Inventory Management Game
Skill Set: Operations
TOPIC OR UNIT OF STUDY
Purchasing procedures used by a business
CONTENT STANDARD(S) AND OBJECTIVE(S)
 Students will
characterize purchasing.
 contrast new-task buying, modified rebuying, and straight rebuying purchases.
 choose proper inventory levels for products.
 compute purchasing discounts (2/10 net 30) and extensions.
INTRODUCTION
Students will play the poster game – determining an appropriate inventory level based on their
estimates of demand for new-task buying (purchasing product for the first time). Students should
indicate their preference first to the instructor, using the handouts and then on the class blog explain
why they chose the inventory levels they did to their peers. The instructor will let the class know the
results and determine who was the closest to having the appropriate inventory.
In an effort to sell more posters to the retailers, the warehouse poster company offers attractive
purchase payment options to encourage rebuying, such as (2/10 net 30) and extensions. If a poster
costs $2 to the warehouse and can sell them to the retailer for $4 (who then in turn sells them for $10),
how much money would the retailer save if they order 50 posters and pay the warehouse within the
first 10 days)? Send an email to the instructor with your answer and explanation of how you came up
with the number, in the same email, explain at least one type of payment extension offers that may
appeal to the retailer.
ESSENTIAL QUESTION
How do businesses incentivize buyers to manage the businesses’ inventory levels?
INTEGRATION OF ACADEMICS, TECHNOLOGY, ENTREPRENEURSHIP
Academics: Upon completion of activities the above referenced CSOs will be met.
Technology: Students will use the Internet to post their inventory estimates to the class blog and also
submit inventory math question/answer to the instructor’s email. Students may use the Internet to
research payment extension offers.
Entrepreneurship: This activity puts the student in the shoes of the business owner and the efforts
made to manage inventory and incentivize buyers to rebuy.
STUDENT INVOLVEMENT IN PLANNING PROCESS
Students will choose their own poster they prefer and then make a guess on how many of each type of
poster to order. They will evaluate theirs and their peers inventory decisions and discover how close (or
far) they were from a perfect inventory level. Students will also research various payment extension
and submit at least one example of purchase extension(s) to the instructor’s email.
TASK(S)
Day 1:
The student will:
 Play the poster game – determining an appropriate inventory level based on their estimates of
demand for new-task buying (purchasing product for the first time).
 Indicate their preference first to the instructor, using the handouts.
 On the class blog explain why they chose the inventory levels they did to their peers. (The
instructor will let the class know the results and determine who was the closest to having the
appropriate inventory).
 Send an email to the instructor with your answer and explanation of how you came up with the
number based on the following situation:
Page 1 of 5
o
In an effort to sell more posters to the retailers, the warehouse poster company offers
attractive purchase payment options to encourage rebuying, such as (2/10 net 30) and
extensions. If a poster costs $2 to the warehouse and can sell them to the retailer for $4
(who then in turn sells them for $10), how much money would the retailer save if they
order 50 posters and pay the warehouse within the first 10 days)?
 In the same email, explain at least one type of a payment extension offer(s) that may appeal to
the retailer (purchaser).
RESOURCES
Internet
Marketing II textbook
TECHNOLOGY USE
Internet – class blog, email, research purchase information
EVALUATION
Students will be provided rubrics on the poster activity that will be discussed in the class blog. Students
will be given rubrics on the email to the instructor. Instructor will review findings with class and reteach where necessary.
TIMELINE
1 class period at 45 minutes
CONCLUSION
Do I understand how to manage inventory and incentivize purchasers?
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The Poster Game – Inventory Management
You will be shown three separate posters.
You will first have to decide which single poster you would select (you must indicate precisely
one selection).
Your Name: ______________________
Your Favorite Poster:

A

B

C
Poster A
Poster B
Poster C
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Now, you are to play the role of a business owner who sells the posters at special events (e.g.
Spring Festival concert or fair, etc.). However, in this case the market is your classmates on this
course! Each poster costs $2 and is sold for $10. The total number of posters is fairly certain
(the size of the class), but the mix is uncertain. All unsold posters are scrapped with no salvage
value. The objective is to maximize profit. You must decide how many posters of each type to
purchase. Again, use the form below to record your purchase quantities, and submit it to the
instructor.
Your Name: _____________________
Poster
A
B
C
Purchase Quantity
________
________
________
Write down your purchase inventory choices and respond in the class blog about your choices
and explanation.
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Class blog rubric
Category
Credit
No credit
(0 points)
Original blog post
Post follows instructions
provided by the instructor.
(4 – 8 points)
Thoughtfully and respectfully
responded to at least one
other classmate
(more than I agree).
(1 point)
No more than 1 obvious
grammar and/or spelling
error(s) in the response.
(1 point)
No or limited response.
Response
Grammar/Spelling
No response to other peer or
little more than I agree and/or
disrespectfully presented.
Multiple grammatical or
spelling errors.
Marketing Math – Email Instructor Checklist

Send an email to the instructor with your answer and explanation of how you came up with the
number based on the following situation:
o
o

In an effort to sell more posters to the retailers, the warehouse poster company offers
attractive purchase payment options to encourage rebuying, such as (2/10 net 30) and
extensions.
If the receipt of purchase included the terms (2/10 net 30), and a poster costs $2 to the
warehouse and can sell them to the retailer for $4 (who then in turn sells them for $10),
how much money would the retailer save if they order 50 posters and pay the
warehouse within the first 10 days)? (3 points – show your work)
In the same email, explain at least one type of a payment extension offer(s) that may appeal to
the retailer (purchaser). (2 points)
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