Capsim Questions and Answers

Capsim Questions and Answers 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. Front Page a snapshot of last year's results including sales, profits and cumulative profits for your firm and competitors 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. 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. 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 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). 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. 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!). 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 Factual Information these are forward looking, but are not estimates; they are factual 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 The Foundation Spreadsheet where you formulate and finalize management decisions for every department, accessed via an Internet browser. 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 The Decision Audit a complete trail of all team decisions saved. Available on the website by clicking the "Decision Audit" link. Four company areas Research & Development (R&D), Marketing, Production, and Finance 5 Team Namess (Andrews) and the four computer teams of Baldwin, Chester, Digby, and Ferris 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). Two Market Segments The segments are named for the customer's primary requirements and are called (1) Low Tech and (2) High Tech 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 Low Tech Drift Rates Performance +.5 Size -.5 High Tech Drift Rates Performance +.7 Size -.7 the preferred range in size and performance Fine cut the acceptable but not desired range in size and performance is known as the Rough cut The size and performance that customers desire most is known as the Ideal cut 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 Ideal Spots LOW TECH Performance 0 Size 0 Description: Segment Center Ideal Spots HIGH TECH Performance +1.4 Size -1.4 Description : Lower right corner at leading edge LOW tech Growth Rate 10% HIGH Tech Growth Rate 20% STARTING LOW Tech Unit Demand * will always sell more than High Tech 4200 STARTING HIGH Tech Unit Demand 1800 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. 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. 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. 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. Low Tech Segment Buying Criteria Price 15-35 Age 3 MBTF Ideal Position Segment Center High Tech Segment Buying Criteria Price 25-45 Age 0 MBTF Ideal Position Leading Edge 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 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 Finance issue and retire stock, set dividend, borrow current debt, issue and retire long-term debt, and set A/R and A/P lag the CEO responsible for coordination across the functions and ensuring all decisions are consistent with the strategy selected Specific decisions made by R&D Inventing sensors, revisions to size, performance and MTBF of existing sensors, indirectly change a products age. Materials costs MTBF cost + Position Cost MBTF costs $0.30 per 1,000 units. Position Costs training edge of LOW Tech $1.50 / unit Midway between the trailing edge of low tech and the leading edge of high-tec $5.75 / unit Leading edge of the high tech segment $10.00 / unit