SBP

Inventory Carrying Cost is ____% of the average cost of production.

12

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

2

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 product up to ____ products:

8

What is a market segment?

Group of customers with similar purchasing concerns.

Changing MTBF will

Have no impact on Perceived Age

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

Have two products in the same segment

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

Higher material cost

Which market segment places the most importance on reliability?

Performance

Which marketing segment places the most importance on reliability?

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

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

Positioning

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

Positioning, Age, MTBF, Price

When plotting the segment locations for each round:

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

The higher a company's automation level,

The lower a company's labor costs

What is one draw-back of increasing automation?

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

Maximum issue is:

The upper limit in thousands of dollars that teams can issue in stock each year.

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

Traditional customers

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

Upper Left

What are defensive tactics:

Usually takes place in the firm's own current market position as a defense against possible attack by a rival.

Labor costs are driven by three factors:

Wage and benefit rates, automation levels, and second shift

What is implementation:

Without direction, people tend to do their work according to their personal view of what tasks should be done, how and in what order.

R&D completion time depends on:

a, b, c (number of projects in R&D, automation rating, and similarity to existing products)

Which market segment is less sensitive to price, but more to design?

a, b, c (performance, high end, and size)

What are the three effects of an increase in Automation?

a, c, d (a decrease in labor hours, longer repositioning period in R&D, higher efficiency)

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

$0.30

How much do segment prices fall year?

$0.50

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

$12 per unit of capacity

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

$5

Adding one additional unit of capacity costs:

$6 + ($4 x Automation Level)

What are benefits of being socially responsible

- May enable firm to charge premium prices and gain brand loyalty - May help generate enduring relationships with suppliers and distributors - Can attract outstanding employees - Can utilize the goodwill of public officials for support in difficult times

Governance Sarbanes-ox brought in:

- To protect shareholders from excesses and failed oversight of boards of directs - Improved corporate financial statements

Reasons people act unethically:

- Unaware that behavior is questionable - Lack of standards of conduct - Different cultural norms and values - Behavior-based or relationship-based governance systems - Different values between business people and stakeholders

Carroll's model of responsibilities (3):

-Ethical Responsibilities - Follow the generally held beliefs about behavior in a society

What are defensive tactics:

-Raise structural barriers -Increase expected retaliation -Lower the inducement for attack

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

What are stages of evaluation and control process:

1. Determine what to measure 2. Establish predetermined standards 3. Measure performance 4. Does performance match standards 5. Take corrective action

Different CEOs and roles they play:

1. The CEO articulates a strategic vision for the corporation. 2. The CEO presents a role for others to identify with and to follow. 3. The CEO communicates high performance standards and also show confidence in the followers' abilities to meet these standards.

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%

The Ideal Spot:

Drifts at same pace as the segment

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%

Products must plot within ____ units from the center of the circle on the Perceptual Map to survive the rough cuts.

4.0

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

400,00

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

5 assembly lines with space to add 3 more.

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

5%; 1.5%

Capacity is sold by:

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

The economic environment for this simulation game will include:

A favorable environment featuring modest growth, low inflation, and reasonable interest rates.

The perceptual Map is:

A marketing tool used to compare products against customer perceptions.

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

Accessibility drops to 0% in three years.

How is the strength of the sales channel measured?

Accessibility on a scale of 0 to 100%

How can assembly lines double their output?

Add a second shift

Benchmarking reduces

Administrative Cost

Which of the following is not a process management initiative available to your company?

All are available process management initiatives

Carroll's model of responsibilities (1):

Economic Responsibilities - Product goods and services of value to society so that the firm may repay its creditors and increase the wealth of its shareholders.

Your finance department is primarily concerned with:

All the above (Acquiring the capital needed for company activities. Establishing a dividend policy that maximizes the return to shareholders. Setting credit policies for customers and suppliers. Profits)

What effects do Process Management Initiatives have?

All the above (administrative savings, higher production efficiency, increase in demand, reduction of R&D times

R&D projects can drive a product's:

All the above (size, age, reliability, and performance.)

What are the drivers of Material Costs?

All the above. (Higher performance. Smaller size. Higher Mean Time Between Failure (MTBF))

Which of the following is true about the Accounts Receivable Lag and its implications on demand?

At 60 days, demand is 98.5%

The promotion budget affects:

Awareness

Stock price is a function of:

Book value, Earnings per Share, and Dividend.

When a segment's product demand outstrips supply,

Both a and c are true. (a product with an MTBF 1,000 hours below the segment guideline loses about 20% of its appeal. & at 5,000 below the range, products will lose all appeal.)

When a segment's product demand outstrips Supply:

Both c and d (product sales can be priced up to $4.90 above the price range without losing sales. Products lost all appeal at $5 above the price range.)

How can R&D time be reduced? By:

Budgeting money to quality initiatives

Fast-moving, high tech segments tend to favor:

Capacity over increased automation

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 (Marketing Segments)

An increase in promotional budgets have:

Decreasing returns over time

Carroll's model of responsibilities (4):

Discretionary Responsibilities - Purely voluntary obligations a corporation assumes

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

Divided in half

EPS (Earning Per Share) is calculated by:

Dividing net profit by the number of shares outstanding.

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

Down; Right

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

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

Role corp culture plays in strategy:

If a strategy is incompatible with a company's corporate culture, the likelihood of its success is very low. Foot-dragging and even sabotage will result as employees fight to resist a radical change in corporate philosophy. - Strong cultures are resistant to change. - Optimal culture supports mission and strategies. - Management must evaluate what a particular change in strategy means to the corporate culture, assess whether a change in culture is needed and decide whether an attempt to change the culture is worth the likely costs.

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

Immediately upon completion.

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

In 1 year

Pricing plays a role:

In both b and d

Where is proximity to the Ideal Spot particularly important?

In high technology segments

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

Increase Labor Costs

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

Increases

What is implementation:

Involves leading and coaching people to use their abilities and skills most effectively and efficiently to achieve organizational objectives.

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%

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

Carroll's model of responsibilities (2):

Legal Responsibilities - Defined by governments in laws that management is expected to obey.

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

Rapid movement of an existing product on the Perceptual Map requires:

Low automation levels.

A change in MTBF affects:

Material Cost

The Traditional ideal spot is:

Near the center of its circle.

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

One round prior to product release

Which of the following is true?

Only a and b are true. (Traditional segment emphasizes the age criteria. Low End segment emphasized the price criteria)

MTBF in the segments should be:

Only a and c

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

Price

Which product attribute do Low End customers value the most?

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

Customers go through a two-stage buying process: The Rough Cut and the Fine Cut. In the Rough Cut, buyers focus on four product characteristics. Which one of the following is NOT one of these four product characteristics?

Quality

Dividends are paid to the stockholders in:

Quarterly installments at a rate per share that you establish at the beginning of the year.

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.

In the Capstone Simulation, what are the components of a product's material cost?

Reliability component cost and positioning component cost

Inside each fine cut circle,

Segments have an ideal spot where demand is at its highest.

Two questions that dominate customers' thinking are:

Size and Performance

What has to be aligned for organizational performance:

Strategy, structure, and the environment

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

Take longer to move the product across the Perceptual Map

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.

Which three factors drive labor cost?

b, c, d (wage and benefit rates, automation levels, and second shift/overtime costs)

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

c, d

Know continuum of corporate governance:

{Low to High} -Phantom: never knows what to do, if anything; no degree of involvement. -Rubber Stamp: Permits officers to make all decisions. It votes as the officers recommend on action issues. -Minimal Review: Formally reviews selected issues that officers bring to its attention. -Nominal Participation: Involved to a limited degree in the performance or review of selected key decisions, indications, or programs of management. -Active Participation: Approves questions, and makes final decisions on mission, strategy, policies, and objectives. -Catalyst: Takes the leading role in establishing and modifying the mission, objectives, strategy, and policies.