In this exercise, you will control Research and Development and reposition a product to target High Tech customers.

After your company purchases capacity, how much time does it take to be able to use the added capacity?

1 year

In this scenario, Production needs to set the production schedule/order to meet the forecasted demand for the product Able. To do so, move the production schedule slider below. Remember, it is important to consider inventory on hand and prepare for the best-case scenario. Marketing has forecasted Able to sell 1,200 units this year. How many units of Able should Production order this year? You currently have 50 units of inventory on hand leftover from last year. Make sure you have enough for the year and some inventory left in case you are able to achieve any extra sales.

1300

In this scenario, R&D is targeting Low Tech customers with the product Acre. Adjust the Reliability slider to meet Low Tech customer's criteria. How would you change Acre's Reliability so that it is more appealing to Low Tech customers?

20,000

In this scenario, Finance needs to raise enough capital to protect against an Emergency Loan. Use the current debt slider below. How can you use financing methods to ensure that you have a healthy closing cash position? This is how much cash you will have at the end of the year if everything goes according to plan. You have invested $6,000 in plant improvements that you have financed through long-term debt. Now you have a closing cash position of 0. You have already issued $4,000 in stock so think about how much more you would need to raise.

3000

In this scenario, Production will be purchasing capacity for Able's production line. Apply the growth rate to your current capacity and move the slider below to generate the capacity needed in the future. How much capacity do you need to buy in order to meet your production schedule for future years? Move your slider to the appropriate answer. You are currently producing 1,400 units for your product Able. Able currently has a capacity of 700, which allows you to produce 700 units of the product in one shift. You can run two shifts for each product line, which allows you to produce 1,400 total units for Able. Additionally, demand for your product is growing. In this case, assume you will grow by at least 10% each year.

800

A conservative approach will price your products below the customer segment's average price point.

False

When a product's positioning (Performance/Size) is updated, what happens to the product's age?

It cuts in half

In this scenario, R&D wants to target High Tech customers with the product Able. Use the Performance and Size sliders below to adjust Able's positioning. Keep in mind that if an R&D project takes over a year to complete it will be locked from making revisions next year, so it is best to make sure the revision completes in the current year

Performance of 8.1 Size of 12.9

What is Contribution Margin defined as in the simulation?

Sales - Variable Costs

Which of the following decisions is NOT made by the Marketing Department?

capacity

Emergency loans are a good option to help finance your company. True or False?

false

the higher the reliability of a product the lower it costs to make. True or False

false

Which of the following decisions can help you raise money for your company?

issue bonds

In this scenario, Finance is facing a negative cash position. Currently the department is both issuing and retiring $6,000 of long-term debt. Use the sliders below to reassess the company's financing decisions and protect against an Emergency Loan. You have invested $6,000 in plant improvements and financed $6,000 Long-Term debt to pay for it. You have also elected to retire $6,000 of Long-Term Debt. Now, your closing cash position reads -$3,000. How can you fix the current financial decisions so that you have a healthy cash position at the end of the year?

retire long term debit $0 issue long term debt $6000

Before you schedule a production order, you should consider your left over inventory from last year. True or False?

true

High Tech customers want cutting edge products that are updated every year. True or False?

true

You can produce twice your capacity by running a full second shift. True or False?

true