CAPSIM Exam Questions with
Correct Answers
What is key to sales forecasting? - Answer-applying the growth rate to last year's sales
What is it called when you run out of units to sell during the year? - Answer-Stock out
What is the "best case" scenario for production? - Answer-using 12 months as a
baseline, and ordering an extra month or two worth of inventory
Why is Production after Adjustment slightly lower than Production Schedule? - Answer-
Some units will have defects and will be thrown out
How much more inventory should you produce than your forecast? - Answer-10%
How is capacity in the production interface represented? - Answer-the number of units
that can be produced in one shift (although, the sensor industry uses plants with two
shifts)
What two things should you consider when purchasing capacity? - Answer-1. Capacity
purchases take a year to implement. In other words, if you buy capacity this year, you
won't be able to use it until next year
2. Adding capacity is quite expensive. Don't purchase more than you will need during
the next year or two, as it is costly to have idle capacity in a factory not being properly
utilized
What are the three ways to raise capital in finance? - Answer-Borrowing current debt,
issuing stock, and borrowing long-term debt
What does it mean to borrow current debt? - Answer-they are one-year loans that are
paid off January 1 next year
What does it mean to issue stock? - Answer-To sell shares common stock to the public
What does it mean to borrow long-term debt? - Answer-Bond issues that are due in 10
years
Correct Answers
What is key to sales forecasting? - Answer-applying the growth rate to last year's sales
What is it called when you run out of units to sell during the year? - Answer-Stock out
What is the "best case" scenario for production? - Answer-using 12 months as a
baseline, and ordering an extra month or two worth of inventory
Why is Production after Adjustment slightly lower than Production Schedule? - Answer-
Some units will have defects and will be thrown out
How much more inventory should you produce than your forecast? - Answer-10%
How is capacity in the production interface represented? - Answer-the number of units
that can be produced in one shift (although, the sensor industry uses plants with two
shifts)
What two things should you consider when purchasing capacity? - Answer-1. Capacity
purchases take a year to implement. In other words, if you buy capacity this year, you
won't be able to use it until next year
2. Adding capacity is quite expensive. Don't purchase more than you will need during
the next year or two, as it is costly to have idle capacity in a factory not being properly
utilized
What are the three ways to raise capital in finance? - Answer-Borrowing current debt,
issuing stock, and borrowing long-term debt
What does it mean to borrow current debt? - Answer-they are one-year loans that are
paid off January 1 next year
What does it mean to issue stock? - Answer-To sell shares common stock to the public
What does it mean to borrow long-term debt? - Answer-Bond issues that are due in 10
years
