CapSim Exam Flashcards

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Questions and Answers

How many basic strategies can be the starting point for your own custom strategy?

What are the 6 basic strategies?

Broad Cost Leader, Niche Cost Leader, Broad Differentiator, Niche Differentiator, Cost Leader with Product Lifecycle Focus, Differentiator with Product Lifecycle Focus

What defines a Broad Cost Leader strategy?

Maintains a presence in all segments of the market by keeping costs to a minimum.

What is characteristic of a Niche Cost Leader strategy?

Concentrates on Traditional and Low End segments. Signup and view all the answers

What defines a Broad Differentiator strategy?

Maintains a presence in every market segment with excellent design and high awareness. Signup and view all the answers

What is a characteristic of a Niche Differentiator strategy?

Focuses on high technology segments with premium products. Signup and view all the answers

What does 'Cost Leader w/ Product Lifecycle Focus' strategy emphasize?

Focusing on High End, Traditional, and Low End segments with minimized costs. Signup and view all the answers

What is the Differentiator w/Product Lifecycle Focus strategy?

Concentrates on High End, Traditional and Low End segments with new products and excellent design. Signup and view all the answers

What does MTBF stand for?

Mean Time Before Failure Signup and view all the answers

What is the purpose of a Perceptual Map?

A marketing tool used to track the position of the company's products against competitors. Signup and view all the answers

The Age Score: The age criteria does NOT have a rough cut.

True Signup and view all the answers

What is the most important criteria for 'High End Segment' customers?

Positioning Signup and view all the answers

What factors drive project length?

Product's automation level, Number of R&D projects, Proximity to existing products Signup and view all the answers

It is easier for High Tech companies to re-enter the Traditional and Low End segments than it is for Low Tech companies to re-enter the high tech segments.

False Signup and view all the answers

Forecasting sales requires what two components?

Math and Logic Signup and view all the answers

A good way to determine this year's demand is to multiply last year's demand by the growth rate then adding the result to last year's demand.

False Signup and view all the answers

What document should you view to review your projections for the upcoming year?

Proformas Signup and view all the answers

What is a proforma?

Dynamic financial statement that recalculates based on decisions. Signup and view all the answers

What are the buying criteria for customers?

Price, Positioning, Age, MTBF Signup and view all the answers

Customer survey scores are calculated how many times a year?

12 Signup and view all the answers

Price ranges in all segments drop by how much each year?

$0.50 Signup and view all the answers

What can help you diagnose stock outs and their impacts?

Market Share Report Signup and view all the answers

What are the four categories used in Balanced Scorecards?

Financial, Internal Business Process, Customer, Learning & Growth Signup and view all the answers

The simulation charges a what percentage inventory carrying cost?

12% Signup and view all the answers

The age of a product is defined as?

Length of time since a product was revised or invented. Signup and view all the answers

Positioning and price change every year or remain the same?

Change every year Signup and view all the answers

What position on the Perceptual Map has the highest demand?

Ideal Spot Signup and view all the answers

What does SMART goals stand for?

Specific, Measurable, Attainable, Realistic, Time Driven Signup and view all the answers

Margin points are earned in which areas?

Contribution Margin, Net Margin, Return on Sales (ROS) Signup and view all the answers

What triggers an emergency loan?

Having a negative end of year cash position Signup and view all the answers

What are the criteria for earning Working Capital points?

Current Ratio greater than 2, Days of Working Capital between 30-90 days Signup and view all the answers

Why do you want a high market share?

To weaken competition over the long haul. Signup and view all the answers

What are the requirements for earning forecasting points?

Product cannot be out of stock on December 31 and cannot have more than 120 days of inventory. Signup and view all the answers

What must a product do to earn Customer Satisfaction points?

Sell 50,000 units, Not stock out, Get a survey score of at least 30 Signup and view all the answers

How are Productivity points earned?

Sales per employee, Profits per employee, Turnover Rate Signup and view all the answers

What determines Financial Structure points?

Leverage = Total Assets / Total Equity, Best leverage is between 1.8-2.8 Signup and view all the answers

How is wealth created on analyst reports?

Cumulative profits, Cumulative free cash flow, Market capitalization Signup and view all the answers

What are the 4 key departments in a company?

Research and Development, Marketing, Production, Finance Signup and view all the answers

How do you raise money?

Issue more stock, Borrow long-term debt, Borrow short-term debt Signup and view all the answers

Awareness decays by what fraction each year?

1/3 Signup and view all the answers

What is the maximum capacity you can schedule for each product?

Double Signup and view all the answers

Study Notes

CapSim Exam Study Notes

There are 6 basic strategies that can serve as a foundation for custom strategies in CapSim.

Basic Strategies

Broad Cost Leader: Competes across all market segments through low prices and cost efficiencies. Focuses on minimizing research, production, and material costs.
Niche Cost Leader: Targets traditional and low-end market segments. Aims for cost advantages similar to Broad Cost Leader but within specialized segments.
Broad Differentiator: Stands out in all segments by offering products with superior design and accessibility, ensuring products keep pace with market changes.
Niche Differentiator: Focuses on high-tech segments (High End, Performance, Size) by delivering innovative products with excellent design.
Cost Leader with Product Lifecycle Focus: Centers on High End, Traditional, and Low End segments, promoting new products in High End that transition through lifecycle.
Differentiator with Product Lifecycle Focus: Similar to Cost Leader focus but emphasizes product innovation across all segments with premium pricing.

Key Metrics and Tools

Mean Time Before Failure (MTBF) is measured in hours, crucial for assessing product reliability.
Perceptual Map: A marketing tool used to visualize the positioning of products relative to competitors.
Customer satisfaction is assessed through survey scores processed 12 times a year.

Product Management

Age criteria does not restrict product purchases; products cannot be too new or too old for consideration.
Positioning is the most critical factor for High End segment buyers.

Project Length Factors

Automation levels, R&D project volume, and product location affect the length of product development projects.

Financial Management

The simulation enforces a 12% inventory carrying cost. Strong working capital relationships are essential to avoid emergency loans, which happen during negative cash positions.
Proformas are dynamic financial statements that forecast future projections and assess feasibility of strategic decisions.

Sales Forecasting

Effective forecasting employs both math and logic to predict demand.
Common pitfalls include relying on previous year's growth rates without adjustments.

Customer Satisfaction Metrics

Achieve customer satisfaction by selling at least 50,000 units annually, avoiding stockouts, and securing a customer survey score of a minimum of 30.

Wealth Creation Assessment

Wealth creation is evaluated through cumulative profits, free cash flow, and market capitalization.
Leverage should ideally be maintained between 1.8 and 2.8 for optimal financial structure points.

Departmental Responsibilities

R&D: Innovates and revises products, exploring new introductions and enhancements.
Production: Manages product assembly, automation increases, and production planning.
Marketing: Sets pricing strategies and promotional budgets, forecasts sales.
Finance: Ensures funding for growth through stock issuance and debt management.

Strategic Insights

Customer buying criteria include price, positioning, age, and MTBF, influencing market entry decisions.
Awareness of the product decays by one-third annually, necessitating continuous marketing efforts.

Operational Capacities

Up to double the first shift capacity can be scheduled for each product, utilizing two shifts to maximize production efficiency.

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Description

Test your knowledge on the basic strategies of CapSim with this set of flashcards. Covering both the number of strategies and specifics of each, these flashcards will help you prepare effectively for your exams. Perfect for anyone looking to master their CapSim strategy understanding.