 PLUS any new trainees being placed in that area). Enter a zero into the trainees decision to prevent hiring additional trainees. If you enter a negative value you will fire these sales reps and trainees.


3. Remember that you do NOT need to negotiate a contract with Peacock (Advanced Firm 18). For the first two quarters of the simulation, Peacock will supply your firm with finished goods in any quantity without first negotiating the contract. Any firm other than Peacock must first have agreed to the terms of the contract before it can be submitted to the database. Also note that Peacock does not sell raw materials or plant capacity. To purchase raw materials use the "Raw Materials" decision form. To begin construction on a manufacturing plant, use the "Capacity" decision menu.


4. To access the chat room/message board forum, please request the general forum password from your simulation administrator, Kristi. Kristi will send you the general forum password that will allow you to enter the platform. You may then register for an individual firm account with the forum to post messages or enter the chat room. The chat room/message board forum is how your simulation administrator Kristi will make special announcements mid-week, so it is important that all firms have an account set up.


5. Remember the importance of Quality Control (QC) in the Scent Industry. In the Scent Industry, QC is as important to branding a product as advertising, pricing, and sales reps. Enter the QC as a total budget with a percentage of the budget to be directed to Product 2. To ensure a consistent level of quality from quarter to quarter, be sure to BASE you budget on a per unit value (new purchases, units produced during the quarter, and any units still in inventory from previous quarters).


6. To request a Special Report, please contact your simulation administrator, Kristi. The Special Report contains additional reporting data on all firms within a given market group (ROI, ROE, Current Ratio, Production Efficiency Factor, Average Compensation, and more). The report is updated each quarter with new data and we do not archive old reports, so please request the special report for a given quarter before the following quarter's deadline, or the report may not be available. There is a $2000 simulation dollar fee for each report, billed as a miscellaneous expense in the following quarter.




The EU unemployment data indicates that the recovery has finally reached lower income workers, especially in depressed areas of Greece and Spain.  This is especially true in the tourism sector.  Housing markets throughout the EU have increased demand and prices are slowly accelerating upward.


GDP increased about 1% for the quarter.  Economists and central banks see the slower rate of growth as good news.  A 4% annual rate can be maintained with a minimum of inflationary pressures.  Some point to the rate and suggest the tighter monetary policy is working.  Other economists suggest the rate is simply ‘the calm before the storm’.  They say the slower rate is an anomaly and probably due to bad weather during the holiday season and the realignment of consumer needs and wants with their now increasing levels of income.  T-bill rates rose as did corresponding rates in the EU.  The coordination of NAFTA/EU monetary policy have kept exchange rate movements in a narrow range.


NAFTA unemployment data shows continual quarter-to-quarter improvement.  Canada’s personal income levels are increasing at a faster rate than in the United States.  Some suggest the rapid increase is due to their growing export in the energy sector, mainly oil, gas and electricity.  Also, increased tax revenues are being invested in infrastructure, both new and refurbished.


U.S. corporate tax rates were left at current levels as Congress focuses a major tax overhaul on personal incomes.


Japan had a marked improvement in GDP growth during 2017. 


China reported upper-end consumers are favoring foreign made products over Chinese equivalents as seen in a host of products from autos to perfume.  While exports are much larger than imports, the government voiced concern about the trend.



Demand for scents has increased 40% since Q1, 2016 (with the exclusion of P2 in the EU).  This has been a remarkable period of recovery.  Higher demand has also led to higher prices, and in most firms, growing profits.  The year 2018, according to industry analysts, should see a strong, but more moderate rate of growth.  They anticipate higher profits on average throughout the industry, but warn that individual firms may falter as they attempt to preserve market share and profitability as they face ever increasing cost pressures.  Firms need to pass costs on to their customers. However, it should be accomplished within a strategy, not as a knee-jerk reaction to external cost pressures.




Peacock Prices

P1 = $56 per unit

P2 = $99 per unit


*Remember that Peacock does NOT sell raw materials or plant hours. To purchase raw materials, use the "Raw Materials" decision form. These materials must be ordered one quarter in advance of using them in production. These will always be your cheapest source of raw materials.


To order plant hours, use the "Capacity" decision form to order stage 1 and stage 2 plant hours in the area or areas of your choice.




	Stock No.    NPV    Index  
                31        1.47      1   
                35        0.70      2   
                32        0.52      3   
                21        0.44      4   
                55        0.28      5   
                44        0.25      6   
                25        0.24      7   
                54        0.18      8   
                22        0.17      9   
                23        0.15     10   
                41        0.15     11   
                53        0.12     12   
                33        0.11     13   
                43        0.07     14   
                52        0.01     15   
                34        0.01     16   
                24       -0.15     17   
                45       -0.36     18   
                51       -0.39     19   
                42       -1.05     20 
Number   D  a  t  e  s
        20174  20181 
=====  =====  =====  
   21    3.83   3.98 
   22    2.91   3.23 
   23    2.76   3.06 
   24    2.42   2.38 
   25    2.90   3.30 
   31    3.96   5.70 
   32    2.72   3.40 
   33    2.59   2.83 
   34    2.62   2.76 
   35    4.02   4.96 
   41    2.41   2.69 
   42    4.28   3.39 
   43    2.39   2.58 
   44    2.66   2.96 
   45    2.46   2.21 
   51    3.88   3.66 
   52    3.31   3.49 
   53    2.99   3.27 
   54    3.01   3.35 
   55    3.25   3.71 

  Mkt    3.07   3.35 
TBill  0.0200 0.0025 

          Stock        Shares        Closing                 
         Number        Traded         Price           Change 
         ======      ========        =======         ========
            21              0          3.98            0.15  
            22              0          3.23            0.32  
            23              0          3.06            0.30  
            24              0          2.38           -0.04  
            25              0          3.30            0.40  
            31              0          5.70            1.74  
            32              0          3.40            0.68  
            33              0          2.83            0.24  
            34              0          2.76            0.14  
            35              0          4.96            0.94  
            41              0          2.69            0.28  
            42              0          3.39           -0.89  
            43              0          2.58            0.19  
            44              0          2.96            0.30  
            45              0          2.21           -0.25  
            51              0          3.66           -0.22  
            52              0          3.49            0.18  
            53              0          3.27            0.28  
            54              0          3.35            0.34  
            55              0          3.71            0.46  

           Mkt              0          3.35            0.28