CAPSIM EXAM

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

5%, 1.5%

when working with inside sales, each inside salesperson costs

50k

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

low end customers

which customer group or market segment seeks proven products using current technology

low end customers

investing in cpi can

reduce material costs and labor costs to a lesser degree

within the process management initiatives, concurrent engineering

reduces R&D cycle time

what product attributes do performance customers value the most

reliability

the performance segment places more importance on

reliability and positioning

in the capstone simulation, what are the components of a products minimum material cost

reliability component cost and positioning component cost

new products are created on which spreadsheet

research and development

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

short term interest rates increase and bond rating is reduced

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

size segment

cash position is

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

repositioning moves a product on the perceptual map from its old location to a new one. when does the new location become active?

the day the r&d project completes

When plotting the segment locations for each round

the goal is to determine the ideal spot location for each segment during the 8yrs

in forecasting, it is not likely that you will take half of the sales unless

the price is at the low end of the range and the positioning, age, and mtbf are superior

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.

when going to a new automation level

there is a one year lag

the sales channel effectiveness for the distributors is highest for

traditional and low

the potential reach for direct mail is rated as good for the

traditional and low end

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

traditional segment

After you have uploaded your decisions to the website, you can change your official decisions as many times as you want prior to the processing date and time of the round.

true

true or false increases in capacity and changes in automation take a full year to implement. sales of capacity are immediately effective

true

Over time, the segments will drift in which direction on the Perceptual Map?

down; right

The prices in each segment

drop by 50 cents each year

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

higher material cost

what are the drivers of material costs

higher performance, smaller size, high mtbf

MTBF is measured in

hour increments

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

immediately upon completion.

tqm initiatives

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

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

increased mtbf

Which financial obligation is best satisfied with Bond Issues?

increased production capacity

increasing performance and shrinking size does what to the material cost

increases

if you reduce automation in the production component of marketing, you will

incure a retooling cost

what is the formula for capacity investment

investment = capacity x ($6+($4 x automation))

what happens to a company when it increases the A/P lag

it improves its cash position, its suppliers withhold material for production

Two points that should be considered in your strategy are

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

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

it is reduced by 50%

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

labor negotiations

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

$2million 100k x 4 x (10-5)

when investing in trade shows, diminishing returns apply after

$300k per product

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

$400k 100k times 4 = 400k

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?

$5 10-(2+3)=5

if a products prices was $20, its material $8, and its labor $7, the margin per unit would be

$5 20-(8+7)=5

the reliability component costs of a product with a 17,000 hour mtbf raiting is

$5.10 17000 x .3/1000

when investing in web media, diminishing returns apply after

$500k per product

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

$8 a hr

when investing in direct mail, diminishing returns apply after

$800k per product

rapid movement of an existing product on the perceptual map requires

low automation levels

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

0%

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

10

negotiation ceilings which represent the max management is welling to pay are always

10% above the starting positions

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

10.5% 10%+.5%=10.5

in only one product segment, diminishing returns for outside sales is reached at

12

at what rate is inventory carrying cost charged

12%

when working with outside sales, each salesperson costs

125k

the promotion budget affects

awareness

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?

18-35 dollars 80% times 20=16 150% times 20=30

there is a ____ lag in buying new capacity and _____ lag in changing automation

1yr, 1yr

At which point does the perceived age of a traditional product peak?

2 years

when a segments product supply exceeds demand, how much appeal, to the customer, will a product priced $1 above or below the segment price range lose

20%

what is the starting awareness percentage of a new product

25%

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

Current Debt, Stock Issues, Bond Issues, and Profits

this process management initiative reduces labor costs

quality initiative training

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

Positioning, Age, MTBF, Price

Low End customers emphasize buying criteria in which order?

Price, Age, Positioning, Reliability

Marketing is concerned with 4 things. What are they?

Price, Place, Promotion, and Product

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

Products become smaller and smaller.

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

R+2.5%

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.

What are three of the five Segments?

Traditional, Low End, Performance

Each segment places

a different emphasis on features of the 4 buying criteria.

Successful managers will:

a. Create a strategy b. Coordinate company activities c. Analyze the market and its competing products ALL OF THE ABOVE

How can assembly lines double their capacity?

add a second shift

benchmarking reduces

admin cost

you pay no brokerage fee if you

allow bonds to mature to their due date

Capital needed for company activities cannot be acquired through:

arbitrarily firing employees

what is not a buying criteria

automation

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.

broad cost leader

how can the R&D cycle time be reduced

budgeting money to quality initiatives

the automation level

causes you to require more manpower with lower ratings and causes you to require less manpower with higher ratings

this process management initiative increases the effectiveness of the sales budget and therefore demand

channel support systems

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

continuous process improvement systems (cpi)

the products demand is driven by

customer survey

in capstone, pricing standards are set by

customers (market segment)

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

An increase in promotional budgets have:

decreasing returns over time

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

diminishing returns

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

divided in half

the promo par of advanced marketing allows teams to allocate their time based on

each product

what is not a primary concern for your finance department

employee turnover

how many products does every team start with

five

the situation analysis consists of how many parts

five

in order to achieve 100% accessibility, a team must

have at least 2 products in the same segments fine cut

the potential reach for trade shows is rated as good for the

high end

which customer group or market segment seeks cutting edge technology in both size and performance

high end customers

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

high end segment

Reliability" is expressed in terms of:

mean time before failure

MTBF in the segments should be

mtbf (performance)>mtbf (high end) AND mtbf (low end) < mtbf (size)

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

mtbf is raised

traditional ideal spot is

near the center of its circle

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.

niche cost leader

what is the minimum amount of time that it takes to create a new product

one year

the resources used in the sales budget

outside sales, distributors, and inside sales

sales channel effectiveness for inside salespeople is highest for

performance

The two characteristics that the perceptual map evaluates are

performance and size

which customer group or market segment seeks high reliability, advanced technology products that emphasize high performance

performance customers

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

performance, high end, and size

combining size and performance creates a product attribute known as

positioning

What are the top buying criteria that low end customers most value?

price

What is the most important criterion to a "Low End Segment" customer?

price

the marketing spreadsheet is used to set...

prices, promo budgets, sales budgets

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

print media, direct mail, trade shows, email, and web media

age refers to

product age

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?

two weeks

what section of the perceptual map is considered ideal for the low end segment

upper left

this process management initiative reduces material costs and admin overhead

vendor/just in time inventory (jit)

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.

R&D completion time can be shortened

when a company takes advantage of existing technology.

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

workforce complement

The preferred product perceived age for each sector peaks at:

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