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Purdue Agribusiness Management

Simulation

Version 2009

Updated 11/20/09

Jay Akridge, David Barber, Freddie Barnard,

Liza Braunlich, Rejeana Gvillo, Lisa House,

and John Howell

Copyright 2009, Purdue Foundation, West Lafayette, Indiana 47907. All rights reserved. Unless permission is

granted, this material shall not be copied, reproduced or coded for reproduction by any electrical, mechanical or

chemical process or combination thereof, now known or later developed.

1

PURDUE AGRIBUSINESS MANAGEMENT SIMULATIONa/

ABOUT MANAGEMENT SIMULATIONS

Management decision simulations, like the Purdue Agribusiness Management Simulation, are

primarily training tools. This simulation attempts to duplicate the environment in which farm

supply businesses must operate, but it cannot begin to duplicate all the complexities of the real

world. Each business environment in real life is unique -- cost structures, customers' response to

prices, effectiveness of different marketing approaches, and the like vary from one firm to

another.

Managers must take into account many factors when making a decision. For example,

available storage space, inventory, anticipated sales in view of the price policies of the firm and

of competitors, and other factors must be considered in deciding how much fertilizer to order.

Decision exercises made through a vehicle like this simulation are useful in that they can portray

this complex of interrelationships. They allow managers to gain experience in using business

planning, analytical tools and economic and accounting principles. There are definite

relationships among the decisions made by the participants and the results of the simulation.

Some of these relationships will be described here and some must be inferred.

It is important to approach decision-making in the simulation just as you would if you were

taking over a new business that you knew little about. Responses to price changes, advertising,

credit policies, etc. might be similar to those of businesses with which you are familiar.

However, just as in a real business situation, you will need to develop an understanding of the

customers and the competitors in the simulation market (not some outside market) to be

successful.

SITUATION

In this simulation, from two to six farm supply stores will compete with one another in a

rural market. The farm supply business you are to manage sells four products to farmers:

complete feed, concentrate feed, commercial grade fertilizer, and custom blended fertilizer. A

history of feed and fertilizer sales for the most recent three-year period is illustrated in Table 1.

All participants will assume that these sales represent their sales history. Future sales will be

affected by the normal growth or contraction for the market as a whole; however, such growth or

contraction will not be smooth. Growth or contraction in sales will probably be subject to

random fluctuations in livestock raised and type and acreage of crops grown.

a/ The assistance of L.M. Eisgruber, Emerson Babb, and Steven Erickson on an earlier version of this game is

gratefully acknowledged.

2

In addition to changes in sales resulting from the state of agricultural production in the area, sales

will be substantially changed by the decisions that participants make. For example, if prices are

raised relative to the prices of competitors, sales (and market share) will decline. Any change in

the distribution of sales between complete and concentrate feed or between commercial grade

and custom blended fertilizer among quarters will occur at a slow rate.

The financial results and market position of the farm supply store you are to manage have

been steadily deteriorating. For this reason, the owners of the business have hired your

management team to improve the store's operation. Your team has complete authority to adopt

whatever policies it considers necessary. Each management team is identified with a store

number and name and will start on an equal basis. That is, all teams will start with the same

assets, liabilities, inventories, and the like.

Table 1. History of Feed and Fertilizer Sales for the Farm Supply Business in the Most Recent Three

Years

Period

Complete

Feed

Concentrate

Feed

Commercial

Grade

Fertilizer

Custom

Blend

Fertilizer

(tons)

Three Years Ago

Jan-Mar 1,088 663 348 336

Apr-Jun 1,082 279 1,458 1,605

Jul-Sep 1,057 274 289 409

Oct-Dec 1,197 535 391 557

Total 4,424 1,751 2,486 2,907

Two Years Ago

Jan-Mar 1,192 712 330 364

Apr-Jun 1,192 314 1,411 1,706

Jul-Sep 1,155 309 271 431

Oct-Dec 1,307 563 410 613

Total 4,846 1,898 2,422 3,114

Last Year

Jan-Mar 1,295 767 305 396

Apr-Jun 1,287 339 1,355 1,802

Jul-Sep 1,258 334 258 448

Oct-Dec 1,402 590 436 659

Total 5,242 2,030 2,354 3,305

3

Attachment 1 shows decisions made by the previous manager for the past quarter. These

decisions are typical of those made in past quarters and reflect historic price differentials.

Attachments 2 through 5 present the financial results for the previous management team

during their last quarter of management. These attachments present the results of the decisions

shown on Attachment 1.

Attachment 2 is your income statement. It shows sales, margin, and expense data for the

current quarter on a total dollars, dollars/ton, and a percent of sales basis. The last column of the

income statement illustrates the results for the previous 12 months.

Attachment 3 contains your balance sheet, some key financial ratios, data on sales in tons,

unfilled orders, and inventory. In addition, information on the utilization of facilities, trucks, and

labor is shown on this page.

Attachment 4 is a cash flow statement. This statement will show you the amount of cash

generated over the quarter and how your cash was used during the quarter. It will also tell you

how much money you have available to invest or pay down loans.

Attachment 5 is your market share report. This report shows you what other teams were

charging for their products and also outlines the price limits for next quarter. Your prices must

be within the range shown by the price limits. Data on advertising outlays, sales by product line

(tons), and market share by product line is also illustrated on this page.

The data in Attachments 2-5 are the results of the decisions shown in Attachment 1 and

reflect the position from which all teams will start as they assume management effective the first

quarter of the new year Each team records its decisions for each quarter on the blank

decision forms provided by the simulation administrator. Forms are also provided for the team

to keep a record of past decisions, expected results and actual results (Attachments 6, 7, and 8).

These records may assist your team in determining relationships in the simulation, the

competitive environment, and should be used as a means to track progress of your team.

DECISIONS AND RULES

1. The price you charge customers for each of the four products must not be more than

$4.00 above or below the market average price for each product. Market average

prices for the last quarter are given in the results and are used as the base for the

$4.00 limit in the current quarter. The average market prices at the beginning of the

simulation are also provided in Table 2.

4

Table 2. Product and Wholesale Prices at the Beginning of the Simulation

2. Sales respond positively to price reductions; however, the response of sales to price

changes varies among products.

3. Changes in the price differential between complete and concentrate feeds and commercial

and custom blended fertilizers will result in shifts of sales between product lines.

Orders

1. All feed and fertilizer ordered is delivered in time to meet sales for the current quarter.

2. If the quantity ordered plus inventory is insufficient to meet current sales demand, the

excess sales are considered unfilled orders. If you select YES on the decision form, your

firm can recover a portion of lost sales. The charge for emergency orders to fill unfilled

orders is a 10% surcharge over wholesale prices. Wholesale prices at the beginning of

the simulation are reported on the market share report (Attachment 5) and in Table 2.

Some portion of your unfilled orders will remain lost as some customers may choose not

to wait. Unfilled orders are reported to you on the balance sheet page (Attachment 3).

Unfilled orders are lost orders, not demand that will continue into the next period. Any

product not sold in the current quarter is carried over to the following quarter as

inventory.

3. All products cost the same for all competing stores -- no firm has any purchasing

advantage.

Item Starting Prices Wholesale Prices

Next Quarter

Complete Feed $206 $158

Concentrate Feed $315 $255

Comm Grade Fert $138 $93

Custom Blend Fert $159 $106

5

Advertising

1. Advertising expenditures are positively related to sales and affect sales of all products.

Credit

1. You will set your store’s credit policy each period. There are three different credit

policies from which to choose.

2. The election of one of these credit policies results in all sales being made subject to that

single policy for the quarter (all sales are credit sales).

3. Credit policy number 1 is a 30 day policy. Bad debt loss is low and 90 percent of credit

sales are collected during the current period and are available to meet cash obligations of

the current period. The remaining 10 percent of credit sales appear as accounts

receivable and are collected during the next quarter.

4. Credit policy number 2 is a 60 day policy with some increase in bad debt loss. About 70

percent of credit sales are collected during the current quarter and are available to meet

cash obligations of the quarter. The remaining 30 percent of credit sales are carried as

accounts receivable and collected during the next quarter.

5. Credit policy number 3 is a 90 day policy. Bad debt losses increase further and about 30

percent of credit sales are collected the current quarter with the remaining 70 percent

(less bad debt loss) is collected the following quarter.

6. Extension of the credit period has the effect of increasing sales.

Storage Capacity Expansion

1. You have facilities, including an office, scales, storage, etc., that are presently worth

(book value) $297,360. The 14,000 square feet of storage capacity you currently own

will store 3,271 tons of product.

2. Storage facilities may be expanded at a cost of $8.50 per square foot and can be used to

store any of the four products handled.

3. If storage facilities are expanded, the additional space will be available in the current

quarter and must be paid for in the current quarter.

4. Each ton of product on hand during the quarter requires 4.28 square feet of storage space.

You must have enough storage space on hand to store your beginning inventory plus your

order for the quarter. If enough space is not available, it will

6

automatically be rented at a cost of $0.75 per square foot per quarter. Only enough space

is rented to meet storage needs for the quarter.

5. Depreciation is on a 15 year basis and is the only fixed cost of storage. Variable storage

and handling costs amount to $12.50 per ton of sales.

Truck Expenditure

1. You presently own 5 trucks that have a book value of $105,000. These trucks give you

the capacity to haul 2,800 tons of product per quarter.

2. Additional trucks can be purchased at a cost of $35,000 each, are available during the

quarter purchased, and must be paid for on delivery. Any product or combination of

products can be hauled in the trucks.

3. One truck must be available for each 560 tons of product sales. If enough trucks are not

owned to meet this requirement, they are automatically rented for the required time at the

rate of $3,640 per quarter. Note that trucks are rented on an ‘as needed’ basis -- for

example, if you need an extra 280 tons of hauling capacity, the truck is only rented for

one-half the quarter (280 tons/560 tons).

4. Depreciation is on a five year schedule and is the only fixed cost for trucks. Variable

truck costs amount to $7.00 per ton of sales.

Personnel

1. Seven persons are currently employed.

2. The team has complete flexibility in hiring and firing workers. You can have full time or

part-time employees. In the decision form, you should denote the number of people you

want (a half-time person is 0.5 of a worker). Workers hired in the current quarter need

training to be as efficient as other workers hired earlier, thus carry extra expenses of

$1,000 for a full-time worker or $500 for a part-time worker. Each time you hire

additional workers, you are responsible for this training fee.

3. One worker is needed for each 466 tons of sales. If enough workers are not available, the

workers you have must work overtime to meet the requirements. You must keep at least

three workers employed at all times.

4. Regular labor costs amounts to $7,500 per quarter (per worker) and any overtime is paid

at the rate of $11,250 per quarter (per worker).

5. You as the manager will receive $12,500 per quarter for your services. The manager is

not included when figuring available labor.

7

Financing

1. The rate of interest charged on loans depends on the interest scenario; A, B, or C (shown

in Table 3). Your instructor will inform you which interest rate scenario will be used. The

interest rate scenario is selected at the start of the simulation and remains for all

sebsequent quarters.

2. If the team does not anticipate cash needs and is forced to secure a loan to meet cash

obligations, an emergency loan will be taken out at a higher rate of interest. Any

emergency loan is made for the full quarter.

Table 3. Three Interest Rate Scenarios for Loans and Investments

Regular rate of

interest for firms

with debt/equity

ratio less than 1.0

Regular rate of

interest for firms

with debt/equity

ratio 1.0 or

greater.

Emergency

loan interest

rate

Investment

interest rate

A 6% 8% 12% 3%

B 8% 11% 15% 4%

C 10% 13% 18% 6%

3. Cash outlays consist of product purchases, variable truck and facility costs, labor costs,

rentals, interest charges, advertising expenditures, truck and facility expenditures,

investments made, loans repaid, and miscellaneous expenses which amount to $2,200 per

quarter plus 80 cents per ton of sales. All of these cash outlays are made at the end of the

quarter.

4. Cash to meet obligations, at the end of the quarter, consists of cash on hand at the

beginning of the quarter, cash sales, beginning accounts receivable, interest earned on

investments, loans secured, and investments called.

5. Any loan transactions (borrowing or re-payment) occur at the beginning of the quarter.

The maximum loan repayment cannot be greater than the total amount of cash available

at the start of the quarter plus 1/2 of the account receivables balance at the end of the

previous quarter (start of current quarter) plus any investment called.

8

6. You must repay the current portion of the bank debt and any emergency loan each

quarter. If enough cash is not available to repay all of the emergency loan outstanding,

you may borrow money at the regular rate of interest to repay the emergency loan. If you

do not make arrangements to borrow money at the regular interest rate, the emergency

loan balance is rolled over into successive quarters (at the higher interest rate) until

repaid. You may repay additional (regular) debt (up to the maximum discussed above),

but this is optional. The final payment of a previous loan was paid in quarter 0. A new

10-year loan was taken out in quarter 0, with the first payment due in quarter 1. The

repayment schedule is forty equal quarterly principal payments, plus interest.

Investments

1. Excess cash can be invested so as to earn interest annually at the rate shown in Table 3.

The investment is made at the start of the quarter and cannot exceed the starting cash

balance plus 1/2 of the accounts receivable balance at the start of the quarter less any debt

re-paid.

2. Investments can be called at any time to meet cash needs.

3. If the firm does not have the cash needed to meet its obligations, investments are called in

total resulting in a loss of interest for that quarter as a penalty for poor cash planning.

SIMULATION RESULTS

The results of the decisions made will be distributed to each team in the form of a report

composed of an operating statement, a balance sheet, cash flow statement and a market share

report. These reports should be studied carefully before completing the next quarter's decision

form. The information in the reports should provide valuable insights into potential problem

areas and suggest changes to improve results.

The type of information provided each quarter is shown in Attachments 2 through 5. Cost of

goods sold is based on the weighted average value of inventory carried over and the value of

current purchases. The unfilled orders section shows sales that were lost because the particular

products were not on hand. Percentage utilization of storage, trucks, and labor is given to

indicate how close the firm is to incurring overtime, or storage or truck rental (on how much they

did incur).

The information in Attachments 2-5 are for the fourth quarter of the previous year and is the

result of the decisions shown in Attachment 1. All participants will assume management of the

firm based on the results shown in Attachments 2-5, and should therefore study these reports

carefully before completing the decision form for the next quarter.

9

Purdue Agribusiness Management Simulation: Decision Form

Market Number: __01____ Team Number: __01____ Period (1-12): ___0____

1) Price for complete feed ($/ton): $ 206.00

2) Price for concentrate feed ($/ton): $ 315.00

3) Price for commercial grade fertilizer ($/ton): $ 138.00

4) Price for custom blend fertilizer ($/ton): $ 159.00

5) Quantity of complete feed ordered (tons): 1527.00

6) Quantity of concentrate feed ordered (tons): 615.00

7) Quantity of commercial grade fertilizer ordered (tons): 631.00

8) Quantity of custom blend fertilizer ordered (tons): 659.00

9) Place emergency orders (yes/no): NO

10) Advertising expenditure ($): 1000

11) Credit Policy (1, 2, or 3): 2

12) Storage capacity expansion expenditures (tons) : 0

13) Truck purchase expenditure (# of trucks) : 0

14) Total Employees needed: 7.0

15) Borrow money ($) : $ 0

16) Repay loan ($) : $6,875

17) Call investment ($) : $ 0

18) Make investment ($) : $ 0

19) Sales forecast for complete feed (i.e. Line 5 + current inv): 1651.63

20) Sales forecast for concentrate feed (i.e. Line 6 + current inv): 639.87

21) Sales forecast for commercial blend fertilizer (i.e. 7 + current inv): 826.23

22) Sales forecast for custom blend fertilizer (i.e. 8 + current inv): 659.00

Attachment 1 Team Name: __FEED INC____

10

ATTACHMENT 2

OPERATING STATEMENT

QUARTER 0 TEAM 1

MARKET AREA 1 FEED INC

-------------------------------------------------------------------------------------

Current Quarter

SALES

DOLLARS

$/TON

PCT OF

SALES

LAST 12

MONTHS

DOLLARS

------------------- -------- ------ ------- --------

COMPLETE FEED 288812. 206.00 45.15 1077299.

CONCENTRATE FEED 185850. 315.00 29.06 638349.

COMM GRD. FERT 60168. 138.00 9.41 327046.

CUSTOM BLD FERT 104781. 159.00 16.38 524703.

TOTAL 639611. 207.19 100.00 2567397.

COST OF GOODS SOLD DOLLARS $/TON CGS PCT DOLLARS

-------------------- -------- ------ ------- --------

COMPLETE FEED 221516. 158.00 76.70 817974.


COMM GRD. FERT 40548. 93.00 67.39 220277.

CUSTOM BLD FERT 69854. 106.00 66.67 342444.

TOTAL 482368. 156.25 75.42 1897244.

GROSS MARGIN DOLLARS $/TON GM PCT DOLLARS

------------------- -------- ------ ------- --------

COMPLETE FEED 67296. 48.00 23.30 259325.


COMM GRD. FERT 19620. 45.00 32.61 106769.

CUSTOM BLD FERT 34927. 53.00 33.33 182259.

TOTAL 157243. 50.93 24.58 670153.

OPERATING EXPENSES DOLLARS $/TON % SALES DOLLARS

--------------------- -------- ------ ------- --------

STORAGE FAC - F.C. 5310. 1.72 0.83 21240.

STORAGE FAC - V.C. 38588. 12.50 6.03 161639.

STORAGE RENTAL COST 517. 0.17 0.08 4854.

TRUCK - FIXED COST 8750. 2.83 1.37 35000.

TRUCK VARIABLE COST 21609. 7.00 3.38 90517.

TRUCK RENTAL COST 1866. 0.60 0.29 14756.

MANAGERS SALARY 12500. 4.05 1.95 50000.

LABOR COST 54500. 17.65 8.52 216000.

OVERTIME LABOR COST 0. 0.00 0.00 2969

BAD DEBT LOSS 2175. 0.70 0.34 8730.

ADVERTISING EXPENSE 1000. 0.32 0.16 4000.

OTHER EXPENSES 4670. 1.51 0.73 19144.

----- ------ ------ --------

TOTAL 151483. 49.05 23.68 628846.

NET OPERATING PROFIT 5760. 1.88 0.90 41307.

OTHER INCOME 225. 0.07 0.04 675.

INTEREST EXPENSE 4022. 1.30 0.63 16642.

----- ------ ------ ------

NET PROFIT BEFORE TAX 1963. 0.65 0.31 25340.

11

ATTACHMENT 3

BALANCE SHEET

QUARTER 0 TEAM 1

MARKET AREA 1 FEED INC

---------------------------------------------------------------------------------------

CURREN

T ASSETS

DOLLARS CURRENT LIABILITIES DOLLARS

Cash 3056. Bank Note 6875.

Accounts Receivable 155643. Emergency Loan 0.

Inventory 44388.

Investments 30000. LONG TERM LIABILITIES

Bank Note 268125.

FIXED ASSETS

Trucks 105000. NET WORTH

Storage Facilities 297360. Owner’s Equity 360447.

TOTAL ASSETS 635447. LIABILITIES + NET WORTH 635447.

------------------------------------------------------------------------------

KEY RATIOS

Current Ratio 33.90 RONW (annual) 7.03

Debt/Equity Ratio 0.76 Asset Turnover (annual) 4.04

Leverage Ratio 1.76 ROA (annual) 3.99

------------------------------------------------------------------------------

Sales (Current Quarter)

Tons

Sales Dist

Unfilled

Orders

------------------------------- ---------- ------------- -----------

Complete Feed 1402.00 45.41 .00

Concentrate Feed 590.01 19.11 .00

Comm Grade Fert 436.12 14.13 .00

Custom Blend Fert 659.05 21.35 59.00

Total 3087.18 100.00 59.00

Inventory (End of Quarter) Tons Dollars

-------------------------------- --------- --------------

Complete Feed 124.63 19940.00

Concentrate Feed 24.87 6292.00

Comm Grade Fert 195.23 18156.00

Custom Blend Fert 0.00 0.00

Total 344.73 44388.00

Facilities & Equipment Labor

---------------------------- ---------------------

Storage Space Owned

Square Feet 14000.0 Labor - Nbr People Hired 7.0

Capacity - Tons 3271.0 Capacity - Tons 3262.0

Storage Utilization % 104.9 Labor Utilization % 94.6

Trucks Owned - Number 5.0

Capacity - Tons 2800.0

Truck Utilization % 110.3

12

ATTACHMENT 4

CASH FLOW STATEMENT

Period 0 Team 1

Market Area 1 FEED INC

--------------------------------------------------------------------

BEGINNING CASH 9544.00

CASH RECEIPTS

-------------

Total Sales Revenue 639611.00

Less Current Quarter Accounts Receivable -155643.00

Investment Income 225.00

Collection of Last Quarter Accounts Receivable 184172.00

------

TOTAL CASH RECEIPTS 668365.00

CASH OUTLAYS

------------

Storage Facilities - V.C. 38588.00

Storage Rental 517.00

Truck - V.C. 21609.00

Truck Rental Cost 1866.00

Manager's Salary 12500.00

Labor Cost 54500.00

Overtime Labor Cost 0.00

Bad Debt Loss 2175.00

Advertising Expense 1000.00

Other Expenses 4670.00

Interest Expense 4022.00

Complete Feed Ordered 244320.00

Concentrate Feed Ordered 155595.00

Comm Grade Fert Ordered 57421.00

Custom Blend Fert Ordered 69195.00

Storage Expansion 0.00

Truck Purchase 0.00

-------

TOTAL CASH OUTLAYS -667978.00

FINANCING

---------

Borrow Money 0.00

Repay Loan -6875.00

Call Investment 0.00

Make Investment 0.00

-------

NET CASH FROM FINANCING -6875.00

ENDING CASH 3056.00

--------------------------------------------------------------------

Estimated Cash Available - Day 1 Next Quarter

Cash Balance 3056.00

Collection of Accounts Receivable (1/2 Balance) 77821.50

(Note: Bad Debt Loss Not Included) -------

Estimated Cash Available - Day 1 Next Quarter 80877.50

Note: More cash available by calling investment or requesting a loan

13

ATTACHMENT 5

MARKET SHARE REPORT

MARKET AREA 1 QUARTER 0 --------------------------------------------------------------------------------------

Team 1 Team 2 Team 3 Team 4 Team 5 Team 6

Price Per Ton

Complete Feed 206.00 206.00 206.00 206.00 206.00 206.00

Concentrate Feed 315.00 315.00 315.00 315.00 315.00 315.00

Comm Grade Fert 138.00 138.00 138.00 138.00 138.00 138.00

Custom Blend Fert 159.00 159.00 159.00 159.00 159.00 159.00

Average Prices Price Limits Wholesale Prices

Complete Feed 206.00 202.00 - 210.00 158.00

Concentrate Feed 315.00 311.00 - 319.00 255.00

Comm Grade Fert 138.00 134.00 - 142.00 93.00

Custom Blend Fert 159.00 155.00 - 163.00 106.00

Team 1 Team 2 Team 3 Team 4 Team 5 Team 6

Advertising 1000. 1000. 1000. 1000. 1000. 1000.

Sales by Team (Tons)

Complete Feed 1402.00 1402.00 1402.00 140.00 1402.00 1402.00


Comm Grade Fert 436.12 436.12 436.12 436.12 436.12 436.12


Total 3087.18 3087.18 3087.18 3087.18 3087.18 3087.18

Share of Market

(Pct)

Complete Feed 16.7 16.7 16.7 16.7 16.7 16.7


Comm Grade Fert 16.7 16.7 16.7 16.7 16.7 16.7


Total 16.7 16.7 16.7 16.7 16.7 16.7

--------------------------------------------------------------------------------------

14

Attachment 6

A Record of Decisions for the Purdue Agribusiness Management Simulation

Year One Year Two Year Three

Decision 1 2 3 4 1 2 3 4 1 2 3 4

Price for complete feed _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Price for concentrate feed _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Price for com. grade fert. _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Price for custom blend fert. _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Complete feed ordered _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Concentrate feed ordered _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Com. grade fert. ordered _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Custom blend fert. ordered _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Emergency orders _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Adverstising expenditure _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Credit policy _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Storage capacity expansion _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Truck purchase expansion _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Total Employeess _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Borrow money _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Repay loan _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Call investment _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Make investement _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Expected sales com. feed _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Expected sales conc. feed _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Expected sales grade fert. _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

Expected sales custom fert. _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______

15

Attachment 7

Record of Estimated and Realized Financial Results for the Purdue Agribusiness Management Simulation

Year 1

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Financial Results Estimated Realized Estimated Realized Estimated Realized Estimated Realized

Sales of complete feed (T) _________ _________ _________ _________ _________ _________ _________ _________

Sales of concentrate feed (T) _________ _________ _________ _________ _________ _________ _________ _________

Sales of com. grade fert. (T) _________ _________ _________ _________ _________ _________ _________ _________

Sales of custom blend fert. (T) _________ _________ _________ _________ _________ _________ _________ _________

Total Sales ($) _________ _________ _________ _________ _________ _________ _________ _________

Total Cost of Goods Sold _________ _________ _________ _________ _________ _________ _________ _________

Total Gross Margin _________ _________ _________ _________ _________ _________ _________ _________

Storage rental _________ _________ _________ _________ _________ _________ _________ _________

Truck rental _________ _________ _________ _________ _________ _________ _________ _________

Regular labor cost _________ _________ _________ _________ _________ _________ _________ _________

Overtime labor cost _________ _________ _________ _________ _________ _________ _________ _________

Interest charges _________ _________ _________ _________ _________ _________ _________ _________

Total Expenses _________ _________ _________ _________ _________ _________ _________ _________

Net Revenue _________ _________ _________ _________ _________ _________ _________ _________

Cash _________ _________ _________ _________ _________ _________ _________ _________

Investments _________ _________ _________ _________ _________ _________ _________ _________

Accounts Receivable _________ _________ _________ _________ _________ _________ _________ _________

Inventory complete feed (T) _________ _________ _________ _________ _________ _________ _________ _________

Inventory concentrate feed (T) _________ _________ _________ _________ _________ _________ _________ _________

Inventory com. grade fert. (T) _________ _________ _________ _________ _________ _________ _________ _________

Inventory custom blend fert. (T) _________ _________ _________ _________ _________ _________ _________ _________

Total Inventory ($) _________ _________ _________ _________ _________ _________ _________ _________

Storage Facilities _________ _________ _________ _________ _________ _________ _________ _________

Trucks _________ _________ _________ _________ _________ _________ _________ _________

Other _________ _________ _________ _________ _________ _________ _________ _________

Total Assets _________ _________ _________ _________ _________ _________ _________ _________

Liabilitites _________ _________ _________ _________ _________ _________ _________ _________

Net Worth _________ _________ _________ _________ _________ _________ _________ _________

Unfilled Orders complete feed (T) _________ _________ _________ _________ _________ _________ _________ _________

Unfilled Orders concentrate feed (T) _________ _________ _________ _________ _________ _________ _________ _________

Unfilled Orders com. grade fert. (T) _________ _________ _________ _________ _________ _________ _________ _________

Unfilled Orders custom blend fert. (T) _________ _________ _________ _________ _________ _________ _________ _________

16

Attachment 8


Year 2







Total Sales ($) _________ _________ _________ _________ _________ _________ _________ _________



Storage rental _________ _________ _________ _________ _________ _________ _________ _________

Truck rental _________ _________ _________ _________ _________ _________ _________ _________




Total Expenses _________ _________ _________ _________ _________ _________ _________ _________

Net Revenue _________ _________ _________ _________ _________ _________ _________ _________

Cash _________ _________ _________ _________ _________ _________ _________ _________

Investments _________ _________ _________ _________ _________ _________ _________ _________






Total Inventory ($) _________ _________ _________ _________ _________ _________ _________ _________


Trucks _________ _________ _________ _________ _________ _________ _________ _________

Other _________ _________ _________ _________ _________ _________ _________ _________

Total Assets _________ _________ _________ _________ _________ _________ _________ _________

Liabilitites _________ _________ _________ _________ _________ _________ _________ _________

Net Worth _________ _________ _________ _________ _________ _________ _________ _________





17

Attachment 9


Year 3







Total Sales ($) _________ _________ _________ _________ _________ _________ _________ _________



Storage rental _________ _________ _________ _________ _________ _________ _________ _________

Truck rental _________ _________ _________ _________ _________ _________ _________ _________




Total Expenses _________ _________ _________ _________ _________ _________ _________ _________

Net Revenue _________ _________ _________ _________ _________ _________ _________ _________

Cash _________ _________ _________ _________ _________ _________ _________ _________

Investments _________ _________ _________ _________ _________ _________ _________ _________






Total Inventory ($) _________ _________ _________ _________ _________ _________ _________ _________


Trucks _________ _________ _________ _________ _________ _________ _________ _________

Other _________ _________ _________ _________ _________ _________ _________ _________

Total Assets _________ _________ _________ _________ _________ _________ _________ _________

Liabilitites _________ _________ _________ _________ _________ _________ _________ _________

Net Worth _________ _________ _________ _________ _________ _________ _________ _________





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