Capsim Final
Investing in the same TQM Initiative round after round will create
diminishing returns -With sufficient investment, initiatives will improve processes and quality to the greatest extent possible, however, each initiative will reach a point where no further improvement is possible, therefore the investments create no additional returns.
An increase in promotional budgets has
diminishing returns become apparent at $2 million
The relationship between promotion and sales budgets and sensor sales is generally...
direct one
Teams can eliminate all Recruiting Costs if they wish
false -Teams can choose to enter 0 in the Recruiting Spend cell on the Human Resources screen, however that number is in addition to a base Recruiting Cost of $1,000 per worker. A Recruiting Spend entry facilitates recruiting a better quality of worker.
In a seller's market even pathetic products are snapped up by desperate buyers because...
first shift capacity plus second shift capacity are less than total segment demand
industry newsletter aka
foundation fasttrack
Management should strive to
decrease turnover
When a segment's product supply exceeds demand, how much appeal, to the customer, will a product priced $1 above or below the segment price range lose?
10%
If your short-term interest rate (the rate on your current debt) is 12.1%, then your bond rate (the rate on your long-term debt) is:
13.5% (1.4% higher than the current debt rate)
*If your product's Customer Survey Score in April is 25 and your competitors' scores are 20, 18, 14, 13, and 3, then what is your product's April demand, assuming you have enough inventory to meet the demand?
26.9%
Based on the example in the Student Guide, what additional awareness does a promotion budget of $1,500,000 buy?
36%
Assuming no additional product promotion, what percent of customers, reached through last year's marketing campaign will carry over into the current year?
67%
Suppose your team runs out of cash in the simulation, you will receive a loan. To pay back the loan, you will have to pay one year's worth of current debt interest on the loan and the bank will add a ____% penalty fee on top. How much is the penalty?
7.5
*According to the S-Shaped curve, diminishing returns for a single year budget become significant at
750,000 The S-Shaped curve predicts return on investment. Depending on the slope of the curve, the return on investment can be small or large. For example, suppose a project is budgeted at $250,000. This project might go through a planning stage that produces a set of recommendations, but there is no money left to implement the recommendations. At $500,000, sufficient funds are available to plan, and begin implementing the recommendations. At $750,000, the budget is sufficient to plan and put in place most of the recommendations. At $1,000,000, all of the recommendations have been implemented, and additional money beyond that level has little or no effect.
market segment
A group of customers with similar purchasing concerns
Balance scorecard indicator of unprofitability and a solution
A low score for contribution margin, the company should look at its costs and pricing.
basic Strategy NOT considered
Broad Cost Differentiator Leader with Low Cost Value
The Finance Department can use which of the following methods to acquire capital for company activities?
Current Debt, Stock Issues, Bond Issues and Profits
Assuming the Productivity Index is greater than 100%, adding Overtime will
Decrease productivity index -While the Productivity Index can never fall below 100%, it is possible for teams to increase the Index by investing in a higher quality worker (Recruiting Spend) and in education (Training Hours). However, scheduling Overtime will decrease the Index because workers will become tired and disgruntled.
A change in MTBF
affects material cost
insight
Forecast is important and budgeting for a new product. You have to spend money to make money on a new product. A lot of research has to go into making the product to be profitable.
TQM Report
Foundation fasttrack
What's the measure for product reliability?
How long a product is expected to function
Research the opportunity in the segment in the FastTrack Select appropriate product attributes - Performance, Size, MTBF Display the R&D worksheet. Enter the product attributes Note the R&D completion date Display the Production worksheet Order capacity and automation (optionally, wait a year) Display the Finance worksheet Fund the plant with stock and bond issues
Inventing a new product
Recruiting Costs are incurred when
Production runs increase and teams match hiring to needed complement -Increasing production and then matching the Needed Complement will result in new hires, and therefore increase Recruiting Costs.
Examine the proforma Income Statement Examine the proforma Balance Sheet Display the Finance worksheet Issue or repurchase stock as required Issue or repay bonds as required Issue short term debt as required Issue a dividend as required
Raising money and paying debt
The following are action steps that describe 1 of 6 basic tactics you will use in the simulation. Select the correct answer that the action steps describe. Research current customer buying criteria in the FastTrack Display the R&D worksheet Adjust Performance, Size, MTBF Observe impacts upon Age, material cost, and completion dates Save the decisions
Reposition a product
Estimate a best case for demand for each product this year Display the Production worksheet Observe existing inventory Schedule production to meet best-case demand less existing inventory Save the decisions
Scheduling Production
To discontinue a sensor, you must sell all of the capacity on an assembly line. The simulation will interpret that your team wants to liquidate and will sell your remaining inventory for half the average cost of production. The simulation will write off the loss on your income statement. If you want to sell your inventory at full price, sell all but one unit of capacity.
T
Where is the ideal spot for a product to be located in targeted industry?
The heart of the segment where, all other things being equal, demand is highest.
Which of the following are not considered in the Fine Cut?
automation
promotion budget affects
awareness
When the practice rounds are over (both individual and team) the simulation will be reset so that real competition can begin among the teams. Each management team will take the reins of...
a $40 million company with 1 product
Inside each fine cut circle,_____________.
a. segments have an ideal spot where demand is at its highest.
Which financial obligation is best satisfied with Current Debt?
a/p
If your company has a sales budget of $3 million and drops it to zero, in that year...
accessibility will drop by one third
How can assembly lines double their capacity?
add a second shift
A firm's bond rating slips by 1 category for each ______ in interest.
additional .5%
Increasing Training Hours tends to
both increase and decrease the Needed Complement.
The exact outcome of TQM efforts appear on the TQM Report, and as bar charts on the TQM spreadsheet. These results are for
cumulative for the previous and all remaining rounds (assuming no additional investment is made) -TQM investments take effect the year they are made, and are cumulative, paying off year after year.
Generally, Separation Costs will be incurred when
production levels decrease and/or automation levels increase -The Needed Complement is determined by a combination of: a) the number of units ordered into production; and b) the Automation level of the assembly lines. Decreasing the number of units produced from one year to the next will decrease the Needed Complement. Similarly, increases in Automation will decrease the Needed Complement. If teams adjust the This Year cell to match the Needed Complement, Separation Costs will be incurred.
Which one of the following is NOT one of the four product characteristics that R&D can set?
quality
If a company with low automation wanted to invest in a single area that exclusively lowers labor costs, they would select:
quality initiative training -The TQM area allows teams with an established strategy to invest in areas which will benefit them the most. For example, if a team formulates a strategy that sacrifices labor cost so it can complete R&D projects faster, it would want to invest in QIT, which reduces labor costs.
Age, price and ___________ criteria remain constant from year to year.
reliability
How much do segment prices fall each year?
remain constant
Last year your company built 1,500,000 units of product Able and sold 1,405,000 After 14 months in R&D, a revision of product Able is due out tomorrow, on January 2 (the first business day of this year) What will happen to the unsold inventory of 95,000 units of "old" product Able
reworked to match new product able
If the previous year you reached 100% customer awareness in your company, this year what will you need to do to maintain this level?
scale back to 1,400,000 to maintain awareness
Research the competitive environment in the FastTrack Display the Marketing worksheet Enter decisions for Price, Promotion and Sales Budgets Observe the decision impact upon the computer's forecast Develop a worst-case estimate for demand Enter your worst-case estimate in the sales forecast Save the decisions
Marketing a product
Estimate peak demand for each product for this year and next year Examine unit costs and margins Display the Production worksheet Increase or decrease capacity as required Increase automation as required Observe the net cost of the investment Display the Finance worksheet Fund the investment with a mix of stock issues, bond issues, and depreciation
Modifying plant and equipment
Capital needed for company activities cannot be acquired through:
arbitrarily firing employees
If you sell all of the capacity on a production line, inventory from that line is sold at...
half the avg cost of production
In order to achieve 100% accessibility, a team must:
have two products in same segment
The 2 market segments learned in the Foundation® are the following:
high and low techs
Worker training is entered by the
hour -Hours are entered on the HR Screen. Training costs $20.00 per hour per worker.
If you purchase production capacity and automation:
it is available the next year
The Low segment's ideal spot is _______________________.
near the center of its circle
At the beginning of the simulation, how many assembly lines are there?
one line per company
Production runs can be scheduled in
one or two shifts -Up to twice the production line's First Shift Capacity can be scheduled for each individual product. Production runs that exceed the First Shift Capacity result in either Overtime and/or a Second Shift, depending on the Worker Complement.
If you or your team decides to introduce a new sensor product, when should capacity and automation be purchased?
one round prior to release
What is the minimum amount of time that it takes to invent a new sensor?
one year at least
Hiring the Needed Complement will always eliminate
overtime -Hiring the Needed Complement eliminates all Overtime. The Second Shift workers are paid the same as workers on Overtime, however, Second Shift workers are more efficient and do not seek work elsewhere, therefore reducing turnover.
Which financial obligation is best satisfied with Bond Issues?
paying for increased production capacity
If you are marketing to High Tech customers, which criteria are most important to them in order of importance?
positioning, age, price, MTBF
Increasing Capacity tends to
reduce the number of workers on second shift -Increasing Capacity tends to reduce the number of workers on the Second Shift. As an example, a production order of 1,200 units on a line with a Capacity of 800 units (numbers in thousands) will require 400 units to be produced by the Second Shift. Increasing Capacity to a total of 1,000 units will result in 1,000 units manufactured by First Shift labor, and only 200 units produced by more expensive Second Shift labor.
