SIMULATION REPORT $2,$ PEX $2$: DEVELOP A STRATEGY AND GENERATE A REPORT

Part $1.$ Develop a Strategy Scorecard and Run Simulation

Balanced scorecards allow firms to adopt a broader set of performance measures in $4$ areas: financial,

customer, business process, and learning and growth. In each area you should select variables and set

strategic objectives for those variables to measure your performance.

Develop strategic objectives for People Express. Pick appropriate performance measures, set targets,

and come up with policies $($i$.$e$.$ business decisions$)$ to achieve the targets. Using your strategy, run the

People Express simulation for $10$ years. The goal is to achieve the best performance in all areas of the

balanced scorecard. Essentially you want to:

$$ Use whatever strategy you come up with to survive $10$ years

$$ Optimize all the performance indicators

$$ Collect up what your plan was, what happened, how and why you finally succeeded!

Here is an example of a Balanced Scorecard entry. You should have two for each area, for a total of $8.$

Business Process $1$ Plane Acquisition Process

Objective: Grow rapidly to be known as one of the major airlines in the country

Performance Measure: Fleet size

Target: Grow the company to $200$ aircraft by the end of year $10.$

Policy: Purchase $20$ aircraft per year for $10$ years. $($Notice that this policy is detailed enough to

guide your decision$-$making$)$

Download the data from the $$user decisions table$$ and $$all public variables$$ table into an Excel

workbook $(2$ tabs$)$ after you are satisfied with your performance. Save the file and include it in the

assignment drop box. From this you can develop the charts you want to use in the report.

Part $2.$ Develop and Submit a Report

Write a report $($approximately $4$ pages$)$ on your strategy and its outcomes. Your cover page and the

Appendices don$$t count as pages in the page count. The BSC entries and the analysis do$.$ Use the

balanced scorecard approach to describe your strategy in relation to your key simulation decisions.

Highlight your main results and unintended outcomes of your strategies. Focus on analysis. Describe

how your strategy is better than Don Burr$$s$.$

Suggested Formatting: $12$pt Arial, $1-$inch margin all around, single spaced. Some students have

expressed they prefer to follow a report format specification rather than come up with a professional

layout on their own, so I provide this suggested formatting.

Here is an outline of the report.

$$ Cover page $-$ include your team # and author$$s name.

$$ Part $1.$ List all your BSC entries $($see above$),$ you should have two for each area or a total of $8.$

o Financial $1$

o Financial $2$

o Customer $1$

o Customer $2$

o Business Process $1$

o Business Process $2$

o Learning and Growth $1$

o Learning and Growth $2$

$$ Part $2.$ Your analysis goes here. Do it by BSC area of which there are $4.$

o Financial Analysis: discuss the two BSC entries here.

o Customer: discuss the two BSC entries here.

o Business Process: discuss the two BSC entries here.

o Learning and Growth: discuss the two BSC entries here.

$$ Appendix $1,$ include charts generated from the $5$ decision variables.

$$ Appendix $2,$ include charts showing results of your strategy. They should include the following

information:

$1.$ Fleet Size $($Total number of aircrafts you have$)$

$2.$ Revenues $($$million$/$Year$)$

$3.$ Load Factor $(\%)$

$4.$ Net Income $($$million$/$Year$)$

$5.$ Employees per Aircraft

$6.$ Stock Price $($$$/$share$)$

$7.$ Reported Service Quality

$8.$ Ratio of Peoples Fare to Average Competitor Fare $($$$/$Seat Miles$)$

$9.$ Additional variables that are important for your own strategy