CompXM Exam Latest Update With Verified Solutions
Pfmn
new performance coordinate on the perceptual map; performance indicates how well your product performs (speed, sensitivity, etc.); the long term trend is towards higher performance; enter the performance specification you want your product t...
CompXM Exam Latest Update With Verified
Solutions
Pfmn
new performance coordinate on the perceptual map; performance indicates how well your product
performs (speed, sensitivity, etc.); the long term trend is towards higher performance; enter the
performance specification you want your product to have when the project finishes; for existing
products, the farther the move, the longer the time and the higher the cost; for new products, project
length depends upon proximity to your existing products
size
new size coordinate on the perceptual map; size indicates the physical dimensions of the product; the
long-term trend is towards smaller products; enter the size specification you want your product to
have when the project finishes; for existing products, the farther the move, the longer the time and
the higher the cost; for new products, project length depends upon proximity to your existing
products
MTBG
new mean time before failure specification; MTBF predicts reliability; it indicates the average number
of hours your product will operate before it fails; higher reliability implies higher material costs to
build your product
revision date
the date the project will complete; until this date, the product is produced with the original
specifications; after this date, the product is produced with the new specifications; any existing
inventory at that time is reworked to the new specifications at no additional cost; tip: under the rules,
a new project cannot begin until the old project finishes; all projects begin on January 1st; projects
that finish in December are better than projects that finish in January because the December revision
date will allow you to begin a new project almost immediately, while the January revision date will
force you to wait until the next round
age at revision
the new perceived age of the design when the product emerges from R&D; moving a product on the
perceptual map affects the age, but changing MTBF specifications does not; when the product moves,
customers see the product as younger than the old design, but not entirely new; they cut the old age
in half and behave as though the design is younger
R&D cost
the total cost of the project in thousands of dollars; the most you can spend in any year is $1 million;
if the project costs more than $1 million, $1 million will be spent this year plus the remaining balance
in future years
price
the price of your product this year; customers expect prices to fall within a reasonable range; for the
expected ranges, visit the segment pages under reports
promo budget
promotion budget this year (in thousands); promotion drives customer awareness; the more
customers that are aware of your product, the more likely they will choose your product; you can
think of promotion as driving all interactions with customers before they begin to actively shop;
,awareness decays over time- you lose about 1/3 each year as customers forget the product; if your
product had 60% Awareness last year, this year it would fall to 40% if you spent $0 to promote the
product; promotion efforts are subject to diminishing returns- your first $1M increases awareness
about 22%, the second million adds another 23%, and the third million only another 5%
sales budget
sales budget this year (in thousands); sales budget drives accessibility; accessibility examines the
question, "how easy is it for customers in the segment to interact with your company during and after
the sale?"; it measures distribution channels, sales force, shelf space, order entry systems, customer
support, etc; the easier it is to interact with your company, the more likely it is customers will choose
your products; a 60% accessibility rating means that 60% of customers find it easy to work with you
and 40% do not; if you and a competitor offer identical products, you are more likely to win the sale if
your accessibility is higher than your competitors; accessibility is a segment issue- products within the
segment are assigned the segment's accessibility, while products in the rough cuts are pro-rated;
diminishing returns apply- if you have one product in a segment there is no additional benefit for
spending more than $3M, and if you have two or more products in a segment, there is no additional
benefit for spending more than a combined $4.5M; accessibility decays over time- you lose about 1/3
each year; a $1M sales budget (combined across all products in the segment) adds 7%, $2M adds
22%, $3M adds 32%, and $4.5M adds 35%
benchmark prediction
estimates unit sales assuming your product competes with a standardized, mediocre playing field;
does not use your actual competitors products- it is useful for experimenting with price, promo and
sales budgets; it is useless for forecasting
your forecast
enter the number of units (in thousands) that you believe you will actually sell; if you leave "your sales
forecast" at zero, the proforma financial reports will use the computer's unit sales forecast; tip: it is
important to develop a sales forecast for each product; estimate your sales based upon current
market conditions, then develop a best/worst case spread; for example, if you think demand will be
about 1000, then a worst case might be 800 and a best case 1200; enter 800 here and produce
enough new inventory on the Production spreadsheet to have 1200 on hand for sale; this will force
the Proforma Balance Sheet and Income Statements into your worst case scenario - below expected
sales with inventory consuming your cash; if you project even a tiny amount of cash in this nightmare
world, you will not take an emergency loan from inventory expansion; save your decisions, then enter
your best case into the "your sales forecast" column- your proforma financials will now project the
best possible world - above expected sales with all of your inventory converted to cash; if your
forecast is good, the actual results will fall somewhere between your worst and best cases
gross revenue
the revenue forecast for each product; price times unit sales; assumes inventory will be available to
meet demand; if Your 'sales forecast' is zero, the calculation uses the computer's 'benchmark
prediction'
variable costs
the variable cost forecast for each product; material cost plus labor cost plus inventory carry costs
times unit sales; if your "sales forecast" is zero, the calculation uses the computer's "benchmark
prediction"; the calculation uses the material cost and labor cost it finds on the production worksheet,
and assumes there is no leftover inventory to carry
contribution margin
, gross revenue forecast less variable costs
less promo/sales
contribution margin less promo less sales budgets
A/R lag
accounts receivable lag period in days; 30 days means that, on average, you allow customers 30 days
before you expect payment; more generous terms produce higher demand; may also be found on the
finance page
A/P lag
accounts payable lag period in days; 30 day means that, on average, you wait 30 days before you pay
your vendors; the longer the delay, the more likely it is that vendors will withhold parts deliveries;
may also be found on the finance and production pages
schedule
scheduling is in thousands of units
unit sales forecast
the unit sales forecast brought forward from the marketing spreadsheet
inventory on hand
the number of units sitting in your warehouse at the beginning of the year; "inventory on hand" plus
"production after adj." equals the number of units you could sell this year
production schedule
the number of units you wish to build this year, in thousands; you cannot schedule more than twice
your first shift capacity
production after adj.
production after adjustments; four constraints are taken into consideration: 1. capacity- you cannot
build more than twice your 1st shift capacity because there are only two shifts; 2. complement- if you
do not have enough workers, then you may not be able to produce the production schedule even if
your employees work 100% overtime; 3. accounts payable lag policy from the marketing spreadsheet-
as you extend your payables policy, vendors increasingly withhold parts deliveries, making it
impossible for you to meet your production schedule; 4. time in market- new products introduced this
year are further constrained by the time they will be in the market (eg, if a new product is introduced
in October, you could only produce for three months)
2cnd shift production%
complement refers to your workforce size; at full complement, you work no overtime; full
complement means that you have enough workers to complete the production schedule; however,
some of these workers might be on a second shift; if you are under complement, then some of your
1st shift workers must work overtime to meet the production schedule; for new products introduced
this year, second shift considers the time that your product will be in the market (eg, if your product
emerges in December, you have only one month or 1/12 your annual capacity available for
production- since you probably will schedule as many units as you can in the time available, chances
are your second shift production will be 100%); if you are so short handed that you cannot fill the
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