BSG EXAM REVIEW 2026/2027 | Comprehensive Business
Strategy Game Review | Complete Exam Guide | Pass
Guaranteed - A+ Graded
Section 1: BSG Simulation Overview & Decision Mechanics (10
Questions)
Q1: In the BSG simulation, which decision screen allows you to set production volumes
for each geographic region and directly impacts both capacity utilization and inventory
levels?
A. The Marketing & Pricing screen
B. The Corporate Finance & Dividend screen
C. The Operations & Production screen [CORRECT]
D. The CSR & Community Involvement screen
Correct Answer: C
Rationale: The Operations & Production screen is where you input production volumes
by region, which directly determines capacity utilization rates and finished goods
inventory levels. This screen cascades into cost of goods sold on the income statement
,and inventory balances on the balance sheet. Key Takeaway: "Production drives
everything downstream—know your inputs before you see your outputs."
Q2: A team decides to increase advertising spending by 15% in Year 12 while
simultaneously reducing their sales force by 10%. Which BSG decision screen
interdependency is most likely to create a suboptimal outcome from this combination?
A. The Operations & Production screen conflicting with the Finance screen
B. The Marketing & Pricing screen conflicting with the Sales Force screen [CORRECT]
C. The Corporate Finance screen conflicting with the CSR screen
D. The Global Strategy screen conflicting with the Operations screen
Correct Answer: B
Rationale: Advertising (Marketing & Pricing screen) and sales force size (Sales Force
screen) are complementary marketing investments. Cutting sales force while increasing
advertising creates a disconnect—ads generate demand that fewer salespeople cannot
adequately convert, leading to wasted ad spend and unfulfilled demand. Key Takeaway:
"Marketing levers must pull in the same direction; never increase demand generation
while cutting demand fulfillment."
Q3: In BSG, the "scorecard" displays multiple performance metrics. Which metric is
calculated as (Net Income / Average Shareholders' Equity) and serves as a primary
indicator of how effectively management is using shareholder capital?
,A. Earnings Per Share (EPS)
B. Return on Equity (ROE) [CORRECT]
C. Return on Assets (ROA)
D. Image Rating
Correct Answer: B
Rationale: ROE = Net Income / Average Shareholders' Equity. It measures the return
generated on the capital invested by shareholders and is one of the most heavily
weighted metrics in BSG performance evaluation. A higher ROE indicates more efficient
use of equity capital. Key Takeaway: "ROE is the king of BSG metrics—memorize the
formula: ROE = Net Income / Avg. Equity."
Q4: A common BSG mistake occurs when a team increases production to 110% of
capacity in a region where demand is only 85% of capacity. What is the most immediate
negative consequence of this decision?
A. Immediate bankruptcy
B. Excess finished goods inventory and increased carrying costs [CORRECT]
C. Automatic stock price increase
D. Improved credit rating
Correct Answer: B
Rationale: Producing significantly above demand creates excess finished goods
inventory. In BSG, carrying costs (typically 10-15% of inventory value annually) erode
, profitability, tie up working capital, and can lead to markdowns or obsolescence. This is
a classic sub-optimization error. Key Takeaway: "Match production to demand—excess
inventory is silent profit killer."
Q5: Which BSG decision screen input directly determines the number of models/styles
offered in each geographic region and influences both material costs and consumer
appeal?
A. The Finance & Capital Structure screen
B. The Operations & Production screen
C. The Marketing & Pricing screen [CORRECT]
D. The Global Strategy & International screen
Correct Answer: C
Rationale: The Marketing & Pricing screen includes decisions on the number of
models/styles (S/Q rating), which directly impacts material costs per pair (higher S/Q =
higher material costs) and consumer appeal (higher S/Q = greater willingness to pay).
This is a critical strategic trade-off. Key Takeaway: "S/Q rating is the bridge between
cost and price—higher quality costs more but commands premium pricing."
Q6: In BSG, if a team decides to issue new shares of stock, which two financial
statements are immediately and directly affected?
Strategy Game Review | Complete Exam Guide | Pass
Guaranteed - A+ Graded
Section 1: BSG Simulation Overview & Decision Mechanics (10
Questions)
Q1: In the BSG simulation, which decision screen allows you to set production volumes
for each geographic region and directly impacts both capacity utilization and inventory
levels?
A. The Marketing & Pricing screen
B. The Corporate Finance & Dividend screen
C. The Operations & Production screen [CORRECT]
D. The CSR & Community Involvement screen
Correct Answer: C
Rationale: The Operations & Production screen is where you input production volumes
by region, which directly determines capacity utilization rates and finished goods
inventory levels. This screen cascades into cost of goods sold on the income statement
,and inventory balances on the balance sheet. Key Takeaway: "Production drives
everything downstream—know your inputs before you see your outputs."
Q2: A team decides to increase advertising spending by 15% in Year 12 while
simultaneously reducing their sales force by 10%. Which BSG decision screen
interdependency is most likely to create a suboptimal outcome from this combination?
A. The Operations & Production screen conflicting with the Finance screen
B. The Marketing & Pricing screen conflicting with the Sales Force screen [CORRECT]
C. The Corporate Finance screen conflicting with the CSR screen
D. The Global Strategy screen conflicting with the Operations screen
Correct Answer: B
Rationale: Advertising (Marketing & Pricing screen) and sales force size (Sales Force
screen) are complementary marketing investments. Cutting sales force while increasing
advertising creates a disconnect—ads generate demand that fewer salespeople cannot
adequately convert, leading to wasted ad spend and unfulfilled demand. Key Takeaway:
"Marketing levers must pull in the same direction; never increase demand generation
while cutting demand fulfillment."
Q3: In BSG, the "scorecard" displays multiple performance metrics. Which metric is
calculated as (Net Income / Average Shareholders' Equity) and serves as a primary
indicator of how effectively management is using shareholder capital?
,A. Earnings Per Share (EPS)
B. Return on Equity (ROE) [CORRECT]
C. Return on Assets (ROA)
D. Image Rating
Correct Answer: B
Rationale: ROE = Net Income / Average Shareholders' Equity. It measures the return
generated on the capital invested by shareholders and is one of the most heavily
weighted metrics in BSG performance evaluation. A higher ROE indicates more efficient
use of equity capital. Key Takeaway: "ROE is the king of BSG metrics—memorize the
formula: ROE = Net Income / Avg. Equity."
Q4: A common BSG mistake occurs when a team increases production to 110% of
capacity in a region where demand is only 85% of capacity. What is the most immediate
negative consequence of this decision?
A. Immediate bankruptcy
B. Excess finished goods inventory and increased carrying costs [CORRECT]
C. Automatic stock price increase
D. Improved credit rating
Correct Answer: B
Rationale: Producing significantly above demand creates excess finished goods
inventory. In BSG, carrying costs (typically 10-15% of inventory value annually) erode
, profitability, tie up working capital, and can lead to markdowns or obsolescence. This is
a classic sub-optimization error. Key Takeaway: "Match production to demand—excess
inventory is silent profit killer."
Q5: Which BSG decision screen input directly determines the number of models/styles
offered in each geographic region and influences both material costs and consumer
appeal?
A. The Finance & Capital Structure screen
B. The Operations & Production screen
C. The Marketing & Pricing screen [CORRECT]
D. The Global Strategy & International screen
Correct Answer: C
Rationale: The Marketing & Pricing screen includes decisions on the number of
models/styles (S/Q rating), which directly impacts material costs per pair (higher S/Q =
higher material costs) and consumer appeal (higher S/Q = greater willingness to pay).
This is a critical strategic trade-off. Key Takeaway: "S/Q rating is the bridge between
cost and price—higher quality costs more but commands premium pricing."
Q6: In BSG, if a team decides to issue new shares of stock, which two financial
statements are immediately and directly affected?
