Capstone CAPSIM Exam Answers

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Research and development
Products are invented and revised by which department?
Marketing
Production
Research and Development
Finance
capstone courier
What is the industry newsletter called?
Capstone Courier
Capstone Quarterly
Capstone Messenger
wage increases
Which of these investments is not a function of the Production department?
Increasing Automation
Wage Increases
Creating new production lines
a b and c
What are your company’s options for raising money?
Borrowing Long-term debt
Borrowing Short-term debt
Issuing Stock
A and C only
A, B and C
marketing
Prices are established by the:
Finance Department
Marketing Department
Production Department
R&D Department
true
The Proformas are dynamic financial statements that recalculate based on your decisions.
True
False
performance, low end, high end, size, traditional
5 different markets
match product to market, rank best product
two step purchase decision
traditional
age – price – position – quality
low end
price – age – position – quality
high end
position – age – quality – price
performance
quality – position – price – age
size
position – age – quality – price
marketing, finance, product, research and development
4 functional areas
R and D cycle time factors
– automation level of production line
– number of projects underway
– distance moved
New product development
– takes at least one year
– max is 2x listed capacity
– additional capacity takes at least one year
-create 25% awareness at no cost
require capacity and automation
over forecasting, failed to raise funds needed for expenditures
Emergency loan factors
overall cost leader, differentiation
competition strategies
customer survey score
calculated 12x/year
-age and positioning taken into account
-100 – ideal spot, bottom priced, ideal age, MTBF top
awareness
1/3 forget from year to year
-built over time by products promotion budget
-fund advertising and public relations campaign
accessibility
built over time by products sales budget
-fund salespeople and distribution systems to service customers
raising automation risks
1) expensive – $4 per unit
2) as you raise, increasingly difficult for R and D to reposition products short distances
current debt, stock issues, profits, long term debt
4 different ways to acquire capital
acquire capital, dividend policy, AP/AR policy, debt to equity structure, performance measures
5 decisions that come with financing
statement of cash flows, balance sheet, Income statement
3 financial statements
poor investing and financing decisions, negative cash flows result in emergency loan
reasons for having bad cash flows
Products are invented and revised by which department?
– Marketing
– Production
– Research and Development
– Finance
Research and Development
What is the industry newsletter called?
– Foundation FastTrack
– Foundation Quarterly
– Foundation Formula
Foundation FastTrack
Which of these investments is not a function of the Production department?
– Increasing Automation
– Wage Increases
– Creating new production lines
Wage Increases
What are your company’s options for raising money?
– Borrowing Long-term debt
– Borrowing Short-term debt
– Issuing Stock
– A and C only
– A, B and C
A, B and C
Prices are established by the:
– Finance Department
– Marketing Department
– Production Department
– R&D Department
Marketing Department
The Proformas are dynamic financial statements that recalculate based on your decisions.
– True
– False
True
You produce and sell:
Electronic sensors
4 main departments
1. R&D
2. Marketing
3. Production
4. Finance
R&D is where you:
– Invent and revise products
– Decide how to improve existing products
Marketing is where you:
– Set your price
– Determine sales and promo budgets
– Forecast sales for the coming year
Production is where you:
– Schedule manufacturing runs
– Manage the size of the plant and its automation levels
– Create/sell off production lines
Finance is where you:
– Ensure your company has the funds it needs to grow
– Issue stock or borrow money (short or long term)
Best place to start strategy-wise:
Analysis – breaking down the industry and the company
– strengths and weaknesses
– potential of the market
Industry Conditions Report
– Helps you to understand your customers
– Lists market segment sales percentage and projected growth rates unique to your simulation
– Published ONCE at beginning of simulation
Capstone Courier (Foundation FastTrack)
The industry newsletter, which is an extensive year-end report of the sensor industry
This report includes:
– Customers Buying Patterns
– Product Positioning
– Public Financial Records
– This is where your team will evaluate their company’s performance or analyze their competitors
Situation Analysis
Series of tables that help determine the size of the market, how fast it is growing and what kind of products different customers are looking for
Solid circles on marketing page
Market segment of customers with similar preferences
Dotted circles on marketing page
Boundary of sales – outside of the dots, there will be 0 sales
Cost of an R&D project
Based on how long the project will take to complete
(1 year = $1m, 6 mo. = $500k, etc.)
Drift rate in industry conditions report
How fast each market segment is moving across the perceptual map
What to review before making marketing decisions
Market segment pages in the report (5-6)
Every dollar above price range will result in:
10% loss of demand
Scheduling based on 1st shift capacity
You can schedule up to 2x the 1st shift capacity – 2nd shift workers are paid time and a half
Contribution margin needed for profitability
30% or higher for a nice profit, 20% or higher to make sure you are not losing money
When to add capacity/automation
When your 2nd shift percentage is very high, you will need more capacity/automation to keep up with demand – they are added after a year

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