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CAPSIM Exam

Terms in this set (191)

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When opening the Excel version of capstone, you should do what to Macros?
The product with 100% accessibility will outsell the other 2 to 1 providing all other attributes are identical
If there are two identical products, one that has 100% accessibility and one that has 0% accessibility then
5 products
How many products does every team start with?
traditional, low end, high end, size, performance
What are the 5 segments?
verify the products entering and leaving a segment, the margin potential for those products, capacity level and the distribution system as compared to competitors
A segment managers task is to
The fine cuts overlap in the beginning and in year 8 only the rough cuts overlap
What is the difference between the market segments at the beginning of the round to the final round?
Create strategy, coordinate company activities and analyze the market and its competing products
Successful managers will
True
T/F: After you have uploaded your decisions to the website you can change your official decisions as many times as you want prior to the processing date and time of the round
Products become smaller and smaller
What trend can be explicitly observed in the industry in which your company is operating
0%
On the Perceptual Map, the percentage of customers interested in a product positioned outside of the rough cuts of that product is
hour increments
MTBF is measured in
low end segment
Customers that want low prices and are willing to sacrifice miniaturization and performance are in the
Size Segment
Customers that want small products and are willing to sacrifice performance are in the
Customers (market segment)
In Capstone, pricing standards are set by
Mean Time Before Failure
"Reliability" is expressed in terms of
Performance and Size
The two characteristics that the perceptual map evaluates are
The perceptual map
A marketing tool used to track the position of all the company's products against those of its competitors
customers want smaller and faster products
The segments all drift to the lower-right section of the perceptual map. Why does this drift take place?
down; right
Overtime, the segments will drift in which direction of the perceptual map?
Low end
When tracking markets segments on the performance and size perceptual map, which segment moves or "drifts" the slowest?
It loses 20% of its appeal
What happens to a product priced at $1 above or below the segment guideline when a segments product supply outstrips demand?
Expected time a product lasts
What's the measure for product reliability?
$5
At what dollar amount above the segment guidelines is all consumer appeal lost?
drop by 50 cents each year
The prices in each segment
MTBF (performance) > MTBF (high end)
MTBF (low end) < MTBF (size)
MTBF in the segments should be
segments have an ideal spot where demand is at its highest
Inside each fine cut circle,
near the center of its circle
The traditional ideal spot is
Higher material cost
Increasing a products reliability will result in which of the following changes to production cost?
Product Age
Age refers to
It is reduced by 50%
What happens to a products Perceived Age when it is repositioned in R&D?
zero years for high end and seven years for low end
The preferred product perceived age for each sector peaks at
2
At which point does the perceived age of a traditional peak?
in the rough cut stage of the purchase decision and in the fine cut stage of the purchase decision
Pricing plays a role
Price
What are the top buying criteria that low end customers most value?
price, age, positioning and reliability
Low end customers emphasize buying criteria in which order?
Low end
Which market segment places the most importance on price?
positioning, age MTBF and price
If you are marketing to high end customers, which criteria are most important to them in order of importance?
immediately upon completion
When an R&D effort started in 2001 completes on September 15, 2002, the project revision kicks in when?
MTBF is raised
The relative cost of a product's material cost increases as:
when a company takes advantage of existing technology
R&D completion time can be shortened
number of projects in R&D, automation rating, and age of the project
R&D completion time depends on
10
Which Automation rating requires the longest time to reposition a product?
Age; Perceived Age
The terms ___ and ____ are used interchangeably in Capstone
Divided in half
When a product is moved to a new location on the Perceptual Map, the perceived age (or Age) is:
have no impact on perceived age
Changing MTBF will:
size, reliability, age and performance
R&D projects can change a products:
one round prior to product release
If your team decides to introduce a new product, when should capacity and automation be purchased?
it is available in the next year
If you purchase production capacity and automation:
price, place, promotion and product
Marketing is concerned with 4 things what are they?
decreasing returns overtime
An increase in promotional budgets have:
Diminishing returns
What effect do increases in the promotion budget have on a products awareness?
67%
Assuming no additional product promotion, what percent of customers, reached through last year's marketing campaign will carry over into the current year?
Accessibility on a scale of 0 to 100%
How is the strength of the sales channel measured?
3
If you drop your sales budget to zero, accessibility drops to 0% in how many years?
accessibility drops to 0% in 3 years
If your company has a sales budget of 3 million and drops it to zero,
add a second shift
How can assembly lines double their capacity?:
the product requires increased time/expense for subsequent short-move repositioning
What is one drawback of increasing automation?
$12 per unit of capacity
If you increase automation from 2.0 to 5.0, the cost is:
incur a retooling cost
If you reduce automation in the production component of marketing, you will:
13,000,000
If you want to add 50,000 units of capacity to an assembly line with an automation rating of 5, how much will it cost?
400,000
If a line has a capacity of 100,000 units, the cost of changing the automation level 1 unit either up or down is
over a straight line 15-year period
Depreciation is calculated:
wage and benefit rates, automation levels, second shift/overtime costs
Which three factors drive labor cost?
$8/hour (80% x 10)
If current wages are set at $10/hour, what would be the minimum starting pay that your company would offer?
$18 to $35 (80% x 20=16; 150% x 20=30)
In the current contract, the workers wage rate is $20.00 what negotiation position would be considered outside the starting and ceiling amounts?
80;150
For wages, the negotiation starting position cannot be less than ___% or more than ____% of the current contract
hourly wage, benefits, profit sharing and annual raise
Labor negotiation includes:
All strike settlements should be halfway between the demand and the negotiation ceiling
To run perfectly, all HR department managers should know that
current debt, stock issues, bond issues and profits
The Finance Department can use which 4 methods to acquire capital for company activities?
acquiring the capital needed for company activities, establishing a dividend policy that maximizes the return to shareholders, setting credit policies for customers and supplies and profits
Your Finance Department is primarily concerned with
arbitrarily firing employees
Capital needed for company activities cannot be acquired through:
Increased production capacity
Which financial obligation is best satisfied with Bond Issues?
it's short term interest rates increase and its bond rating is reduced
What happens to a company when its debt-to-assets ratio increases?
10.5% (10% + 0.5%=10.5%)
What is your bond rate? The prime rate is 10% your current bond rating slipped one category (from AAA to AA)
R + 2.5%
An AAA rating bond with a given prime rate at r, the bond rating slips to B if the current debt interest rate is charged at
True (r+2.5%+1.4%=r+3.9%)
T/F: Given a prime rate of r and a short term interest rate of r+2.5, the bond rate for issuing a new bond is equal to (r+3.9%)
allow bonds to mature to their due date
You pay no brokerage fee if you
6.5S2003
In Capstone, what would the bond number be for a bond with an interest rate of 6.5% that matures in 2003?
5%;1.5%
You are charged a _____ brokerage fee to issue stock and ______ brokerage fee to retire stock
customer survey score and production
The credit policy lag has implications for:
increase Labor cost
Budgeting money to Quality initiative will lead to these outcomes except
budgeting money to quality initiatives
How can the R&D cycle time be reduced?
reduce material costs and labor costs to lesser degree
Investing in CPI can
reduce labor and material costs
Investing in CEE/Six Sigma can
increase demand
Within the process management initiatives, channel support systems
Administrative costs
Benchmarking reduces
Quality Function Deployment Effort
Which of the following is an example of a TQM initiative?
reduces R&D cycle time
Within the process management initiatives, concurrent engineering
5
The situational analysis consists of ____ parts
Situational Analysis
A team exercise, designed to help your group understand the current market conditions, designed to help your group understand how the industry will evolve over the next 8 years and a 5 part analysis
performance, high end, and size
Which three customer groups "ride the wave of technology" and are considered to be in the high technology segments?
the goal is to determine the ideal spot location for each segment during the 8 years
When plotting the segment locations for each round
It is easy to confuse unit market size with dollar market size
Two points that should be considered in your strategy are
$10 million; (1,000,000)*(6+4•1);
What is the total cost in dollars for adding 1.0 million units of capacity to a production line with an automation level of 1.0 and floor space costs per unit of $6? Assume automation costs per unit of $4.
Investment=capacity•[$6+($4xautomation)]
What is the right formula for capacity investment?
low automation levels
Rapid movement of an existing product on the perceptual map requires
$5; 20-(8+7)
If a products price was $20, its material $8, and it's labor $7, the Margin per unit would be:
reliability component cost and positioning component cost
In the Capstone simulation, what are the components of a products minimum material cost?
work independently and depend on values entered in other spreadsheets
Each of the spreadsheets
research and development
New products are created on which spreadsheet?
repositioning, invention and reliability adjustment
Using the R&D spreadsheet to design your products, you have which of the following projects to choose from?
1 year
What is the minimum amount of time that it takes to create a new product?
higher performance, smaller size and higher MTBF
What are the drivers of material cost?
prices, promotion budgets and sales budgets
The marketing spreadsheet is used to set
It improves its cash position and its suppliers withhold material for production
What happens to a company when it increases the A/P lag?
causes you to require more man power with lower ratings, and causes you to require less man power with higher ratings
The automation level
there is a 1 year lag
When going to a new automation level
10% above the starting positions
Negotiation ceilings which represent the maximum management is willing to pay are always
the upper limit in thousands of dollars that teams can issue in stock this year
Maximum issue
administrative savings, higher production efficiency, increase demand and reduction of R&D times
What effects do process management initiatives have?
marketing, finance, human resources and production
Your team will make decisions for
traditional customers
Which customer group or market segment seeks proven products using current technology?
low end customers
Which customer group or market segment seeks proven products, are indifferent to technological sophistication and are price motivated?
high end customers
Which customer group or market segment seeks cutting edge technology in both size and performance?
performance customers
Which customer group or market segment seeks high reliability and advanced technology products that emphasize high performance?
size customers
Which customer group or market segment seeks advanced technology products that focus on small size?
the day R&D project completes
Repositioning moves a product on the Perceptual Map from its old location to a new one. When does the new location become active?
take longer to move the product across the perceptual map
If a product's automation rating is substantially increased, it will:
employee turnover
Which of the following is not a primary concern for your finance department?
outside sales, distributors and inside sales
The resources used in the sales budget are
$50,000
When working with inside sales, each inside salesperson costs
$100,000
When working with distributors, each distributor costs
$125,000
When working with outside sales, each salesperson costs
15
In only one product segment, diminishing returns for distributors is reached at
30
In only one product segment, diminishing returns for inside sales is reached at 30
12
In only one product segment, diminishing returns for outside sales is reached at
size and performance
The potential reach for E-mail is rated as good for the
High end
The potential reach for Trade Shows is rated as good for the
make a greater effort by the sales staff which translates into increased demand for that product
The time allocation on the advanced marketing module can be used to
the price is at the low end of the range and the positioning, age and MTBF are superior
In forecasting, it is not likely that you will take half of the sales unless
process management initiative
Improves business procedures, resulting in improved efficiencies and cost structures
TQM initiatives
Improve product quality while reducing the time and resources required to design, manufacture, warehouse and ship products
continuous process improvement system (CPI)
This process management initiative reduces material cost and to a lesser degree, labor costs
Vendor/Just-In-Time Inventory (JIT)
This process management initiative reduces material costs and administrative overhead
Quality initiative training (QIT)
This process management initiative reduces labor costs
Channel support systems
This process management initiative increases the effectiveness of the sales budget and therefore demand
concurrent engineering (CCE)
This process management initiative reduces R&D cycle time
Quality Function Deployment and Benchmarking
These TQM initiatives reduce administrative overhead; reduces the R&D cycle time and enhances the effectiveness of the promotion sales budget
concurrent engineering (CCE)/Six Sigma
The TQM initiative reduces material and labor costs
33%
If there are 4 products listed in the Capstone Courier in the traditional segment that have a customer survey scoring of 32, 28, 22 and 14 then the top products demand would be
positioning
Combining size and performance creates a product attribute known as
True
T/F: Increases in capacity and changes in automation take a full year to implement. Sales of capacity are immediately effective.
to make up 27.5% of the electronic sensor market in 5 years from now
The traditional market segment is expected
Traditional and low
The sales channel effectiveness for the distributors is highest for
$800,000 per product
When investing in direct mail, diminishing returns apply after
Traditional and Low End
The potential reach for direct mail is rated as good for the
differentiation strategy with a product life cycle focus
This strategy will gain competitive advantage by distinguishing our products with an excellent design, high awareness, easy accessibility, and product extenders. We will develop R&D competency that keeps our designs fresh and exciting. Our products will keep pace with the market, offering improved size and performance. We will price above average. We will expand capacity as we generate higher demand in our markets: High, Traditional and Low End.
performance
Sales channel effectiveness for inside salespeople is highest for
reliability and positioning
The performance segment places more importance on
performance
Which market segment places the most importance on reliability?
reliability
What product attributes do performance customers value the most?
12%
At what rate is inventory carrying cost charged?
traditional segment
Customers that want proven products and current technology of moderate size and performance are in the
high end segment
customers that are willing to pay for products with cutting edge technology that are fast performing and small in size are in
price and reliability
What 2 factors are considered in both rough and fine cut of the customer buying process?
20%
When a segments product supply exceeds demand how much appeal, to the customer, will a product priced at $1 above or below the segment price range lose?
Upper left
What section of the perceptual map is considered ideal for the low end segment?
Increases
Increasing performance and shrinking size does what to material cost?
awareness
The promotion budget affects
25%
What is the starting awareness percentage of a new product?
$500,000 per product
When investing in web media, diminishing returns apply after
$300,000 per product
When investing in trade shows, diminishing returns apply after
have a least two products in the same segments fine cut
In order to achieve 100% accessibility, a team must:
5,3
At the start of the simulation, your production plant has ____ lines with room for ____ more
65% of the original value
If you sell off a production line, the amount of cash that the company will receive from the sales of capacity will be
12%
Inventory carrying cost is ____% of the average cost of production
age
Traditional customers consider this buying criteria to be the most important
positioning
What is the most important criteria to a "high end segment" customer?
positioning
Size segment customer consider this buying criteria to be the most important
at least 1 year
It takes ____ years to invent a product
automation rating
A new unit of capacity costs $6 for the floor space plus $4 times
R&D, marketing, production, finance, HR and TQM
A functional manager is responsible for coordinate strategy and tactics across all functional areas of the company exemplified by
age
Which of the following buying criteria does not have a rough cut
$600,000 per product
When investing in E-mail, diminishing returns apply after
market segment
Group of customers with similar purchasing concerns
is never more than 150% of the current contract
The company's negotiation starting position for wages is
84 days
Labor will strike for a maximum of
Increases;0.5%;decreases
The interest rate on a bond ___ by ___ for each ___ in the bond rating category
dividing net profit by the number of shares outstanding
EPS is calculated by
GEMI Sustainability
Which of the following is not a process management initiative available to your company
forecasting analysis
Which of the following is not one of the 5 parts of the situation analysis
decrease labor costs
Quality initiative training can
reduce material costs and administrative costs
Investing in vendor just in time can
$0.30
How much does it cost for MTBF per 1,000 hours of reliability
Negotiation ceiling is always 10% above the starting position
How are the starting position and negotiation ceiling related?
500,000; 1,000,000
A 6 month project in R&D costs _____; while a 12 month project in R&D costs _____
traditional and low end
The potential reach for print media is rated as good for the
Book value, earning per share and dividend
Stock price is a function of:
26%
If your company offers 90 days account payable policy suppliers will start to withhold material for production at
the interest rate is 12.6% due on December 31, 2005
A bond with the number 12.6S2005, indicates that
reduce R&D cycle time and lower R&D costs
Investing in concurrent engineering can:
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