Capsim

Your grade on the simulation is based on

cumulative profits, market capitalization, ROE, and ROA

Awareness

- Awareness is the percentage of customers who are familiar with your product; 100% means every customer knew about your product. - Awareness is affected by promotion budgets and time. Awareness declines by one third each year.

Automation costs

4.00 per point of automation, raising automation from 1.0 to 10.0 costs $36.00 per unit of capacity.

STARTING LOW Tech Unit Demand * will always sell more than High Tech

4200

Accessibility

Accessibility is the percentage of customers your salesforce reaches regularly. Accessibility declines by one third (33.3%) each year.

The size and performance that customers desire most is known as the

Ideal cut

Specific decisions made by R&D

Inventing sensors, revisions to size, performance and MTBF of existing sensors, indirectly change a products age.

Decision Screen Icons

Just in Time Information accessed by right clicking on these in the Decision Screens to release a pop-up with more detailed information about decision factors

Starting Awareness (formula)

Last Year's Awareness - (33% x Last Year's Awareness)

Materials costs

MTBF cost + Position Cost

CSS for products outside Fine Cut : Just Beyond

Score drops 1%

CSS for products outside Fine Cut : Halfway Between Fine and Rough Cut

Score drops 50%

CSS for products outside Fine Cut: Just inside Rough Cut

Score drops 99%

Position

Sensors vary in their dimensions (size) and the speed/sensitivity with which they respond to changes in physical conditions (performance). Combining size and performance creates a product attribute called positioning. The preferred size and performance changes each year.

Segment Analysis Reports

The Statistics box in the upper-left corner reports Total Industry Unit Demand, Actual Industry Unit Sales, Segment Percent of Total Industry and Next Year's Growth Rate. The Customer Buying Criteria box ranks the customer criteria within each segment. Actual and potential market share are provided for each company. Products are sorted by the number of units sold in the segment

Two Market Segments

The segments are named for the customer's primary requirements and are called (1) Low Tech and (2) High Tech

CSS for products outside Fine Cut: Outside Rough Cut

Will not sell

The Decision Audit

a complete trail of all team decisions saved. Available on the website by clicking the "Decision Audit" link.

manufacturer of sensors

a device that responds to a physical stimulus (motion, smoke, fire, etc.) or measures a stimulus (such as the amount of heat, pressure, sound, etc.) and transmits a signal indicating that a physical presence exists (such as a motion sensor) or its level (such as a thermometer).

Annual Report

a report detailing your firm's performance at both the company and product levels. Is the only report that provides detailed breakdown of product-level profits (FastTrack does not show product-level profits!).

Front Page

a snapshot of last year's results including sales, profits and cumulative profits for your firm and competitors

Foundation Fastrack

an extensive year-end report of the sensor industry including customer buying patterns, product positioning, public financial records detailing last year's company-level financial performance for all firms, sales, production capacity, automation rates, customer survey scores, and other information.

Production Analysis

detailed information about each product in the market, including sales and inventory levels, price, material and labor costs, revision dates, ages, capacity, and utilization.

the CEO

responsible for coordination across the functions and ensuring all decisions are consistent with the strategy selected

Research & Development (R&D)

setting and revising position (size & performance), and reliability (Mean Time Between Failure / MTBF) for existing and new products; indirectly sets age with changes to position

Once 100% is reached

spending $1,400 million annual on promotion budget will maintain 100% awareness

Stock & Bond Summaries

stock prices, market capitalization, bond ratings and prime interest rates for all companies.

Financial Summary

surveys each company's cash flow, balance sheet and income statements. Does not include product level income statement.

First Shift Capacity

the number of units that can be produced on an assembly line in a single year with a daily eight-hour shift

Factual Information

these are forward looking, but are not estimates; they are factual

The Foundation Spreadsheet

where you formulate and finalize management decisions for every department, accessed via an Internet browser.

LOW tech Growth Rate

10%

STARTING HIGH Tech Unit Demand

1800

Four company areas

Research & Development (R&D), Marketing, Production, and Finance

the acceptable but not desired range in size and performance is known as the

Rough cut

MBTF costs

$0.30 per 1,000 units.

10% accessibility costs

$1,250,000

30% awareness costs

$1,250,000

40% awareness costs

$1,700,000

20% accessibility costs

$1,800,000

Position Costs training edge of LOW Tech

$1.50 / unit

Leading edge of the high tech segment

$10.00 / unit

30% accessibility costs

$2,800,000

Midway between the trailing edge of low tech and the leading edge of high-tec

$5.75 / unit

10% Awareness Costs

$550,000

20% awareness costs

$900,000

5 Team Namess

(Andrews) and the four computer teams of Baldwin, Chester, Digby, and Ferris

HIGH Tech Growth Rate

20%

Utilization Rate

0% Plant produced no units 100% Full first shift was used 200% Both full first and second shifts were used

Age

Age is always perceived age which is cut in half upon any change in the product's size or performance. Each segment has different age expectations, that is, the length of time since the product was invented or revised. High Tech wants new technology while Low Tech prefers proven technology that has been in the market for a few years. The ideal age and range remains constant across the 8 years; see age preferences.

Second shift capacity

An assembly line can produce up to twice (2*) its first-shift capacity by using a second shift.

Accounts Payable - Suppliers become concerned as the lag grows and they start to withhold material for production

At 30 days they withhold 1% At 60 days they withhold 8% At 90 days they withhold 26% At 120 days they withhold 63% At 140 days they withhold everything

Accounts Receivable- the accounts receivable lag impacts the customer survey score

At 90 days there is no reduction to the base score At 60 days the score is reduced 0.7%. At 30 days the score is reduced 7% Offering no credit terms (0 days) reduces the score by 40%

Automation

Automation ranges from 0 (lowest) to 10 (virtually all work done by machines).

Fine Cut Circle

Customers prefer products within this circle, have a radius of 2.5 units

Rough Cut Circle

Customers will not purchase outside product outside boundary, have a radius of 4.0 units.

Price

Each segment has different price expectations. Customers always favor lower prices within the expected range. The price range remains constant across the 8 years. Sensors priced $10.00 above or below the segment guidelines will not be considered for purchase. Those products fail the price rough cut.

Drift Rates

Each year, customers demand increased performance (Pfmn) (i.e., higher values) and decreased (i.e., smaller values) size. This is known as the drift rate. The drift rates are different for each segment, are constant for each of the eight rounds, and are as follows

the preferred range in size and performance

Fine cut

Position Cost per unit (formula)

Material Cost per unit - MTBF Cost per unit

Low Tech Drift Rates

Performance +.5 Size -.5

High Tech Drift Rates

Performance +.7 Size -.7

Ideal Spots HIGH TECH

Performance +1.4 Size -1.4 Description : Lower right corner at leading edge

Ideal Spots LOW TECH

Performance 0 Size 0 Description: Segment Center

STARTING Segment Centers LOW tech (can be calculated with drift rates)

Performance 4.8 Size 15.2

STARTING Segment Center HIGH Tech (can be calculated with drift rates)

Performance 6.0 Size 14.0

Low Tech Segment Buying Criteria

Price 15-35 Age 3 MBTF 14000-20000 Ideal Position Segment Center

High Tech Segment Buying Criteria

Price 25-45 Age 0 MBTF 17000-23000 Ideal Position Leading Edge

Marketing

Price, sales (awareness) and promotion (accessibility), Accounts receivable (A/R) and accounts payable (A/P) lag, and company's sales forecast

Production

Production schedule, buying and selling capacity, setting automation level, A/P lag

Production (2)

Production sets how many units are to be produced for the current year and adds capacity and automation for the following year

The Market Share Actual vs. Potential Chart

displays two bars per company. The actual bar reports the market percentage each company attained in the segment. The potential bar indicates what the company deserved to sell in the segment. If the potential bar is higher than the actual, the company under produced and missed sales opportunities. If the potential is lower than the actual, the company picked up sales because other companies under produced and stocked out (ran out of inventory).

Industry Conditions Report

factual information / parameters about the beginning business environment, including customer buying criteria, segment drift rates and ideal spots, and segment demand and growth rates

MTBF (Mean Time Before Failure)

is a rating of reliability (not overall quality!) measured in hours, it is the number of hours a product is expected to operate before it malfunctions. Customers prefer products towards the top of the range. The MTBF range remains constant across the 8 years. • A product loses about 10% appeal with every 500 units of MTBF above or below the range.

Finance

issue and retire stock, set dividend, borrow current debt, issue and retire long-term debt, and set A/R and A/P lag

New Products Awareness

launch with 25% awareness + any promotional spending budgeted

Automation & R&D - the time required for a one unit change in size or performance at automation level of ___ requires _____:

level 1 .5 years level 5 .6 years level 10 1.4 years

To reach 100% accessibility

must have two products in the same segment

Proformas

projections for the upcoming year; these are estimates of future results based on your saved decisions help you envision the impacts of your pending decisions and sales forecasts

The Top Products in Segment

reports, sorted in descending order of total sales. Shows: Market Share, Units Sold to Segment, Revision Date, Stock Out indicator, Performance and Size coordinates, Price, MTBF, The product's Age on December 31, Promotion and sales budgets, Awareness and Accessibility levels, and Customer Survey Score.