Capstone Practice Test
Inventory Carrying Cost is ___% of the average cost of production.
12
What percentage of additional awareness does the second $1,000,000 increase in promotion budget buy?
20%
How much awareness is created by the $250,000 promotion fee when a new product is invented?
50%
What is the starting awareness percentage of a new product?
50%
The average company should double in size every:
6 years.
Assuming no additional product promotion, what percent of customers, reached through last year's marketing campaign will carry over into the current year?
67%
Emergency loans are made at what rate over the normal Current Debt interest rate?
7.5%
Teams can produce up to ______ products.
8
Which customer group or market segment seeks cutting edge technology in both size and performance?
High End customers
Which market segment is less sensitive to price, but more to design?
Performance High end Size (a,b, and c)
The two characteristics that the perceptual map evaluates are
Performance and Size.
What is the most important criteria to a "High End Segment" customer?
Positioning
Which of the following is true?
Traditional segment emphasizes the age criteria. Low End segment emphasized the price criteria. ( only a and b are true.)
Which three factors drive labor cost?
Wage and benefit rates Automation levels Second shift/Overtime costs (b,c,d)
The Perceptual Map is
a marketing tool used to compare products against customer perceptions.
Fast-moving, high tech segments tend to favor:
capacity over increased automation.
The relative cost of a product's Material increases as: Size is ______; Performance is ______; and MTBF is ______.
decreased; increased; raised
EPS (Earning Per Share) is calculated by
dividing net profit by the number of shares outstanding.
Over time, the segments will drift in which direction on the Perceptual Map?
down;right
When a segment's product demand outstrips Supply
product sales can be priced up to $4.90 above the price range without losing sales products lose all appeal at $5 above the price range. (both c and d)
The Traditional ideal spot is
near the center of its circle.
R&D completion time depends on
number of projects in R&D. automation rating. similarity to existing products. (A,B,and C)
How much does it cost for MTBF per 1,000 hours of reliability?
$0.30
If a line has a capacity of 100,000 units, the cost of changing the automation level 1 unit either up or down is
$400,000
If a product's Price was $20, its Material $8, and its Labor $7, the Margin Per Unit would be:
$5.
How is performance scaled?
0 (low performance) to 20 (high performance)
What is the minimum amount of time that it takes to create a new product?
1 year
Which Automation rating requires the longest time to reposition a product?
10
What is your bond rate? The prime rate is 10%; your current bond rating slipped one category (to AA).
11.9%
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? (Hint: $6 for floor space and $4 times automation level.)
13,000,000
If your short-term interest rate is 12.1%, then your bond rate is:
13.5%
What percentage of additional awareness does the first $1,000,000 increase in promotion budget buy?
26%
What percentage of the entire market segment does Low End make up for?
31%
The traditional market segment makes up what percentage of sales, in dollars?
32%
You are charged a ______ brokerage fee to issue bonds and ______ brokerage fee if you retire bonds prior to their maturation date.
5%; 1.5%
What are the three effects of an increase in Automation?
A decrease in labor hours Longer repositioning period in R&D Higher efficiency (a,c,d)
How is the strength of the sales channel measured?
Accessibility on a scale of 0 to 100%
Your finance department is primarily concerned with
Acquiring the capital needed fro company activities. Establishing a dividend policy that maximizes the return to shareholders. Setting credit policies for customer and suppliers. Profits. (all of the above)
How can assembly lines double their output?
Add a second shift
What effects do Process Management Initiatives have?
Administrative savings Higher production efficiency Increase in demand Reduction of R&D times (Correct All of the above)
What is the most important criteria to a "Traditional Segment" consumer?
Age
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
Which of the following is true about the Accounts Receivable Lag and its implications on demand?
At 60 days, demand is 98.5%.
Which of the following are not considered in the Fine Cut?
Automation
Stock price is a function of:
Book value, Earnings per Share, and Dividend.
Marketing is concerned with 4 things. What are they?
Correct Price, Place, Promotion, and Product
Dividends are paid to the stockholders in
Correct quarterly installments at a rate per share that you establish at the beginning of the year.
The Finance Department can use which of the following methods to acquire capital for company activities?
Current Debt, Stock Issues, Bond Issues and Profits
In Capstone©, pricing standards are set by:
Customers (Market Segments)
When a product is moved to a new location on the Perceptual Map, the Perceived Age (or Age) is:
Divided in half.
Increasing performance and shrinking size does what to the material cost?
Increases
What happens to a product priced at $1 above or below the segment guideline when a segment's product supply outstrips demand?
It loses 20% of its appeal.
When tracking market segments on the performance and size perceptual map, which segment moves or "drifts" the slowest?
Low
Which customer group or market segment seeks proven products, are indifferent to technological sophistication, and are price motivated?
Low End customers
MTBF in the segments should be
MTBF (Performance) > MTBF (High End). MTBF (Low End) < MTBF (Size). (only a and c)
If your team decides to introduce a new product, when should capacity and automation be purchased?
One round prior to product release
What is the most important criteria to a "Low End Segment" customer?
Price
What two factors are considered in both the rough cut and fine cut of the customer buying process?
Price and Reliability
Marketing is concerned with 4 things. What are they?
Price,Place, Promotion, and Product
Which three factors drive labor cost?
Production capacity Wage and benefit rates Automation levels Second shift/Overtime costs (Correct b, c, d)
In the Capstone® simulation, what are the components of a product's material cost?
Reliability component cost and positioning component cost
R&D projects can drive a product's:
Size Age Reliability Performance (all of the above)
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
If your company has a sales budget of $3 million and drops it to zero,
accessibility drops to 0% in three years.
The promotion budget affects:
awareness.
How can R&D time be reduced? By:
budgeting money to quality initiatives.
Capacity is sold by
entering a negative number in the Buy/Sell row on the Production Spreadsheet.
When purchasing increased Capacity and Automation, the new capacity becomes available,
in 1 year.
Where is proximity to the Ideal Spot particularly important?
in high technology segments.
Pricing plays a role
in the rough cut stage of the purchase decision. in the fine cut stage of the purchase decision. (in both b and d)
If you purchase production capacity and automation:
it is available in the next year.
What happens to a product's Perceived Age when it is repositioned in R&D?
it is reduced by 50%
A change in MTBF affects:
material cost.
Within the process management initiatives, concurrent engineering
reduces R&D cycle time, the time needed to move products on the perceptual map and change the MTBF specifications.
Inside each fine cut circle,
segments have an ideal spot where demand is at its highest.
If a product's Automation rating is substantially increased, it will:
take longer to move the product across the Perceptual Map.
The higher a company's automation level,
the lower a company's labor costs.
Maximum issue is
the upper limit in thousands of dollars that teams can issue in stock each year.