Calculation process

First of all, log in to your account in GMCModel or create a new one to start using the service.

The typical workflow consists of several consecutive actions (see the diagram below):

Global Management Challenge calculation workflow

So to prepare a calculation, you go through the following steps:

Preparing a new calculation
Entering or updating assumptions (optional)
Entering or updating decisions (optional)
Launching calculation and analyzing results
Changing input data and recalculating (optional)

To prepare the forecast for the a new management period (quarter) open the screen "Calculation" and click the button "Prepare new Calculation". A dialog window opens:

Prepare a new GMCModel calculation dialog

Fill the fields:

Calculation Name - any string (up to 255 characters) which will help you to distinguish one calculation from another.
Management Report for the previous period - upload Excel provided by the Global Management Challenge simulator. The outgoing balances from this report will be used as incoming balances for the calculation (of the next quarter). For example, if you are preparing a forecast calculation for the 3rd quarter, use here a report for the 2nd quarter.
Select the language of the previous period report. If this report contains worksheets 'Your decisions', 'Resources and products', 'Financial statements', 'Group information', then select English.
Link the previous period calculation created with GMCModel. The quarter for this calculation is the same as quarter of Excel management report selected above.

On clicking the button "Prepare", the Excel file is uploaded and parsed. If the Excel report has the correct format then the parsing will be executed without errors and a success message will appear in the top right corner:

Your decision for the previous period are used as default (initial) values for the current calculation (for the next quarter) which you can modify in the next steps.

To prepare a forecast, the GMCModel engine uses two groups of incoming variables:

Decisions - those you can explicitly specify in the simulator as your decision. They are described in the next paragraph (Step 3)
Assumptions - those you cannot enter explicitly in the simulator, though post factum you can see (or derive) their values when the management report is generated. They are described in this paragraph.

You can see and change these varibles in the left-hand panel on the tab Your Decisions:

Usually you do not know the exact values of variables from Assumptions group. When you prepare a new Calculation and upload a management report for the previous period (an Excel file), it is parsed, and fact values from the past quarter are used as initial (default) values for the next quarter. Generally these parameters do not change sharply from quarter to quarter, so you will want to leave the default values (i.e. the fact values from the past period) to minimize the prediction error. But if you have a good rationale, e.g. an observation that machine efficiency decreases from period to period, then you can change value of any of this assumption parameter so that to make the forecast more accurate.

The assumptions are grouped into 4 areas: Products, Personnel, Machines, Finance. To get the detailed description and purpose of each assumption parameter, click the popup help button (a '?' sign right to the parameter value). Do not forget to click the "Save changes" toolbar button after modifying the variable values.

In the Product Assumptions area there is a special parameter "Sold quantities". It affects how sold quantities are calculated. There are two options:

You don't know the exact sold amounts for each Product-Market combination. Set safety margins equal to zeros when you expect to sell exactly all produced quantities + unsold stock from the previous quarter. Set these safety margins to a positive number when you do not want to sell all produced plus warehoused quantities in the next period. This may be the case if you want to keep some safety stock to mitigate the risk of stock-outs. Or you follow Manufacture-to-Stock approach and want to utilize your equipment and personnel as much as possible in the next period in order to have enough stock to increase sales in the future periods. Choosing this option makes the GMCModel engine calculate Sales as a function of Production plus Incoming Stock using the formulas:
- Sold_Quantity = (1-Safety_Margin) * (Production_Quantity + Incoming_Stock)
- Ungoing_Stock = Safety_Margin * (Production_Quantity + Incoming_Stock)
You know (from the management report or from other forecasting model) the exact (fact) sold amounts for each Product-Market combination. You either want to test the GMCModel accuracy or fine-tune the forecast. Choosing this option makes the engine calculate Sales independently of the Production and Incoming Stock.

On the tab "Your Decisions" there are two panes "Decisions about your Products" and "Decisions about your Resources":

These panes contain a number of variables (parameters) where you enter your management decisions on the next quarter. The list, meaning, location and units of measure of these parameters are the same as in the input screen of the simulator. Do not forget to click "Save changes" toolbar button after modifying the variable values.

To get the detailed description and purpose of each decision parameter, click the popup help button (a '?' sign right to the parameter value).

Having entered or changed the values of your assumptions and decisions, click the toolbar button "Launch calculation" to begin calculating:

Launch calculation with Global Management Challenge Model

The calculation process usually completes in less than 5 seconds. Click the toolbar button "Select Calculation" to see the list of available calculation made by you or other members of the team(s) you belong to. Pay attention to the calculation status. If it is IN_PROGRESS, then the calculation is not completed yet. The ready calculation has its status COMPLETED. Select it from the list and click the tab "Checks and Indicators" to see if basic constrains are met and your management plan is feasible:

Global Management Challenge Model Checks and Indicators

To get the detailed description and purpose of each indicator, click the popup help button (a '?' sign right to the indicator value). Make sure you have enough resources to realize your plan, and their utilization does not exceed 100%.

Attention! If one or more checks are not passed then your plan is not feasible, which makes the forecasted data not valid.

Only when all checks are passed, click the tab "Forecasted Financial Statement" to see the calculation results:

Global Management Challenge Model forecast results

The financial indicators, their meanings, location, units of measure are same as in the management report (in Excel format) you download from the simulator (game) site.

There might be a discrepancy between the GMCModel forecast and real results, read more about possible reasons of plan/fact difference.

Usually finding an optimal decision takes several (or even several dozens) iterations. When you change Assumption or Decision variable in a COMPLETED calculation, the state of this calculation is restored to PREPARED, so you can launch it again. If you by mistake supplied the wrong management report from the previous period or specified the wrong previous period calculation you can replace them without deleting and recreating the whole calculation. Click the tab "Data From Previous Period", and click the button in the right column of the table to open a dialog window where you can specify the correct data source.

This instruction may look long and complex, but when you try GMCModel Calculator yourself I'll find the whole process quite easy and straightforward.

Write a comment or question:

Contents of Documentation

How to use GMCModel?

Step 1 - Preparing a new Calculation

Step 2 - Entering Assumptions

Step 2b

Step 3 - Entering Decisions

Step 4 - Analyzing Results

Step 5 - Changing input data and recalculating

Comments