Policy

How much do segment prices fall each year? $0.50 $1.00 $0.75 Segment price changes vary depending upon relative market demand. Prices remain constant in each segment.

$0.50

At which point does the perceived age of a traditional product peak? 2 1.5 to 2.5 years 7 0.5 to 2 years whenever it's positioned

2

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 The following year the R&D project completes The month the R&D project completes The day capacity and automation is purchased The day capacity is purchased

The day the R&D project completes

What is one draw-back of increasing automation? The product requires Increased time/expense for subsequent short-move repositioning. Operating second shift becomes more expensive. Automation causes large leaps in repositioning. Automation slows production capability. It requires more employees for the production line.

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

Which customer group or market segment seeks proven products using current technology? Traditional customers Low End customers High End customers Performance customers Size customers

Traditional customers

Assuming no additional product promotion, what percent of customers, reached through last year's marketing campaign will carry over into the current year? 33% 50% 67% 0% none of the above

67%

What section of the perceptual map is considered ideal for the low end segment? Middle Upper Right Lower Right Upper Left Lower Left

Upper Left

The promotion budget affects: awareness. brand equity. performance. size. none of the above.

awareness.

In the Capstone® simulation, what are the components of a product's material cost? immediately. in 1 year. in 6 months. in 2 years. none of the above

in 1 year

When purchasing increased Capacity and Automation, the new capacity becomes available, immediately. in 1 year. in 6 months. in 2 years. none of the above

in 1 year.

Inventory Carrying Cost is ___% of the average cost of production. 10 11 12 13 14

12

You are charged a ______ brokerage fee to issue bonds and ______ brokerage fee if you retire bonds prior to their maturation date. 5%; 0% 5%; 1.5% 1.5%; 5% 0%; 5% 5%; 5%

5%; 1.5%

How much awareness is created by the $250,000 promotion fee when a new product is invented? 100% 80% 50% 67% 33%

50%

What is the starting awareness percentage of a new product? 10% 20% 30% 40% 50%

50%

The average company should double in size every: 2 years. 3 years. 4 years. 5 years. 6 years.

6 years

Emergency loans are made at what rate over the normal Current Debt interest rate? 7.5% 10.8% 15% 20.9% 25%

7.5%

Teams can produce up to ______ products. 5 6 9 7 8

8

The two characteristics that the perceptual map evaluates are: Performance and Size. Performance and Price. Size and Price. Reliability and Performance. none of the above.

Performance and Size.

When a segment's product demand outstrips supply: a product's MTBF can go 4,900 hours below the range without affecting sales. 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. both a and b are true. both a and c are true.

both a and c are true.

Fast-moving, high tech segments tend to favor: cost leadership over differentiation. gross margin over margin potential. technology over best practices. best practices over technology. capacity over increased automation.

capacity over increased automation.

An increase in promotional budgets have: increasing returns over time. level returns over time. decreasing returns over time. decreasing then increasing returns over time. increasing then decreasing returns over time

decreasing returns over time.

When a product is moved to a new location on the Perceptual Map, the Perceived Age (or Age) is: not affected. doubled. divided in half. tripled. other.

divided in half

Which of the following is true? Traditional segment emphasizes the age criteria. Low End segment emphasizes the price criteria. High End and Performance emphasizes positioning. All of the above are true. Only a and b are true.

Only a and b are true.

How is performance scaled? 0 (high performance) to 20 (low performance) 0 (low performance) to 20 (high performance) 1 (low performance) to 10 (high performance) 0 (low performance) to 10 (high performance) 1 (low performance) to 20 (high performance)

0 (low performance) to 20 (high performance)

How is the strength of the sales channel measured? Accessibility on a scale of 0 to 50 Accessibility on a scale of 0 to 100% Accessibility on a scale of 1 to 50 Accessibility on a scale of 1 to 100% Accessibility on a scale of 1 to 25

Accessibility on a scale of 0 to 100%

The Finance Department can use which of the following methods to acquire capital for company activities? Current Debt, Stock Issues, Bond Issues and Profits Profits, Current Debt, Withholding Pensions and Stock Issues Liquidating Inventory, Stock Issues, Bond Issues and Profits Credit Lines, Bond issues, Stock Issues and Profits Current Debt, Stock Issues, Bond Issues and cooking the books

Current Debt, Stock Issues, Bond Issues and Profits

What two factors are considered in both the rough cut and fine cut of the customer buying process? Price and Reliability Price and Age Performance and Size Age and Performance Reliability and Performance

Price and Reliability

The economic environment for this simulation game will include: a favorable environment featuring limited growth, high inflation, and reasonable interest rates. a favorable environment featuring modest growth, low inflation, and reasonable interest rates. a highly variable environment featuring significant changes in growth, inflation, and drastic fluctuations in interest rates. a constant environment featuring measurable growth, constant inflation rates, and constant interest rates. economic downturn and other surprises.

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

When a segment's product demand outstrips supply, a product's MTBF can go 4,900 hours below the range without affecting sales. 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. both a and b are true. both a and c are true.

both a and c are true.

Within the process management initiatives, channel support systems: reduce material cost, inventory carrying costs and administrative overhead. reduce labor costs. increase the effectiveness of the sales budget and therefore demand. reduce R&D cycle time, the time needed to move products on the perceptual map and change the MTBF specifications. none of the above.

increase the effectiveness of the sales budget and therefore demand.

Inside each fine cut circle segments have an ideal spot where demand is at its highest. product segments strive to be in the center. product segments strive to be near the boundaries. demand is at its highest as long as product segments are within the circle. none of the above.

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

Labor costs are driven by three factors: wage and benefit rates, second shift, and MTBF. wage and benefit rates, automation levels, and second shift. wage and benefit rates, automation levels, and MTBF. wage and benefit rates, positioning, and second shift. wage and benefit rates, second shift, and material costs.

wage and benefit rates, automation levels, and second shift.

What is the size of the plant at the start of the simulation? 5 assembly lines with space to add 3 more. 5 assembly lines with space to add 2 more. 5 assembly lines with space to add 1 more. 8 assembly lines. 0 - the plan can be built to team specification.

5 assembly lines with space to add 3 more.

Which of the following is true about the Accounts Receivable Lag and its implications on demand? If you offer no credit, demand falls to about 60% of normal. At 30 days, demand is 90%. At 45 days, demand is 95%. At 60 days, demand is 98.5%. At 90 days, demand is 100%.

At 60 days, demand is 98.5%.

What happens to a product priced at $1 above or below the segment guideline when a segment's product supply outstrips demand? It loses 25% of its appeal. It loses 10% of its appeal. It loses 20% of its appeal. It loses 15% of its appeal. None of the above

It loses 20% of its appeal.

When tracking market segments on the performance and size perceptual map, which segment moves or "drifts" the slowest? Low Traditional Size Performance High

Low

The Perceptual Map is: a marketing tool used to compare products against customer perceptions. a marketing tool used to compare performance against size. a marketing tool used to compare reliability against price. a marketing tool used to compare age against position. a marketing tool used to compare time against motion.

a marketing tool used to compare products against customer perceptions.

R&D completion time depends on number of projects in R&D. automation rating. similarity to existing products. size of the product. a, b, and c.

a, b, and c.

If your company has a sales budget of $3 million and drops it to zero: accessibility drops by $1 million every year. awareness drops to zero. accessibility drops to 0% in three years. sales will drop to zero. all of the above.

accessibility drops to 0% in three years.

R&D projects can drive a product's: size. age. reliability. performance. all of the above.

all of the above.

Changing MTBF will: have no impact on Perceived Age. increase Perceived Age. decrease Perceived Age. change Perceived Age. is undetermined.

have no impact on Perceived Age.

In order to achieve 100% accessibility, a team must: have two products in the same segment. have a combined sales budget of $4.0 million. create awareness in the previous year. spend $4 million on distribution channels. none of the above.

have two products in the same segment.

Pricing plays a role when: in the final cut of the purchase decision. in the rough cut stage of the purchase decision. in neither stage of the purchase decision. in the fine cut stage of the purchase decision. in both b and d.

in both b and d.

How much does it cost for MTBF per 1,000 hours of reliability? $0.50 $0.40 $0.30 $0.20 $0.10

$0.30

If you increase automation from 2.0 to 5.0, the cost is: $12 per unit of capacity. $15 per unit of capacity. $9 per unit of capacity. $6 per unit of capacity. Cannot determine with this information.

$12 per unit of capacity.

If a line has a capacity of 100,000 units, the cost of changing the automation level 1 unit either up or down is $4,000. $40,000. $400,000. $400. none of the above

$400,000.

Adding one additional unit of capacity costs: $4 x Automation Level. $6 + ($4 x Automation Level). $6 x Automation Level. $4 + ($6 x Automation Level). none of the above.

$6 + ($4 x Automation Level).

Which Automation rating requires the longest time to reposition a product? 1 3 7 9 10

10

What is your bond rate? The prime rate is 10%; your current bond rating slipped one category (to AA). 11.9% 12.1% 10.5% 11.4% 11.2%

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.) 1,200,000 1,300,000 13,000,000 24,000,000 26,000,000

13,000,000

If your short-term interest rate is 12.1%, then your bond rate is: 10.7% 12.1%. 13.5%. 6.1%. 12%.

13.5

What percentage of additional awareness does the first $1,000,000 increase in promotion budget buy? 15% 20% 26% 44% 56%

26%

What percentage of the entire market segment does Low End make up for? 10% 32% 31% 16% 11%

31%

Products must plot within ______ units from the center of the circle on the Perceptual Map to survive the rough cut. 1.0 2.5 3.0 4.0

4.0

How can assembly lines double their output? Speed up the production. Add a second shift. Double the material. Build more assembly lines. Assembly lines can not be doubled.

Add a second shift.

Benchmarking reduces: Material cost. Research and Development time. Labor Cost. Administrative Cost. Demand.

Administrative Cost.

What is the most important criteria to a "Traditional Segment" consumer?: Price Age MTBF Positioning Performance

Age

Which of the following is not a process management initiative available to your company? Continuous Process Improvement Just-in-Time Channel Support System Concurrent Engineering All are available process management initiatives

All are available process management initiatives

What are the drivers of Material Costs? Higher performance Smaller size Higher Mean Time Between Failure (MTBF) All of the above None of the above

All of the above

What effects do Process Management Initiatives have? Administrative savings Higher production efficiency Increase in demand Reduction of R&D times All of the above

All of the above

Once you upload your official decisions during a round, how many times can you change them before the end of the round? 0 1 2 5 As many times as you want

As many times as you want

Which of the following are not considered in the Fine Cut? Positioning Automation Age Reliability Price

Automation

Stock price is a function of: Book value, Earnings per Share, and Net Profit. Book value, Earnings per Share, and Dividend. Book value, Dividend, and Retained Earnings. Earnings per Share, Dividend, and Retained Earnings.

Book value, Earnings per Share, and Dividend.

In Capstone©, pricing standards are set by: Customers (Market Segments). Competitors. You, The Company. a range of the prices from all Teams. Random Selection.

Customers (Market Segments).

Increasing a product's reliability will result in which of the following changes to production costs? Lower material cost Higher material cost Higher labor costs Lower labor costs Reducing MTBF has no effect on costs of production.

Higher material cost

If the previous year you reached 100% customer awareness in your company, this year what will you need to do to maintain this level? There is nothing to do. I have already reached as much awareness as I could. Spend the same amount of money spent the previous year to reach the same percentage of awareness this year. I would only need to create 33% new awareness to maintain 100% this year. I need to spend at least half of the money spent the previous year to reach 75% of the population. None of the above is relevant.

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

What happens to a product's Perceived Age when it is repositioned in R&D? It is reduced by 50%. It is reduced by 33.3%. It is reduced by 25%. It is reduced by 10%. It remains the same.

It is reduced by 50%

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

Positioning, Age, MTBF, Price

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

Positioning, Age, MTBF, Price

What is the most important criteria to a "Low End Segment" customer? Price Age MTBF Positioning Performance

Price

Which product attribute do Low End customers value the most? Age Price Quality Positioning Time

Price

Marketing is concerned with 4 things. What are they? Price, Reliability, Age, Product Place, Age, Promotion, and Product Price, Place, Promotion, and Product Product, Place, Promotion, and Reliability Innovation, Product, Place and Promotion

Price, Place, Promotion, and Product

Two questions that dominate customers' thinking are: Size and Performance. Reliability and Size. Price and Size. Performance and Reliability. Price and Performance.

Size and Performance

Your finance department is primarily concerned with: 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. all of the above.

all of the above.

Which three factors drive labor cost? Production capacity Wage and benefit rates Automation levels Second shift/Overtime costs b, c, d

b, c, d

When a segment's product demand outstrips Supply: product sales become inelastic. product sales become elastic. product sales can be priced up to $4.90 above the price range without losing sales. products lose all appeal at $5 above the price range. both c and d.

both c and d.

How can R&D time be reduced? By: increasing automation levels. budgeting money to quality initiatives. increasing R&D budget. decreasing product portfolio. none of the above.

budgeting money to quality initiatives

Capacity is sold by entering a zero in the Buy/Sell row on the Production Spreadsheet. entering a negative number in the Buy/Sell row on the Production Spreadsheet. entering a positive number in the Buy/Sell row on the Production Spreadsheet. entering a null value in the Buy/Sell row on the Production Spreadsheet. entering a negative number in the Buy/Sell row on the Marketing Spreadsheet.

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

Within the process management initiatives, channel support systems: reduce material cost, inventory carrying costs and administrative overhead. reduce labor costs. increase the effectiveness of the sales budget and therefore demand. reduce R&D cycle time, the time needed to move products on the perceptual map and change the MTBF specifications. none of the above.

increase the effectiveness of the sales budget and therefore demand.

A change in MTBF affects: age. positioning. material cost. project management. none of the above.

material cost.