CapSim Exam

Industry Conditions ReportOutlines the beginning business environment, including customer buying criteria.
Capstone CourierExtensive year end report of the sensor industry. Includes customer buying patterns, product positioning, and public financial records.
ProformasProjections for the upcoming year.
Annual ReportsResults from the previous year.
What are the four main departments/functional areas?R&D, Marketing, Production, Finance
Functions of the R&D departmentDesigns the product line, needs to invent and revise products according to customer’s needs.
Functions of the Marketing departmentPrices and promotes products, interacts with customers via its sales force and distribution system. Also responsible for sales forecasts.
Functions of the Production departmentDetermines how many unites will be manufactured during the year, also responsible for buying and selling production lines.
Functions of the Finance departmentMakes sure the company has the financial resources it needs to run through the year,can raise money via one-year bank notes, 10-year bonds, or stock issues.
Decision AuditComplete trail of all team decisions. It will help identify your decision-making strengths and weaknesses.
What are the five industry segments?Traditional, Low End, High End, Performance, Size
What are the four buying criteria of the customers?Price, Age, MTBF, and Positioning.
Mean Time Before FailureA rating of reliability measure in hours.
What does a perceptual map show?The positioning of a product.
In general, what direction do market segments drift on the perceptual map over time?Toward the bottom left corner. (Lower Size, Higher Performance)
Which two buying criteria change over time?Price and Positioning
Which two buying criteria remain the same over time?Age and MTBF
Customer Survey ScoreReflects how well a product meets its segment’s buying criteria, calculated 12 times a year.
What is the “rough cut circle” on a perceptual map?Dashed outer circle that defines the outer limit of the segment.
How many units is the rough cut circle?Radius of 4 units.
What is the “fine cut circle” on a perceptual map?Solid inner circle that defines the heart of the segment. Customers prefer products in this circle.
What is the radius of the Fine Cut Circle?2.5 unites.
Ideal SpotThe point in the heart of the segment where, all other things being equal, demand is the highest.
Describe score reductions in the rough cut circle.1/2 across the rough cut circle, scores drop 50%, Scores drop 99% for products that are almost to the edge.
What is distance between low and high preferred prices?$10.00
How much do prices drop each year?$0.50
Sensors priced $1.00 above or below the segment guidelines lose about _____% of their customer survey score.20
How much of a range does each segment have for MTBF?5,000 hours
Products with an MTBF 1,000 hours below the segment’s guideline lose about _____% of their customer survey score.20
How much do material costs increase for every additional 1,000 hours of reliability?$0.30
T/F? A product will never be too old or too young to be considered for purchase.True
When should you buy automation and capacity for a new product?The year prior to the product’s revision date.
T/F? Project lengths will increase when the company puts two or more products into R&D at the same time.True
Re positioning products cuts the perceived age of the product by ____.1/2
What determines a product’s level of awareness?Its promotion budget
What determines a product’s segment accessibility?Its sales budget.
Should the benchmark forecast be used to forecast how many units to product?No.
How much does each new unit of capacity cost?$6.00 for floor space + $4.00(automation rating).
How do you discontinue a sensor?Sell all of the capacity for the sensor.
What are the lowest and highest automation levels, respectively.1, 10
By what percentage do labor costs fall at an automation rating of 10?90%
How much does it cost to raise automation by 1 level?$4.00 for each unit of capacity.
What is the Finance Department Primarily concerned with?Acquiring capital, establishing a dividend policy, setting accounts payable and receivable policies, driving financial structure of the firm, and selecting and monitoring performance measures.
When is last year’s current debt payed off?January 1st
As a general rule, companies fund short term assets like _____ _____ and _____ with current debt offered by banks.Accounts receivable, inventory
As a general rule, bond issues are used to fund long term investments in ______ and ______.Capacity, automation
As a general rule, stock issues are used to fund long term investments in ______ and ______capacity, automation
What is on the first page of the courier?A snapshot of last year’s results
What is on the Stock and Bond Summaries in the Capstone Courier?Stock price and bond ratings, as well as interest rate for the next year.
What does the financial summary page cover in the Capstone Courier?Each company’s cash flow, balance sheet, and income statements.
What does the Production analysis report in the Capstone Courier?Detailed information about each product in the market, including sales and inventory, price, material and labor costs.
What does the segment analysis report in the Capstone Courier?Each market segment in detail. Includes ideal position, price, age, and reliability. This section also includes the customer survey scores for each company for each segment.
What does the Market Share report in the Capstone Courier?Details sales volume in all segments, reporting potential and actual sales.
Assests = ____ + _____Liabilities + Equities
Investing in the same TQM Initiative round after round will create
A. ever increasing returns
B. diminishing returns
C. the same amount of return
According to the S-Shaped curve, diminishing returns for a single year budget become noticeable at
A. $1,000,000
B. $1,500,000
C. $2,000,000
If a company with low automation wanted to invest in a single area that exclusively lowers labor costs, they would select:
A. QIT (Quality Initiative Training)
B. Concurrent Engineering
C. Vendor/JIT (Just in Time [Inventory])
The exact outcome of TQM efforts appear on the TQM Report, and as bar charts on the TQM spreadsheet. These results are for
A. the previous round only
B. the upcoming round only
C. cumulative for the previous and all remaining rounds (assuming no additional investment is made)
The TQM report can be accessed from
A. The Capstone(r) Courier
B. The Decisions menu.
Production runs can be scheduled in
A. only one shift
B. always two shifts
C. one or two shifts
D. up to three shifts
Hiring the Needed Complement will always eliminate
A. Overtime
B. worker layoffs
C. a Second Shift
D. strikes
Management should strive to
A. increase Turnover
B. decrease Turnover
Increasing Capacity tends to
A. reduce the Needed Complement
B. reduce the number of workers on Second Shift
C. reduce Overtime
Increasing Training Hours tends to
A. increase the Needed Complement
B. decrease the Needed Complement
C. neither increase nor decrease the Needed Complement
D. both increase and decrease the Needed Complement
Recruiting Costs are incurred when
A. Automation levels increase
B. Production runs increase and teams match hiring to Needed Complement
C. workers are assigned to a Second Shift
Assuming the Productivity Index is greater than 100%, adding Overtime will
A. increase the Productivity Index
B. decrease the Productivity Index
Worker training is entered by the
A. Hour
B. Dollar
Teams can eliminate all Recruiting Costs if they wish
A. True
B. False
Generally, Separation Costs will be incurred when
A. Production levels increase
B. Automation Levels increase
C. Production Levels decrease
D. Production levels decrease and / or Automation levels increase
True or False: The new contract that you negotiate with Labor will take affect starting January 1st of the year the contract is renegotiated.
A. True
B. False
True or False: Generally speaking, a team with high levels of automation would be inclined to Make a “low ball” offer to the unions in order to further lower costs.
A. True
B. False
Which team(s) does labor see the opening offers from?
A. One team
B. All teams
C. Two teams
D. Only your team
The maximum length of a strike is:
A. 4 weeks
B. 8 weeks
C. 12 weeks
D. 16 weeks
Suppose workers earn $20.00 in the current contract. There are only two teams, Andrews and Baldwin. Labor demands $22.00. Andrews gives its negotiators a range of $23.00 to $25.00. Baldwin gives its negotiators a range of $20.20 to $22.20. Will Labor strike:
A. Andrews
B. Baldwin
C. Both
D. Neither
In the current contract, the workers wage rate is $20.00. Which of the following negotiation ranges would be outside the rules?
A. $18.00 to $18.00
B. $15.60 to $16.80
C. $30.20 to $32.20
D. $30.00 to $32.00
E. Both B and C would be outside the rules.
There are two teams, Andrews and Baldwin. As a result of an earlier labor negotiation, Andrews workers earn $20.00. Baldwin workers earn $22.00. What will Labor demand?
A. Andrews $22.00. Baldwin $24.20.
B. Andrews $24.20. Baldwin $24.20.
C. Andrews $24.20. Baldwin $22.00.
D. Andrews $24.00. Baldwin $24.00
E. None of the above.
Product prices are set on the Marketing Budget Detail spreadsheet
A. True
B. False
Each market segment responds to different types of media (e.g. print, direct mail, etc.) to a varying degree. It follows then that each product must be identified with its target segment. Product target segments are identified by
A. their placement on the Perceptual Map
B. entering their status on the Pricing and Forecasting spreadsheet
C. entering the target segment on the Marketing Budget Detail
Each additional advertisement increases customer Awareness by the same amount of the first
A. True
B. False
The Marketing Budget Detail asks teams to determine budgets by
A. Product
B. Segment
C. Both
In the Promotion Budget Resource, teams can select which of the following media areas
A. Print Media and Direct Mail
B. Email and Telephone Contact
C. Trade and Road Shows
D. Web Media and Television
The Target Segment selection lets teams move their products from one location on the Perceptual Map to another
A. True
B. False
In the Sales Budget Resource, the outside sales force meets with customers face-to-face. The cost of each salesperson includes which of the following?
A. Salary and Wardrobe
B. Commission and Support
C. Travel and Brochures
Each inside salesperson costs $50,000.
A. True
B. False
Distributors are
A. support staff for the outside sales force
B. a separate Sales channel
C. Original Equipment Manufacturers
What is the basic forecasting method?Last ear’s sales * market growth
What is the cost of holding inventory?12% of the cost to produce the unit
In which section would you place the worst and best case scenarios, respectively?Forecasting, production.
What are the six basic strategies?Broad cost leader, broad differentiator, niche cost leader, niche differentiator, cost leader w/ product lifecycle focus, and differentiator with product lifecycle focus.