( G6 ) BIZPRICING

The Department of Health & Nutrition of the Government of India has 2 suppliers from each region North, East, West & South registered as vendors for its re uirements of !nti"iotic In#ections for the ne$t %ear&

'& The in#ections are ordered and supplied in ("ottles) * each "ottle constitutes one month)s re uirement for treating one patient suffering from +idne% infection& The Department is e$pected to purchase a"out ,-,--,--- "ottles ne$t %ear& The purchases are made "et.een /anuar% and /une each %ear& 2& The suppliers are re uested to participate in 0idding process each month for suppl% of in#ection "ottles& a. The quantiity to be supplied in multiples of !""" bottles. b. The Bid P#i$e to be quoted in No#th! %outh! &ast and 'est (ones is in the #an)e * to +, m.u. pe# bottle.( in multiples of ) 1& The 2edical 3entre, on receiving the uotations, purchases its re uirements in such a .a% that its total cost is minimi4ed& ,& To start the game, on 'st /anuar%, each compan% ta+es decisions on * a& 5roduction level for /anuar%& "& 5rices to "e uoted in each of the four 4ones for /anuar% suppl% and conve%s the decisions& 6nce made, the decisions cannot "e changed& 7& !t the end of 'st .ee+ of /anuar%, the 3ompan% receives the information regarding the order for each 4one& The product is to "e dispatched immediatel% on receiving the order& Then the 3ompan% ta+es decisions 8as in point no& , a"ove9 for :e"ruar% and this process is repeated to cover the production of /anuar% to /une& The openin) sto$- fo# .anua#y is ( in """/ bottles ) +" fo# No#th! fo# &ast! + fo# 'est 0 +" fo# %outh& ;& The government is li+el% to change suppliers for ne$t %ear & <& Distri"ution cost= The uotation of 2edical 3entre should "e inclusive of the follo.ing distri"ution cost= a& 7 m&u& per "ottle in the 4one the supplier is situated& "& '- m&u& per "ottle in other 4ones&

12' T2 P345 G46&.

&a$h team 7ill sele$t 0 #ep#esent one #e)ion 7ith , teams fo# ea$h of 8 #e)ions&The% .ill ma+e decisions of 5roduction uantit% & 5rices to "e uoted for each region for /anuar%&The 2oderator .ill give order in units to each team for each region& 3omplete the data sheet 8 in E>3E? if possi"le 9 & find Gross 5rofit& The 7inne# 7ill be based on )#oss p#ofit less $losin) sto$- 9alue. @& 5ast purchase data * 5urchase of 2edical 3entre in the last t.o %ears have "een as follo.s= :i)u#es in ;"""; bottles 2-'1 2onth /an :e" 2arch !pril 2a% /une Total North <'2';'2'2''<-South '7'-'-'2'''2<-East '2'2'-'2'2'2<-West <'2'7'2'2'2<-Total ,',;7',@,A,72@-North ,@'2@'-@7-2-'2 South '2;@@@@7-East @'-@@'-;7-West ;'-'-@@@7-Total 1-1,1@121;1-2---

A& 5roduction capacit%= The normal capacit% gives a monthl% production of @-,--"ottles& Wor+ing overtime increases the production capacit% up to '2-,--"ottles& !n% change in production level .ill attract e$tra cost of '- m&u& per "ottle& In addition there .ill "e additional overheads for e$ceeding the normal capacit% to e$tent of ,----- m&u& per month& The change in production should "e in multiples of '---- units& The direct cost 8ra. material, pac+aging materials and direct la"our9 .ill "e 1- m&u& per "ottle& '-& Through special efforts, it has "een possi"le to get assured and prompt deliveries of ra. materials and pac+aging materials and there .ill "e no month end inventor% 8and conse uentl% no inventor% cost9 for ra. materials and pac+aging materials& Thus, the overheads .ill consist of a& :i$ed 6verheads= 2,,--,--- m&u& per month&

"& Inventor% holding cost of finished product depending on closing stoc+ B , m&u& per "ottle per month& c& 3hange in production level premium= Depending on production '- m&u& per "ottle & d& !dditional overheads for e$ceeding normal capacit% = ,,--,--- m&u& per month &