BIZ 102 final- Capsim
What should manufacturing production be based on?
Manufacturing production should be based on the forecasted sales, less any previous inventory on hand.
T/F: The financial performance of your company is determined by many things.
true
T/F: Spending in marketing has a direct positive impact on sales.
True
In the long run is automation less costly than people performing the work?
yes
Is forecasting is important to all businesses?
yes
In your simulation's R&D department, you are responsible for setting the specifications for ___, ___, and ___.
performance, size, and reliability
The forecast will directly affect what?
production
Sales = ___ x ___
sales= number or units sold x price
Any inventory on hand should be ___ from our ___ ___ as to not end up with too many units of what we are producing.
subtracted from our current production
The production department is also in charge of what?
The production department is uncharge of determining the appropriate capacity and automation levels.
What happens once a forecast is developed?
The production department needs to ensure that there are enough units ready to be sold.
How can sales be increased?
You can either sell more units at the same price or sell the same number of units at a higher price
How else can profitability be increased?
You can decrease costs while keeping sales constant.
What do you adjust production schedule to?
Adjust production schedule accordingly based on the inventory that I have on hand.
What does capacity determine?
Capacity determines how many units a manufacturing facility is able to produce.
When should capacity be increased?
Capacity should be increased when companies reach or near their maximum production capabilities.
What should companies consider before choosing one method?
Companies should consider all trade-offs before choosing one method.
How do you create awareness?
Complete research and development of your product, then let the world know about it.
How do we get money when we need large improvements or when our cash from operations is not enough?
Corporations can choose to raise capital in any of the following ways: 1) borrowing current debt, 2) issuing long-term debt, 3) issuing stock
Why isn't creating awareness the only important thing?
Customers also want to easily interact with your company to acquire your product (accessibility).
What would happen if a car manufacturer did not advertise their new models or did not partner with dealerships?
Customers wouldn't buy nearly as many of their vehicles
Forecasting is about creating projection of what?
Forecasting is about creating a projection of what we believe will happen in the future.
What happens to inventory on hand?
Inventory that has not yet been sold is being warehoused (stored) by the company.
Once the production department receives the forecast from the marketing department, it can do what?
It can develop a strategy as to how many units should be produced based on the expected demand.
What is one of the issues with automation?
One of the issues with automation is that it can sometimes reduce the ability for customization of processes because retrofitting machinery can be quite expensive and time consuming.
How can you sell more units?
One way is to invest more in marketing through awareness and accessibility.
Proper forecasting should always be developed based on what?
Proper forecasting should always be based on a current situation analysis, past performance analysis, and an understanding of future projected performance.
What comes first, the product or the advertising of the product?
Well, if you have no product, there's nothing to advertise!
How did that inventory on hand come to exist?
When a company does not sell everything that it produces, it has an inventory surplus often referred to as inventory on hand.
What is accessibility?
When customers want to easily interact with your company to acquire your product
An increase or decrease in sales, contribution margin, or profit would have a direct impact of your company's___ ___.
bottom line
There is a direct correlation between having a better product and the ___ of ___ (i.e. direct material costs).
cost of production
Both creating ___ and increasing ___ have a direct positive impact on sales!
creating awareness and increasing accessibility
Issuing stock has no effect on profitability, but can ___ the ___ of outstanding shares.
dilute the value
COGS
direct material, direct labor
Current situation analysis involves determining what opportunities and threats are present due what?
due to industry conditions and/or what your competitors are doing.
T/F: Capacity should be increased unless there is a need for the additional capacity.
false
This means that higher performance, smaller the size (in the context of sensors), and higher reliability would make your direct material costs___ because you have a better product!
higher
___ automation leads to lower labor costs
higher
Adding automation allows companies to not rely on ___ ___ as much, and in the long run automation is much less costly than people performing the work.
human labor
Increasing sales while keeping costs constant would ___ profitability
increase
___ sales while keeping costs ___ would increase profitability
increasing; constant
Relying on debt means that the company has to pay ___ expense which ___ profitability.
interest; reduces
It takes ___ to make ___
it takes money to make money
In general, however, automation leads to ___ ___ ___ and also lower ability for customization of processes.
lower labor costs and lower ability for customization of processes
Lower product performance and reliability would lead to what?
lower material costs.
Does issuing stock have an effect on profitability?
no
Is creating awareness the only important thing in marketing?
no
Current situation analysis involves determining what ___ and ___ are present due to industry conditions and/or what your competitors are doing.
opportunities and threats
Therefore, proper forecasting is based on ___, ___, and ___ ___ performance analysis.
past, present, and expected future performance analysis