Capsim Exam

66. If you drop your sales budget to zero, accessibility drops to 0% in how many years?

3

262. With each year (round) customer awareness for each product decreases by:

33%

105. The situation analysis consists of ______ parts.

5

213. How many market segments are there?

5

243. Teams can produce up to ______ products.

8

The Perceptual Map is

A marketing tool used to track the position of the company's products against those of the competitors.

296. Companies can enter a Recruiting Spend budget up to an additional ____.

a. $5,000

254. The Consumer Report rates product attributes of price, reliability, age, positioning, awareness and accessibility using:

a. Three levels (such as Good, Fair, or Poor)

214. Which of the following buying criteria does not have a rough cut?

age

316. At the start of the simulation, all assembly lines have an automation level between:

b. 3.0 and 5.0.

225. Quality Initiative Training can

d. decrease labor costs.

221. EPS (Earning Per Share) is calculated by

d. dividing net profit by the number of shares outstanding.

246. Capacity is sold by

d. entering a negative number in the Buy/Sell row on the Production Spreadsheet.

235. Stock price is a function of:

e. Book value, Earnings per Share, and Dividend.

53. Which Automation rating requires the longest time to reposition a product?

e. 10

206. Inventory Carrying Cost is ___% of the average cost of production.

e. 12

159. In only one product segment, diminishing returns for inside sales is reached at

e. 30

318. Each year the company receives bond ratings. The range of these bond ratings from best to worse is:

e. AAA to D.

229. How are the Starting Position and the Negotiation Ceiling related?

e. The Negotiation Ceiling is always 10% above the Starting Position.

261. What does not drive length of R&D project?

e. The labor strike.

47. Which of the following is not addressed by R&D?

e. Workforce Complement

If there are two identical products, one that has 100% accessibility and one that has 0% accessibility,

the product with 100% accessibility will outsell the other 2 to 1 providing all other attributes are identical.

224. Products that are halfway between the fine and rough cut circle will experience a drop in customer survey score by:

50%

Price accounts for what percentage of the buying criteria for the low end segment?

53%

272. The center spot of traditional products drifts _______ each year.

a. +0.7 performance, -0.7 size

153. This strategy will focus on the high technology segments (High End, Performance and Size). Competitive advantage will be gained by distinguishing our products with excellent design, high awareness, easy accessibility, and product extenders. Our R&D competency will keep our designs fresh and exciting. Our products will keep pace with the market, offering improved size and performance. The prices of our products will be above average and we will expand capacity as we generate higher demand.

a. Niche Differentiation

247. Your inventory for a product will be automatically liquidated at half average cost of production if you

a. Sell all the capacity on the corresponding production line

341. Which is false about production in Capsim?

a. Teams cannot produce beyond 100% capacity.

145. Repositioning moves a product on the Perceptual Map from its old location to a new one. When does the new location become active?

a. The day the R&D project completes

71. What is one drawback of increasing automation?

a. The product requires increased time/expense for subsequent short-move repositioning.

108. When plotting the segment locations for each round

a. the goal is to determine the ideal spot location for each segment during the 8 years.

76. Which three factors drive labor cost?

b. Wage and benefit rates c. Automation levels d. Second shift/Overtime costs

309. In what circumstance would a company have a high market share relative to that of its competitors, though it is not making best use of resources available to it?

b. Where competitors underperform, a company may have a higher market share than that of its competitors though it is not making best use of its resources.

41. Each segment places

b. a different emphasis on features of the 4 buying criteria.

274. If you sell all the capacity on a production line, Capstone interprets this as

b. a liquidation instruction and will sell your remaining inventory for half the average cost of production.

133. The automation level

b. causes you to require more manpower with lower ratings. c. causes you to require less manpower with higher ratings.

168. A product's demand is driven by

b. customer survey.

165. The Promotion part of advanced marketing allows teams to allocate their time based on

b. each Product.

203. In order to achieve 100% accessibility, a team must:

b. have at least two products in the same segment's fine cut.

194. Customers that are willing to pay for products with cutting edge technology that are fast performing and small in size are in the

b. high end segment

308. Investments in training leads to a __________ and _________.

b. higher productivity, lower turnover

319. The December Customer Survey indicates

b. how customers perceived the products in the segment.

49. When an R&D effort started in 2001 completes on September 15, 2002, the product revision kicks in

b. immediately upon completion.

74. If a line has a capacity of 100,000 units, the cost of changing the automation level 1 unit either up or down is

c. $400,000.

155. When working with inside sales, each inside salesperson costs

c. $50,000.

185. When investing in direct mail, diminishing returns apply after

c. $800,000 per product.

128. What is the minimum amount of time that it takes to create a new product?

c. 1 year

135. Negotiation Ceilings which represent the maximum management is willing to pay are always

c. 10% above the starting positions.

73. If you want to add 500,000 units of capacity to an assembly line with an automation rating of 5, how much will it cost?

c. 13,000,000

283. The order of the 4 buying criteria is the same for the following two segments:

c. Size and High End.

38. Which of the following is not a type of market segment in CapSim?

c. Standard

333. When should you purchase the production line to produce a new product?

c. The year prior to its introduction

186. The potential reach for direct mail is rated as good for the

c. Traditional and Low End.

234. The potential reach for print media is rated as good for the

c. Traditional and Low End.

184. The sales channel effectiveness for the distributors is highest for

c. Traditional and Low.

313. Your company was formed ______________

c. When a former monopoly was broken up into identical competitor

321. Lowering the automation level will result in

c. a charge.

67. If your company has a sales budget of $3 million and drops it to zero,

c. accessibility drops to 0% in three years.

273. Finance Decisions should be made

c. after the other departments have entered their decisions.

81. To run perfectly, all HR department managers should know that

c. all strike settlements should be halfway between the demand and the negotiation ceiling.

181. Combining size and performance creates a product attribute known as

c. positioning.

297. The following describe the strategy of Differentiation with Product Lifecycle Focus, except:

c. prices are below average.

100. Investing in CCE/Six Sigma can

c. reduce labor and material costs.

280. Automation levels are given on a scale of _____ to _____.

d. 1.0; 10.0

192. At what rate is inventory carrying cost charged?

d. 12%

196. When a segment's product supply exceeds demand, how much appeal, to the customer, will a product priced $1 above or below the segment price range lose?

d. 20%

244. A production line with 1000 units of capacity has a max production capability of:

d. 2000.

200. What is the starting awareness percentage of a new product?

d. 25%

237. If your company offers 90 days Account Payable policy, suppliers will start to withhold material for production at

d. 26%.

312. R&D project length can be as long as ___________.

d. 3 years

154. The resources used in the Sales Budget are

d. Outside Sales, Distributors, and Inside Sales.

188. Sales channel effectiveness for inside salespeople is highest for

d. Performance

324. Which segment has the highest growth rate?

d. Performance

143. Which customer group or market segment seeks high reliability, advanced technology products that emphasize high performance?

d. Performance customers

256. Which one of these criteria is not a top product characteristic of at least one segment?

d. Promotion

174. This process management initiative reduces labor costs.

d. Quality Initiative Training (QIT)

191. What product attributes do Performance customers value the most?

d. Reliability

255. If you see a red flag on one of your spreadsheets, what does it mean?

d. There is more information.

315. The percentage of workers that left the company last year is the:

d. Turnover rate.

197. What section of the perceptual map is considered ideal for the low end segment?

d. Upper Left

86. Capital needed for company activities cannot be acquired through:

d. arbitrarily firing employees.

The two characteristics that the perceptual map evaluates are

Performance and Size

What is the top buying criteria for the low end segment?

Price

Age refers to:

Product Age.

What trend can be explicitly observed in the industry in which your company is operating?

Products become smaller and smaller.

Customers that want small products and are willing to sacrifice performance are in the

size segment

On perceptual map, the percentage of customers interested in a product positioned outside of the rough cuts of that product is

0%

271. The accounts payable lag has implications for production. At ________ days, suppliers withhold all material.

150

264. High end customers prefer a product age of 0, at what age exceeds the fine cut for the product

2 years

What is the most important buying criteria for the Traditional Segment

Age

What are the segment buying criteria?

Age, Ideal Position, MTBF, and Price

Once you upload your official decisions during a round, how many times can you change them before the end of the round?

As many times as you want

Successful managers will:

Create a strategy Coordinate company activities Analyze the market and its competing products

Pricing standards are set by

Customers

The segments all drift to the lower-right section of the perceptual map. Why does this drift take place?

Customers want smaller and faster products.

How many products does every team start with?

Five products

When tracking market segments on the performance and size perceptual map, which segment moves or "drifts" the slowest?

Low End

MTBF in the segments should be

MTBF (Performance) > MTBF (High End)., and MTBF (Low End) < MTBF (Size).

"Reliability" is expressed in terms of

Mean Time Between Failure.

The Traditional segment's ideal spot is

Near the center of its circle.

Customers that want proven products and current technology of moderate size and performance are in the

Traditional segment

What are three of the five Segments?

Traditional, Low End, High End, Performance, Size,

106. The situation analysis is

a. a team exercise. b. designed to help your group understand the current market conditions. c. designed to help your group understand how the industry will evolve over the next 8 years. d. a five part analysis.

265. For non-advanced marketing module, promotion expenditures reach diminishing returns at

a. about $3M

199. The promotion budget affects:

a. awareness

156. When working with Distributors, each distributor costs

b. $100,000.

211. A new unit of capacity costs $6 for the floor space plus $4 times

b. automation rating.

317. Segment price ranges drop _____ per year.

d. $0.50

157. When working with Outside Sales, each salesperson costs

d. $125,000.

119. If the price/product is $10 and the material cost/product is $2 and the labor cost/product is $3, what is the margin/product?

e. none of the above 10 - (2 + 3) = 5

75. Depreciation is calculated:

e. over a straight line 15-year period.

238. A bond with the number 12.6S2005, indicates that:

e. the interest rate is 12.6%; due on December 31, 2005.

MTBF is measured in

hour increments

36. Pricing plays a role

in the rough cut stage of the purchase decision and in the fine cut stage of the purchase decision.

Customers that want low prices and are willing to sacrifice miniaturization and performance are in the

low end segment

257. Customer Awareness Reports:

c. percentage of Customers who knew about the product.

A segment manager's task is to

verify the products entering and leaving a segment, the margin potential for those products, capacity level and the distribution system as compared to competitors.

266. In the High End Segment, price as a buying criteria accounts for:

b. 9% of decision.

65. How is the strength of the sales channel measured?

b. Accessibility on a scale of 0 to 100%

69. How can assembly lines double their capacity?

b. Add a second shift.

98. How can the R&D cycle time be reduced?

b. Budgeting money to quality initiatives

What is the difference between the market segments at the beginning of the round to the final round?

The fine cuts overlap in the beginning and in year 8 only the rough cuts overlap.

70. If you increase automation from 2.0 to 5.0, the cost is:

a. $12 per unit of capacity.

122. The best case margin potential for a product with a top price of $30 and a minimum cost of goods sold of $15 is:

a. $45. b. $2. c. $450. d. $.50. e. none of the above. <---------

121. The reliability component cost of a product with a 17,000 hour MTBF rating is:

a. $5.10. 17 000 * 0.3 /1 000 = 5.1

201. When investing in web media, diminishing returns apply after

a. $500,000 per product.

114. If your current capacity is 10,000 units and your automation level is 5.0, what is the difference of the investment between doubling your capacity and doubling your automation level?

a. $60,000 10 000* (6+4*5) = 260 000, 10 000 * 4 *(10-5)=200 000, 260 000 - 200 000 = 60 000

162. When investing in print media, diminishing returns apply after

a. $700,000 per product.

82. Your workers go on strike because they have demanded $20/hour and your wage negotiation ceiling is at $18/hour. Assuming that there are no other labor demands, how long will the strike last?

a. 2 weeks

205. If you sell off a production line (capacity and automation), the amount of cash that the company will receive from the sales of capacity will be

a. 65% of the original value.

138. What effects do Process Management Initiatives have?

a. Administrative savings b. Higher production efficiency c. Increase in demand d. Reduction of R&D times

150. This strategy will allow us to maintain a presence in every market segment. Competitive advantage will be gained by keeping R&D costs, Production costs and raw material costs to a minimum, enabling us to compete on the basis of price. We will price below average. We will increase automation levels to improve our margins and to make it acceptable to run second shift/overtime.

a. Broad Cost Leader

276. When the Human Resources module is activated, which areas must be addressed?

a. Complement (number of workers) b. Caliber (recruitment of talent of workers) c. Training (time workers spend in training)

176. This process management initiative reduces R&D cycle time,

a. Concurrent Engineering (CCE)

178. The TQM initiative reduces material costs and labor costs.

a. Concurrent Engineering (CCE)/Six Sigma

84. The Finance Department can use which of the following methods to acquire capital for company activities?

a. Current Debt, Stock Issues, Bond Issues, and Profits

338. What is working capital?

a. Current asset minus current liability

291. Capital used for financing activities can be acquired through_______________.

a. Current debt b. Stock issues c. Bond issues d. Profits

96. The Credit Policy Lag has implications for:

a. Customer survey score. c. Production

139. Your team will make decisions for

a. Marketing. b. Finance. c. Human Resources. d. Production.

340. Which of the following is an important about working capital in Capsim?

a. Emergency loans are closely linked to your working capital policy b. Shows the liquidity situation of your firm c. Can be calculated using numbers from the balance sheet under the headings current assets and current liabilities d. Shows how much equity is in use

299. Which of the following statements is true about promo and sales budget?

a. From one year to the next, a third of those who knew about a product forgot about it. b. If a product ended last year with an awareness of 50%, this year it will start with an awareness of approximately 33%. c. If you have two or more products that meet a segment's fine cut criteria, the sales budget for each product contributes to that segment's accessibility percentage. d. Companies must have at least two products in the segment's fine cut to achieve 100% accessibility.

307. Which module in CAPSTONE allows investment in workforce training?

a. HR

329. Capstone's definition of reach in the marketing module is defined by the potential number of customers who would see the message. Based on this definition what segment has "fair" reach with direct mailing?

a. High End

231. The sales channel effectiveness for the outside sales people is highest for

a. High End and Size.

129. What are the drivers of Material Costs?

a. Higher performance b. Smaller size c. Higher Mean Time Between Failure (MTBF)

236. Which of the following is true about the Accounts Receivable Lag and its implications on customer survey score?

a. If you offer no credit, customer survey score falls to about 60% of maximum.

219. The interest rate on a bond ______ by________ for each______ in the bond rating category.

a. Increases; 0.5%; Decrease

132. What happens to a company when it increases the A/P lag?

a. It improves its cash position. d. Its suppliers withhold material for production.

33. What happens to a product's Perceived Age when it is repositioned in R&D?

a. It is reduced by 50%.

330. Where are the credit policies for customer and supplier set in Capstone.xls?

a. Marketing spreadsheet

298. One way to enter sales forecasts and production schedules is to develop a worst case/best case scenario. Where would you enter your best case scenario and where would you enter your worst case scenario?

a. On the Marketing spreadsheet enter your worst case forecast in Your Sales Forecast cell, and on the Production spreadsheet enter your best case forecast in the Production Schedule cell.

107. Which three customer groups "ride the wave of technology" and are considered to be in the high technology segments?

a. Performance, High End, and Size

208. What is the most important criteria to a "High End Segment" customer?

a. Positioning

209. Size Segment customer consider this buying criteria to be the most important

a. Positioning

275. Customers evaluate the sensor industry based on:

a. Positioning. b. Reliability. c. Age. d. Price.

195. What two factors are considered in both the rough cut and fine cut of the customer buying process?

a. Price and Reliability

Low End customers emphasize buying criteria in which order?

a. Price, Age, Positioning, Reliability

286. Each product can be promoted by

a. Print media. b. Direct mail. c. Web media. d. Trade shows.

337. Which screens are necessary to make a complete human resource decision when the advance module has been activated?

a. Production & human resources

320. Period costs include

a. R&D. b. promotion. c. sales and administration expenses.

90. An AAA rating bond with a given prime rate at r, the bond rating slips to B if the current debt interest rate is charged at

a. R+2.5%

127. Using the R&D Spreadsheet to design your products, you have which of the following projects to choose from?

a. Repositioning b. Invention c. Reliability adjustment

339. What happens if you increase the A/R lag days in the marketing function?

a. Sales forecast increases b. Collection time increases

e. The Negotiation Ceiling is always 10% above the Starting Position.

a. Wage and benefit rates b. Automation levels c. Second shift d. TQM investment

311. What is most likely to happen on introduction of a new product, if you do not buy the production line, in the year prior to the product's introduction?

a. You cannot manufacture your new product.

131. The A/R lag is

a. a marketing spreadsheet definition. b. the accounts receivable lag (in days). c. the time between customers receiving products and when they are expected to pay for them.

85. Your finance department is primarily concerned with

a. acquiring the capital needed for company activities. b. establishing a dividend policy that maximizes the return to shareholders. c. setting credit policies for customers and suppliers. d. profits.

322. If all of the capacity on a production line is sold

a. all remaining inventory is sold for half the average cost of production. b. a loss is written off on the income statement. c. Capstone interprets the action as a liquidation instruction. d. the company will receive a cash payment of 65% the original investment on capacity.

26. The prices in each segment

a. drop by $0.50 each year.

83. In the Human Resources section, workers will strike one week for:

a. every 1% your Annual Raise Negotiation Ceiling is beneath Labor's demand. b. every $300 your Benefits Negotiation Ceiling is beneath Labor's demand. c. every 1% your Profit Sharing Negotiation Ceiling is beneath Labor's demand. d. every $1 your Wage Negotiation Ceiling is beneath Labor's demand.

56. Changing MTBF will:

a. have no impact on Perceived Age.

80. Labor Negotiation includes:

a. hourly wage. b. benefits. c. profit sharing. d. annual raise.

170. Process Management Initiatives

a. improve business procedures, resulting in improved efficiencies and cost structures.

241. Investing in Channel Support Systems can

a. increase demand.

217. The company's negotiation starting position for wages

a. is never more than 150% of the current contract.

288. The turnover rate

a. is the percentage of workers who left the company last year, excluding down-sizing. d. includes unavoidable factors like retirement, relocation and weeding out poor workers (about 5%).

327. Investing more than $5,000,000 in the same TQM initiative over a two or three year period creates

a. little or no additional improvement.

124. In Capstone®, the spreadsheets allow team members to

a. make changes to variables. b. observe the results of changes made to variables.

52. R&D completion time depends on

a. number of projects in R&D. b. automation rating. c. the age of the product.

269. An accessibility of 60% means that ________.

a. only 60% of customers have an easy time finding a product, talking to a salesperson and taking delivery. b. of the customers who cannot easily locate the product, they will seek it out.

130. The marketing spreadsheet is used to set which of the following:

a. prices. b. promotion budgets. c. sales budgets.

240. Investing in Concurrent Engineering can

a. reduce R&D cycle time and lower R&D costs

29. Inside each fine cut circle,

a. segments have an ideal spot where demand is at its highest.

302. The CAPSIM simulation is based on which industry?

a. sensor industry

57. R&D projects can change a product's:

a. size. b. age. c. reliability. d. performance.

123. A point or some points you consider for your strategy are

a. strive to give your customers the top two buying criteria. b. the perceptual map is more important as a rough cut consideration than a fine cut distinction. c. maximize the effectiveness of R&D, to achieve higher demand you must have a substantially better offer, it does not matter how good your product is if you stock out.

146. If a product's Automation rating is substantially increased, it will:

a. take longer to move the product across the Perceptual Map.

328. According to Capstone, Complement is best defined as:

a. the number of workers in your workforce this year.

290. In promo budget of the advanced marketing module, the term "reach" refers to

a. the potential number of customers who would see the advertisement message.

136. Maximum issue is

a. the upper limit in thousands of dollars that teams can issue in stock this year.

134. When going to a new automation level

a. there is a 1 year lag.

125. Each of the spreadsheets

a. work independently. b. depend on values entered in other spreadsheets.

277. A product's __________ does not play a role in the rough cut

age

111. What is the total cost in dollars for adding 1.0 million units of capacity to a production line with an automation level of 1.0 and floor space costs per unit of $6? Assume automation costs per unit of $4.

b. $10 million 1 000 000 (6 +4*1) = 10 000 000

116. As a manager you need to change the automation level of your segment from 2 to 5. The line has a capacity of 2 million. How much would it cost?

b. $24 million 2 000 000 * (5-2) *4 = 24 000 000

112. If you are currently producing 100,000 units and your automation level is 10, how much will it cost you to double your capacity?

b. $4,600,000 100 000 (6 + 4*10) = 4 600 000

25. At what dollar amount above the segment guidelines is all consumer appeal lost?

b. $5

227. Adding one additional unit of capacity costs

b. $6 + ($4 x Current Automation Level).

215. When investing in E-mail, diminishing returns apply after

b. $600,000 per product.

77. If current wages are set at $10/hour, what would be the minimum starting pay that your company would offer?

b. $8/hour

293. Every year the Traditional segment circle drifts ____ in performance and _____ in size.

b. +0.7, -0.7

89. What is your bond rate? The prime rate is 10%; your current bond rating slipped one category (from AAA to AA).

b. 10.5%

160. In only one product segment, diminishing returns for outside sales is reached at

b. 12

292. The inner fine cut circles on the perceptual map have a radius of ________ units.

b. 2.5

251. What is the size of the plant at the start of the simulation?

b. 5 assembly lines with space to add 3 more.

95. You are charged a ____ brokerage fee to issue stock and ____ brokerage fee to retire stock.

b. 5%; 1.5%

305. Account Receivables lag impacts sales. At no credit terms, the customer survey score falls to about ______ % of maximum, at 30 days, the score is _____ %, at 60 days, the score is ______%.

b. 60, 93, 99.3

248. Emergency loans are made at what rate over the normal Current Debt interest rate?

b. 7.5%

218. Labor will strike for a maximum:

b. 84 days.

278. In CapSim, a product's demand is driven by its _________________.

b. Customer Survey Score

187. This strategy will gain competitive advantage by distinguishing our products with an excellent design, high awareness, easy accessibility, and product extenders. We will develop R&D competency that keeps our designs fresh and exciting. Our products will keep pace with the market, offering improved size and performance. We will price above average. We will expand capacity as we generate higher demand in our markets: High, Traditional and Low End.

b. Differentiation Strategy with a Product Life Cycle Focus

222. Which of the following is not a Process Management Initiative available to your company?

b. GEMI Sustainability

281. Which of the following will give your company an AAA bond rating:

b. Have absolutely no debt.

336. Different customer demands impact the drifting speed of the segments such that:

b. High End, Performance and Size drift at a faster rate than the other segments.

164. The potential reach for Trade Shows is rated as good for the

b. High End.

31. Increasing a product's reliability will result in which of the following changes to production costs?

b. Higher material cost

87. Which financial obligation is best satisfied with Bond Issues?

b. Increased production capacity

198. Increasing performance and shrinking size does what to the material cost?

b. Increases

182. Which statement is true?

b. Increases in capacity and changes in automation take a full year to implement. Sales of capacity are immediately effective.

140. Which customer group or market segment seeks proven products using current technology?

b. Low End customers

141. Which customer group or market segment seeks proven products, are indifferent to technological sophistication, and are price motivated?

b. Low End customers

287. Which one of the following statements regarding preferred position in fine cut is false?

b. Low end customers want the high performance and large sized product.

279. The ______________ details sales volume in all segments, reporting each product's actual and potential sales.

b. Market Share Report

332. What is the most important element that ensures the accuracy of the Proformas reports?

b. Marketing sales forecasts

152. This strategy will concentrate on the Traditional and Low End segment. Competitive advantage will be gained by keeping R&D costs, Production costs, and raw materials costs to a minimum, enabling us to compete on the basis of price (low prices). The product will be priced below average and automation levels will be increased to improve contribution margins and make it acceptable to run second shift/overtime.

b. Niche Cost Leader

58. If your team decides to introduce a new product, when should capacity and automation be purchased?

b. One round prior to product release

190. Which market segment places the most importance on reliability?

b. Performance

161. The marketing budget detail sales screen allows companies to allocate their promotion budget to different media channels. These media channels are:

b. Print Media, Direct Mail, Trade Shows, E-Mail, and Web Media.

331. The primary difference between the Proformas and annual reports is:

b. Proformas are projections of results for the upcoming year; annual reports are results from the previous year.

177. These TQM initiatives reduce administrative overhead; reduces the R&D cycle time and enhances the effectiveness of the promotion and sales budget.

b. Quality Function Deployment and Benchmarking

212. A functional manager is responsible for coordinate strategy and tactics across all functional areas of the company exemplified by

b. R&D, Marketing, Production, Finance, Human Resources & TQM.

120. In the Capstone® simulation, what are the components of a product's minimum material cost?

b. Reliability component cost and positioning component cost

126. New products are created on which spreadsheet?

b. Research and Development

232. The potential reach for web media is rated as good for the

b. Size and Performance.

c. High End preferred Position is located in the lower left of the circle.

b. T-Bills

335. In the Perceptual Map each segment has a set of circles where:

b. The inner fine cut circles represent the heart of the segment where demand is strong.

173. This process management initiative reduces material costs and administrative overhead.

b. Vendor/Just-in-Time Inventory (JIT)

171. TQM initiatives

b. improve product quality while reducing the time and resources required to design, manufacture, warehouse and ship products.

245. When purchasing increased Capacity and Automation, the new capacity becomes available

b. in 1 year.

72. If you reduce automation in the production component of Marketing, you will:

b. incur a retooling cost.

117. Rapid movement of an existing product on the Perceptual Map requires

b. low automation levels.

166. The time allocation on the advanced marketing module can be used to

b. make a greater effort by the sales staff which translates into increased demand for that product.

189. The performance segment places more importance on

b. reliability and positioning.

228. How much does it cost for MTBF per 1,000 hours of reliability?

c. $0.30

78. In the current contract, the workers' wage rate is $20.00. Which of the following negotiation positions would be outside the starting and ceiling amounts?

c. $18.00 to $35.00

115. If you are currently producing 100,000 units at an automation level of 5, how much would it cost to maximize automation?

c. $2,000,000 100 000 * 4 *(10 -5) = 2 000 000

263. Diminishing returns for a single year and a single initiative on TQM budgets become noticeable at

c. $2.0M.

91. If your interest rate is 12.1%, and when you issue new bonds, the bond interest rate is:

c. 13.5%.

158. In only one product segment, diminishing returns for distributors is reached at

c. 15

268. In the Traditional Segment, age as a buying criteria accounts for:

c. 47% of decision.

169. The customer survey score is driven by

c. 4Ps.

233. A 6 month project in R&D costs____________; while a 12 month project in R&D costs ________.

c. 500,000; 1,000,000

94. In Capstone® what would the bond number be for a bond with an interest rate of 6.5% that matures in 2003?

c. 6.5S2003

64. Assuming no additional product promotion, what percent of customers, reached through last year's marketing campaign will carry over into the current year?

c. 67%

109. Which of the following questions is answered by the demand analysis?

c. Are the market segments growing at the same rate?

172. This process management initiative reduces material cost and, to a lesser degree, labor costs.

c. Continuous Process Improvement systems (CPI)

149. This strategy attempts to gain a competitive advantage by keeping R&D costs, production costs and raw material costs to a minimum in order to compete on the basis of price. The product life cycle focus will enable sales for many years on each new product introduced into the High End segment. Products will begin their lives in the High End, mature into Traditional and finish as Low End products before they are retired and their assets harvested.

c. Cost Leader with Product Life Cycle Focus

334. Which tool can you use as a quick comparison tool when conducting a competitive analysis concerning production?

c. Customer survey

148. Which of the following is not a primary concern for your Finance Department?

c. Employee turnover

24. What's the measure for product reliability?

c. Expected time a product lasts

295. The cost to increase automation to 8.0 is equal to

c. First Shift Capacity X [$4 X (8 - Automation Level).

323. As a general rule, stock issues are used to:

c. Fund long term investments in capacity and automation.

216. What is a market segment?

c. Group of customers with similar purchasing concerns

142. Which customer group or market segment seeks cutting edge technology in both size and performance?

c. High End customers

258. For positioning in the fine cut, which one is not right?

c. High End preferred Position is located in the lower left of the circle.

242. If the previous year you reached 100% customer awareness in your company, this year what will you need to do to maintain this level?

c. I would only need to create 33% new awareness to maintain 100% this year.

23. What happens to a product priced at $1 above or below the segment guideline when a segment's product supply outstrips demand?

c. It loses 20% of its appeal.

88. What happens to a company when its debt-to-assets ratio increases?

c. Its short term interest rates increase. d. Its bond rating is reduced.

50. The relative cost of a product's material cost increases as:

c. MTBF is raised.

314. How is Contribution Margin calculated?

c. Price - (Material cost + Labor cost)

60. Marketing is concerned with 4 things. What are they?

c. Price, Place, Promotion, and Product

103. Which of the following is an example of a TQM initiative?

c. Quality Function Deployment Effort

303. Your ___________ department controls the performance and size, therefore position of your sensor products within the market.

c. R&D

253. Each round is the equivalent of

c. one year.

210. It takes ______ years to invent a product.

c. at least one year

61. An increase in promotional budgets have:

c. decreasing returns over time.

62. Promotion efforts are subject to

c. diminishing returns.

180. One of the ways of calculating the top product's demand is by

c. divide the top product segment's score by the sum of all other scores in that segment (not counting fringe products).

55. When a product is moved to a new location on the Perceptual Map, the Perceived Age (or Age) is:

c. divided in half.

249. The Ideal Spot

c. drifts at same pace as the segment.

304. Customers go through ________________stage(s) as they make their purchase decisions.

c. fine cut and rough cut

97. Budgeting money to Quality initiative will lead to these outcomes except:

c. increase Labor Costs.

101. Within the Process Management Initiatives, channel support systems

c. increase demand.

285. In the December customer survey, a product would not receive a perfect score of 100 if

c. it had an MTBF at the middle of the expected range.

59. If you purchase production capacity and automation:

c. it is available in the next year.

110. Two points that should be considered in your strategy are

c. it is easy to confuse unit market size with dollar market size.

99. Investing in CPI can

c. reduce material costs and labor costs to a lesser degree.

137. Cash position is

c. the cash position at the beginning of the round and a projection of the cash position at the end of the round.

326. Looking at the production, if the potential bar is lower than the actual,

c. the company picked up sales because other companies under produced.

54. In Capstone®

c. the terms age and perceived age are used interchangeably.

34. The preferred product perceived age for each sector peaks at:

c. zero years for high end and seven years for low end.

202. When investing in Trade Shows, diminishing returns apply after

d. $300,000 per product.

118. If a product's Price was $20, its Material $8, and its Labor $7, the Margin Per Unit would be:

d. $5. 20 - (8 + 7) = 5

310. A perfect product (with 100% awareness) starting with a survey score of 100, what is the survey score if the accessibility rate is only 60%?

d. ((1+accessibility)/2)*base score = 20

289. Workers will not strike approximately 7 days for

d. 1 hour difference in training.

147. There is ______ lag in buying new Capacity and ______ lag in changing Automation.

d. 1 year; 1 year

179. If there are 4 products listed in the Capstone Courier in the traditional segment that have a customer survey scoring of 32, 28, 22 and 14, then the top product's demand would be:

d. 33%.

220. You are charged a ______ brokerage fee to issue bonds and ______ brokerage fee if you retire bonds prior to their maturation date.

d. 5%; 1.5%

204. At the start of the simulation, your production plant has ___lines with room for ____more

d. 5, 3

270. How much higher are second shift wages than the first shift wages?

d. 50 %

79. For Wages, the negotiation Starting Position cannot be less than ____% or more than ____% of the current contract.

d. 80; 150

102. Benchmarking reduces

d. Administrative Cost.

93. You pay no brokerage fee if you:

d. Allow bonds to mature to their due date.

282. Products that are modified through R&D:

d. Are perceived to be half the age as before entering R&D.

267. Companies with this strategy state their vision as follows: Low priced products for the whole industry, our brands offer solid value. Our primary stakeholders and bondholders, customers, stockholders and management.

d. Broad Cost Leader

252. What are the Process Management Initiatives?

d. CPI, UNEP Green, JIT, QIT, Channel Support Systems, Concurrent Engineering

175. This process management initiative increases the effectiveness of the Sales Budget and therefore demand.

d. Channel Support systems

63. What effect do increases in the Promotion Budget have on a product's Awareness?

d. Diminishing returns

284. Which of the following will result in the highest interest rate:

d. Emergency Loan.

113. What is the right formula for capacity investment?

d. Investment = Capacity x [$6 + ($4 x Automation)]

46. The following represent core company activities that must be addressed each year except:

d. Labor Negotiations.

45. Which one is not an area in which Capstone® separates company activities?

d. Logistics

48. In the Marketing Plan, Research and Development addresses all but the:

d. automation of assembly lines.

250. Ideal Spot is particularly important for

d. high technology segments.

68. All of the following are direct implications of hiring a second shift except:

d. increased MTBF.

239. Investing in Quality Function Deployment Effort can

d. reduce R&D cycle time and enhance the effectiveness of the promo and sales Budgets.

226. Investing in Vendor Just In Time can

d. reduce material costs and administrative costs.

104. Within the process management initiatives, concurrent engineering

d. reduces R&D cycle time.

325. Looking at the production, if the potential bar is higher than the actual one,

d. the company under produced and missed sales opportunities.

167. In forecasting, it is not likely that you will take half of the sales unless

d. the price is at the low end of the range and the positioning, age and MTBF are superior.

183. The traditional market segment is expected

d. to make up 27.5% of the electronic sensor market in five years from now.

51. R&D completion time can be shortened

d. when a company takes advantage of existing technology.

151. This strategy will allow us to maintain a presence in every market segment. Competitive advantage will be gained by distinguishing our product with an excellent design, high awareness, and easy accessibility. We will develop an R&D competency that keeps our designs fresh and exciting. Our products will keep pace with the market, offering improved size and performance. The price of the products will be above average and capacity will expand as we generate higher demand.

e. Broad Differentiation

300. Which of the following is not one of the primary concerns in the Finance Department?

e. Deciding promo and sales budget.

223. Which of the following is not one of the five parts to the Situation Analysis:

e. Forecasting Analysis.

301. Which of the following is not the correct yearly drift rate for the corresponding segment?

e. In the size segment performance drifts by -0.7 and size by +1.0.

44. If you are marketing to High End customers, which criteria are most important to them in order of importance?

e. Positioning, Age, MTBF, Price

294. The growth rate for industry demand in the _____ segment is 18.3%.

e. Size

163. The potential reach for E-mail is rated as good for the

e. Size and Performance.

144. Which customer group or market segment seeks advanced technology products that focus on small size?

e. Size customers

306. Do decisions on a product's prices and MTBFs in its segment's rough cut affect the product's demand?

yes

92. Given a prime rate of r and a short term interest rate of r+2.5, is the bond rate for issuing a new bond is equal to (r+3.9%).

yes