CompXM TEST QUESTIONS AND ANSWERS

CompXM TEST QUESTIONS AND ANSWERS Pfmn - CORRECT ANSWER new performance coordinate on the perceptual map; performance indicates how well your product performs (speed, sensitivity, etc.); the long term trend is towards higher performance; enter the performance specification you want your product to have when the project finishes; for existing products, the farther the move, the longer the time and the higher the cost; for new products, project length depends upon proximity to your existing products size - CORRECT ANSWER new size coordinate on the perceptual map; size indicates the physical dimensions of the product; the long-term trend is towards smaller products; enter the size specification you want your product to have when the project finishes; for existing products, the farther the move, the longer the time and the higher the cost; for new products, project length depends upon proximity to your existing products MTBG - CORRECT ANSWER new mean time before failure specification; MTBF predicts reliability; it indicates the average number of hours your product will operate before it fails; higher reliability implies higher material costs to build your product revision date - CORRECT ANSWER the date the project will complete; until this date, the product is produced with the original specifications; after this date, the product is produced with the new specifications; any existing inventory at that time is reworked to the new specifications at no additional cost; tip: under the rules, a new project cannot begin until the old project finishes; all projects begin on January 1st; projects that finish in December are better than projects that finish in January because the December revision date will allow you to begin a new project almost immediately, while the January revision date will force you to wait until the next round age at revision - CORRECT ANSWER the new perceived age of the design when the product emerges from R&D; moving a product on the perceptual map affects the age, but changing MTBF specifications does not; when the product moves, customers see the product as younger than the old design, but not entirely new; they cut the old age in half and behave as though the design is younger R&D cost - CORRECT ANSWER the total cost of the project in thousands of dollars; the most you can spend in any year is $1 million; if the project costs more than $1 million, $1 million will be spent this year plus the remaining balance in future years price - CORRECT ANSWER the price of your product this year; customers expect prices to fall within a reasonable range; for the expected ranges, visit the segment pages under reports promo budget - CORRECT ANSWER promotion budget this year (in thousands); promotion drives customer awareness; the more customers that are aware of your product, the more likely they will choose your product; you can think of promotion as driving all interactions with customers before they begin to actively shop; awareness decays over time- you lose about 1/3 each year as customers forget the product; if your product had 60% Awareness last year, this year it would fall to 40% if you spent $0 to promote the product; promotion efforts are subject to diminishing returns- your first $1M increases awareness about 22%, the second million adds another 23%, and the third million only another 5% sales budget - CORRECT ANSWER sales budget this year (in thousands); sales budget drives accessibility; accessibility examines the question, "how easy is it for customers in the segment to interact with your company during and after the sale?"; it measures distribution channels, sales force, shelf space, order entry systems, customer support, etc; the easier it is to interact with your company, the more likely it is customers will choose your products; a 60% accessibility rating means that 60% of customers find it easy to work with you and 40% do not; if you and a competitor offer identical products, you are more likely to win the sale if your accessibility is higher than your competitors; accessibility is a segment issue- products within the segment are assigned the segment's accessibility, while products in the rough cuts are pro-rated; diminishing returns apply- if you have one product in a segment there is no additional benefit for spending more than $3M, and if you have two or more products in a segment, there is no additional benefit for spending more than a combined $4.5M; accessibility decays over time- you lose about 1/3 each year; a $1M sales budget (combined across all products in the segment) adds 7%, $2M adds 22%, $3M adds 32%, and $4.5M adds 35% benchmark prediction - CORRECT ANSWER estimates unit sales assuming your product competes with a standardized, mediocre playing field; does not use your actual competitors products- it is useful for experimenting with price, promo and sales budgets; it is useless for forecasting your forecast - CORRECT ANSWER enter the number of units (in thousands) that you believe you will actually sell; if you leave "your sales forecast" at zero, the proforma financial reports will use the computer's unit sales forecast; tip: it is important to develop a sales forecast for each product; estimate your sales based upon current market conditions, then develop a best/worst case spread; for example, if you think demand will be about 1000, then a worst case might be 800 and a best case 1200; enter 800 here and produce enough new inventory on the Production spreadsheet to have 1200 on hand for sale; this will force the Proforma Balance Sheet and Income Statements into your worst case scenario - below expected sales with inventory consuming your cash; if you project even a tiny amount of cash in this nightmare world, you will not take an emergency loan from inventory expansion; save your decisions, then enter your best case into the "your sales forecast" column- your proforma financials will now project the best possible world - above expected sales with all of your inventory converted to cash; if your forecast is good, the actual results will fall somewhere between your worst and best cases gross revenue - CORRECT ANSWER the revenue forecast for each product; price times unit sales; assumes inventory will be available to meet demand; if Your 'sales forecast' is zero, the calculation uses the computer's 'benchmark prediction'