CAPSIM Questions and Answers

CAPSIM Questions and Answers Proformas projections for upcoming year Annual Reports results from the previous year Where do you enter departmental decisions? Foundation Spreadsheet 4 Main Company Departments 1. Research and Development 2. Marketing 3. Production 4. Finance (HR and TQM may also be used) Where is the Customer Survey Score located? in Foundations FastTrack What year does Foundation FastTrack report? reports "Last Year's Results" Research and Development (R&D) PRODUCT -designs product line -invent and revise products Marketing PRICE, PROMOTION, PLACE -responsible for sales forecasts Production -determines how many units will be manufactured during the year -responsible for buying and selling product lines Finance -makes sure your company has the financial resources it needs to run through the year -raises $ via 1-year bank notes, 10-year bond, or stock issued -issues stock dividends, buy back stock, or retire bonds before their due date Plug-Ins -coordinate group discussion and consensus R&D and Marketing make sure products meet customer expectations R&D and Production ensure assembly lines are purchased for new products Marketing and Production -make sure manufacturing quantities are in line with forecasts -determines level of capacity Marketing and Finance -project revenues for each product and set Accounts Receivable Policy Accounts Receivable Policy amount of time customers can take to pay for their purchases Finance and Production work together when company needs money for additional equipment Finance and All Departments Finance Department acts as a watchdog over company expenditures Practice Rounds allow you to organize workflow among the members of your company -where you experiment with your decisions in a competitive environment Competition Rounds occurs after practice rounds -companies compete for up to 8 rounds (8 years) Decision Audits a complete trail of team decisions -help identify decision-making strengths and weaknesses To ensure company success, Successful Managers Will (3)... -analyze market and competing products -create and execute a strategy -coordinate company activities Industry Conditions Report -help you to understand your customers -lists market segment sales percentage and projected growth rates unique to your simulation -published ONCE at beginning of simulation 2 Customer Market Segments -low tech -high tech 4 Buying Criteria Considered by Customers 1. Price 2. Age 3. MTBF (mean time before failure) 4. Positioning Price-low tech want inexpensive products Price-high tech willing to pay higher prices Age-low tech prefers proven technology that's been on the market for years Age-high tech wants new technology MTBF-low tech satisfied with lower ratings MTBF-high tech prefers higher ratings Positioning a product attribution created by combining size and performance How many units long is the Perceptual Map? 0-20 units What goes on vertical axis? size What goes on horizontal axis? performance Positioning-Low Tech satisfied with larger and slower products Positioning-High Tech want faster and smaller products Which market segment drifts quicker? -High Tech drifts quicker Where are drift rates published? in Industry Conditions Report Where on the Perceptual Map will customers buy products? Inside the circles Buying Criteria of Low Tech 1. Price ($15-$35, 41%) 2. Age (3 years, 29%) 3. MTBF (14,000-20,000, 21%) 4. Positioning (Performance: 4.8, Size: 15.2, 9%) Buying Criteria of High Tech 1. Positioning (Performance: 7.4, Size: 12.6, 35%) 2. Age (0 years, 29%) 3. Price ($25-$45, 25%) 4. MTBF (17,000-23,000, 13%) Does positioning criteria change or stay the same every year? change Does price criteria change or stay the same every year? stay the same Does age criteria change or stay the same every year? stay the same Does MTBF criteria change or stay the same every year? stay the same Customer Survey Score -recorded monthly (12x a year) -higher score outsells product with lower score -reflects how well a product meets its segments' buying criteria -prices do not change during the year What is a Perfect Customer Survey Score? 100! -positioned at ideal spot -priced at bottom of expected range -have ideal age for segment -have MTBF at top of expected range Rough Cut Circle dashed outer circle -outer limit of a segment -radius of 4.0 units Fine Cut Circle solid inner circle -customer's ideal area -radius of 2.5 units Ideal Spot center point where demand is highest Positioning Rough Cut -products placed between 2.5 and 4 units from center -poorly positioned and will have reduced customer survey scores Located Just Beyond Fine Cut scores drop 1% Located Halfway Across Rough Cut scores drop 50% Located at Edge of Rough Cut scores drop 99% Positioning Fine Cut -products within 2.5 units of center of circle -ideal spots are the black dots What is the price range of each segment? $20 Price Rough Cut -sensors priced $10 above/below segment guidelines will not be purchased Priced $1 Above/Below Segment Guidelines lose 10% of Customer Survey Score Priced $10 Above/Below Range demand=0 Price Fine Cut -price scores follow a classic demand curve -as price goes down, scores go up MTBF Score the number of hours a product is expected to operate before it malfunctions -each function sets a 6,000 hour range for MTBF -customers want products at top of range MTBF Rough Cut 1000 hours Below lose 20% Customer Survey Score MTBF Rough Cut 4999 hours Below lose 90% Customer Survey Score MTBF Rough Cut 5000 hours Below demand = 0 MTBF Fine Cut -within range, Customer Survey Score improves as MTBF increases How much do material costs increase for every additional 1,000 hours of reliability? increase $0.30