chocolate firm - Management Accounting Simulation

Overview of Simulation

In this management accounting simulation, students manage the operations and finances of a large chocolate and confectionery company. Working in teams, students need to determine their roles within the company, analyse internal and external data, and determine their financial strategy with the ultimate aim of increasing revenues and reducing costs and overheads. 

Students Become Management Accountants

The simulation provides exposure to strategic performance improvement techniques such as ‘Direct Product Profitability Analysis’ and ‘Direct Customer Profitability Analysis’, ‘Value analysis’ (of Porter) and alternatives to budgeting etc.

Strategic performance indicators such as ROI, RI and EVA are presented to students by the system after each round (year), and can calculate those themselves using their company’s data.

Played over a number of rounds, each round is equal to one year of operations. Using unexpected events (news items / curveballs) such as “A fraud within your invoicing process occurred”, students learn how to critically evaluate quantitative and qualitative data and find relevant issues which occur in strategic management accounting. 

learning oUtcomes

• Students develop a clear understanding of strategic-level Management Accounting
• Students are able to apply theoretical principles and accounting models to their decision-making processes
• Students understand how departments and functions interact and how decisions affect one another.  
• Students develop strong analytical skills, analysing the effectiveness of inventories, financials, raw materials, cost prices, suppliers, production costs, and stock overviews
• Students can design and improve operational processes by taking decisions for all departments including upgrading machinery, procuring new suppliers, improving warehouse construction, product composition, marketing etc.

assessment ideas and examples

The chocolate firm simulation can be assessed in a variety of ways. Below are the options that are used most frequently:

• Create an individual reflection report on what students have achieved and what they have learnt from the simulation.
• Written report in which students write down each round what decisions they have taken and what they believe the outcomes will be. They reflect on the decisions made in the previous round and continue this process throughout the simulation.
• Prepare a presentation (to virtual stakeholders) and explain the decisions the team made.
• The ranking list could become a component of the assessment. But not on its own. It should be combined with either a reflection report or written report.