Platforms & Newsvendors Game

Paper details:

FoR the game U have to play below you can guess on all or what ever but use my name (rod). also when you have to write about the management strategy it do not use the full 300 words just a few sentences is fine .

Part 1: Analyze a marketplace/platform business model (30 points)
Identify a company that has a marketplace/platform business model (you cannot choose E-Bay, Alibaba, Taobao, Tmall, Uber, Lyft, or Airbnb). First, briefly describe who this marketplace/platform is matching (i.e., who are the “buyers” and who are the “sellers”). Then, based on our discussion from Lecture 11, explain the mechanisms and processes this company is using to:

Create market thickness and increase the number of buyer-seller matches.
Create trust and reduce transaction risk;
Allow for price discovery and set prices;
Reduce transaction costs and manage congestion.
How is this company avoiding “leakage,” i.e., avoiding buyers and sellers circumventing the platform to transact directly with each other? If you don’t know how the company avoids leakage, speculate how you think they could do it. Alternatively, if you believe leakage is not an issue for the company, explain why.

Part 2: Bagel Shop Game (70 points)

In this assignment, you will play an online game. In this game, you manage a bagel store and make profits by selling bagels to customers each day. Early in the morning, before you open the store, you must decide how many bagels to order before the day begins. After bagels are baked and delivered, you open the store, and customers begin to arrive and purchase bagels.

You sell each bagel for a per-unit price of $4.00.
You order each bagel for a per-unit cost of $1.00.
Producing bagels after the store is opened is too costly and disruptive to the operations. You also sell only fresh bagels and don’t carry any inventory to the next day. Hence, you can only sell what you ordered prior to opening the store each day. You must therefore carefully decide how many bagels to order before opening the store each day.

If you order too few, you may run out of bagels and fail to satisfy some of your customers, and as a result, you will not earn all possible profits. That is, you lose the opportunity to make $3.00 per unsatisfied demand. This cost is known as cost of underage.

If you order too many, at the end of the day, you donate the leftover bagels for free to the nearby homeless shelter. In other words, you lost $1.00 per unsold bagel. This cost is known as cost of overage.

Any information about demand?

Customer demand is uncertain, so you do not know exactly how many bagels you will sell during the day. However, historically you have observed that demand for bagels each day follows a normally-distributed pattern with mean μ=150 and standard deviation σ=50. In other words, each day, demand for bagels will be drawn from this normal distribution after you place your order.

Customer demand in any day is independent of demand in any other days. So, whether demand is small or large today has no impact on customer demand tomorrow.

What is your objective and how do you win?

You will manage your store for 20 days. Your objective is to maximize your total profit by deciding how many bagels to order at the beginning of each day. There are other bagel stores in the neighborhood managed by other players. The player who makes the highest total profit wins.

How are profits calculated?

Sales each day are equal to the minimum of the Order Quantity and the Customer Demand.

Profit Each Day = $4.00 * Minimum (Order Quantity, Customer Demand) – $1.00 * (Order Quantity)

For example, if you order 20 bagels and customer demand is 15, then you sell 15 bagels and have 5 excess. Your profit for that day is $4.00 * 15 – $1.00 * 20 = $40.00.

The total profit you earn in this game is equal to the sum of your profits over all days.

Login Instructions

Please see the slides at the end of Lecture 11 for login instructions with pictures. Here are the steps:

Sign up (and create an account) or Login at (Links to an external site.)
Once you login, click on the “Join New Game Session” button
Enter the session code m4vu and “Join”
Click on the “Click for instructions” and read it carefully (please refer to the slides at the end of Lecture 11 for more details and pictures).
Come up with a strategy and play the game! 🙂

There are two deliverables:

Playing the game
A short write-up (<300 words, can be even shorter) about your bagel inventory management strategy. If you didn’t have a consistent strategy, discuss what you found challenging in managing the bagel inventory.
Note: There are no right or wrong answers at this point. If you play the game and submit the short write-up, you will get full points.

Note 2: The assignment is worth 100 points. If you are among the 10% of players in the class with the highest profits in the game, you will get an extra 10 points (you will score 110/100 as long as you submit your writeup)

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