Capsim Exam Questions

CapSim Word Study Guide

1. When opening the Excel version of Capstone®, you should do what to Macros?

1. Enable
2. Disable
3. Engage
4. Disarm
5. Does not matter

1. If there are two identical products, one that has 100% accessibility and one that has 0% accessibility,

1. the one with 0% accessibility will not sell at all because consumers can’t find it.
2. the product with 100% accessibility will outsell the other 2 to 1 providing all other attributes are identical.
3. the one with 0% accessibility will not sell at all because consumers do not know of it.
4. the product with 0% accessibility will only sell after all other products have sold in that segment.
5. the product with 100% accessibility will outsell the other 3 to 1 providing all other attributes are identical.

1. How many products does every team start with?

1. One product
2. Four products
3. Ten products
4. Five products
5. None of the above

1. What are three of the five Segments?

1. Traditional, Low End, Performance
2. Traditional, Low End, Cost End
3. Low End, High End, middle End
4. Median, Size, High End
5. Performance, Size, Cost

1. A segment manager’s task is to

1. decide which products enter the segment.
2. verify the products entering and leaving a segment, the margin potential for those products, capacity level and the distribution system as compared to competitors.
3. review margin potential for each segment and evaluate the capacity for each segment compared to the competition.
4. evaluate the capacity for each segment based on total demand and the competitor’s capacity; evaluate the margin potential of all products and the distribution systems.
5. none of the above.

1. What is the difference between the market segments at the beginning of the round to the final round?

1. They all drift at an average rate of .7; down and to the right.
2. The fine cuts overlap in the beginning and in year 8; only the rough cuts overlap.
3. The fine and rough cuts overlap in the beginning and by round 8 neither the fine nor rough cuts overlap.
4. The traditional and low segment rough cuts overlap but all the remaining segments do not.
5. The High, Traditional and Low segment rough cuts overlap but all the remaining segments do not.

1. In order for a team to win at CapSim, they need to

1. have a proactive strategy and contingency plan in place.
2. have a contingency plan, a proactive strategy, open communications and the ability to make adjustments in a dynamic market.
3. monitor the other teams and then head into the areas that are not being used by the other teams.
4. have a proactive strategy, contingency plan, open communications, strong knowledge of the industry and have a strong understanding of the analyst report.
5. have a strategy in place and be ready to completely change it in round 4 if it isn’t working.

1. After you have uploaded your decisions to the website, you can change your official decisions as many times as you want prior to the processing date and time of the round.

1. True
2. False

1. Once you upload your official decisions during a round, how many times can you change them before the end of the round?

1. 0
2. 1
3. 2
4. 5
5. As many times as you want

1. What trend can be explicitly observed in the industry in which your company is operating?

1. More and more products are sold directly to the private end consumer.
2. Products become more and more expensive.
3. Products become smaller and smaller.
4. Customers show less and less brand loyalty.
5. All of the above.

1. The economic environment for this simulation game will include

1. a favorable environment featuring limited growth, high inflation, and reasonable interest rates.
2. a favorable environment featuring modest growth, low inflation, and reasonable interest rates.
3. a highly variable environment featuring significant changes in growth, inflation, and drastic fluctuations in interest rates.
4. a constant environment featuring measurable growth, constant inflation rates, and constant interest rates.
5. economic downturn and other surprises.

1. MTBF is measured in

1. day increments.
2. hour increments.
3. minute increments.
4. 30-minute increments.
5. 15-minute increments.

1. Customers that want low prices and are willing to sacrifice miniaturization and performance are in the

1. traditional segment.
2. high End segment.
3. low End segment.
4. performance segment.
5. size segment.

1. Customers that want small products and are willing to sacrifice performance are in the

1. traditional segment.
2. high End segment.
3. low End segment.
4. performance segment.
5. size segment.

1. In Capstone©, pricing standards are set by:

1. Customers (Market Segment).
2. Competitors.
3. You, The Company.
4. a range of the prices from all Teams.
5. Random Selection.

1. In the Rough Cut buying stage, “reliability” is expressed in terms of:

1. Mean Time Between Failure.
2. how long the product will last.
3. years.
4. months.
5. Mean Time Before Failure.

1. MTBF measures what?

1. Price
2. Performance
3. Reliability
4. Size
5. Market Segment

1. The two characteristics that the perceptual map evaluates are

1. Performance and Size.
2. Performance and Price.
3. Size and Price.
4. Reliability and Performance.
5. none of the above.

1. The Perceptual Map is

1. a marketing tool used to compare products against customer perceptions.
2. a marketing tool used to compare performance against size.
3. a marketing tool used to compare reliability against price.
4. a marketing tool used to compare age against position.
5. a marketing tool used to compare time against motion.

1. The segments all drift to the lower-right section of the perceptual map.  Why does this drift take place?

1. Customers want smaller and less expensive products.
2. Customers want reliable and affordable products.
3. Customers want smaller and faster products.
4. Customers want newer and faster products.
5. None of the above.

1. Over time, the segments will drift in which direction on the Perceptual Map?

1. up; left
2. up; right
3. down; left
4. down; right
5. will remain still and constant

1. When tracking market segments on the performance and size perceptual map, which segment moves or “drifts” the slowest?

1. Low
2. Traditional
3. Size
4. Performance
5. High

1. What happens to a product priced at $1 above or below the segment guideline when a segment’s product supply outstrips demand?

1. It loses 25% of its appeal.
2. It loses 10% of its appeal.
3. It loses 20% of its appeal.
4. It loses 15% of its appeal.
5. None of the above.

1. What’s the measure for product reliability?

1. Return rates of products sold
2. Customers’ happiness statements
3. Expected time a product lasts
4. Price
5. All of the above

1. At what dollar amount above the segment guidelines is all consumer appeal lost?

1. $3
2. $5
3. $10
4. $20
5. None of the above

1. The prices in each segment

1. drop by $0.50 each year.
2. drop by $1.00 each year.
3. increase by $0.50 each year.
4. vary depending upon relative market demand.
5. remain constant in each segment.

1. MTBF in the segments should be

1. MTBF (Performance) > MTBF (High End).
2. MTBF (Low End) > MTBF (High End).
3. MTBF (Low End) < MTBF (Size).
4. a, b, and c.
5. only a and c.

1. Which of the following are not considered in the Fine Cut?

1. Positioning
2. Automation
3. Age
4. Reliability
5. Price

1. Inside each fine cut circle,

1. segments have an ideal spot where demand is at its highest.
2. product segments strive to be in the center.
3. product segments strive to be near the boundaries.
4. demand is at its highest as long as product segments are within the circle.
5. none of the above.

1. The Traditional ideal spot is

1. near the upper-left corner of its circle.
2. near the lower-right of its circle.
3. near the center of its circle.
4. near the lower-left of its circle.
5. near the upper-right of its circle.

1. Increasing a product’s reliability will result in which of the following changes to production costs?

1. Lower material cost
2. Higher material cost
3. Higher labor costs
4. Lower labor costs
5. Reducing MTBF has no effect on costs of production

1. Age refers to:

1. Inventory Age.
2. Product Age.
3. Market Segment Age.
4. all of the above.
5. none of the above.

1. What happens to a product’s Perceived Age when it is repositioned in R&D?

1. It is reduced by 50%.
2. It is reduced by 33.3%.
3. It is reduced by 25%.
4. It is reduced by 10%.
5. It remains the same.

1. The preferred product perceived age for each sector peaks at:

1. one year for high end and five years for low end.
2. one year for high end and three years for low end.
3. zero years for high end and seven years for low end.
4. zero years for high end and three years for low end.
5. each segment wants a perceived age of zero.

1. At which point does the perceived age of a traditional product peak?

1. 2
2. 1.5 to 2.5 years
3. 7
4. 0.5 to 2 years
5. whenever it’s positioned

1. Pricing plays a role

1. when repositioning a product.
2. in the rough cut stage of the purchase decision.
3. in neither stage of the purchase decision.
4. in the fine cut stage of the purchase decision.
5. in both b and d.

1. What are the top buying criteria that low end customers most value?

1. Age
2. Price
3. Quality
4. Positioning
5. Time

1. Which of the following is not a type of market segment in CapSim?

1. Performance
2. Traditional
3. Standard
4. Size
5. None of the above

1. The top two buying criteria for each segment is:

1. Positioning for low end and Price for high end.
2. Reliability for low end and Performance for high end.
3. Price for low end and Performance for high end.
4. Price for low end and Positioning for high end.
5. Positioning for low end and MTBF for high end.

1. Low Tech customers emphasize buying criteria in which order?

1. Price, Age, Positioning, Reliability
2. Age, Reliability, Price, Positioning
3. Positioning, Age, Price, Reliability
4. Price, Positioning, Age, Reliability
5. Price, Reliability, Positioning, Age

1. Each segment places

1. a different emphasis on the 8 buying criteria.
2. a different emphasis on the 4 buying criteria.
3. some emphasis on price and some emphasis on reliability.
4. some emphasis on performance and some on size.
5. both c and d.

1. Which market segment places the most importance on price?

1. Traditional
2. Performance
3. Low End
4. Size
5. High End

1. What is the most important criterion to a “Low End Segment” customer?

1. Price
2. Age
3. MTBF
4. Positioning
5. Performance

1. If you are marketing to High End customers, which criteria are most important to them in order of importance?

1. Positioning, Age, Price, MTBF
2. Price, Age, MTBF, Positioning
3. Age, Price, Positioning, MTBF
4. MTBF, Positioning, Age, Price
5. Positioning, Age, MTBF, Price

1. Which one is not an area in which Capstone® separates company activities?

1. Marketing
2. Production
3. R&D
4. Logistics
5. TQM

1. The following represent core company activities that must be addressed each year except:

1. Research and Development.
2. Marketing.
3. Finance.
4. Labor Negotiations.
5. Production.

1. Which of the following is not addressed by R&D?

1. Age
2. Reliability
3. Number of products in each segment
4. Placement of each product inside a market segment
5. Workforce Complement

1. In the Marketing Plan, Research and Development addresses all but the:

1. placement of each product inside a market segment circle.
2. number of products in each segment.
3. age of your products.
4. automation of assembly lines.
5. reliability of each product.

1. When an R&D effort started in 2001 completes on September 15, 2002, the product revision kicks in

1. October 1, 2002.
2. immediately upon completion.
3. January 1, 2003.
4. R&D has no effect on product revisions.
5. September 15, 2003.

1. The relative cost of a product’s material cost increases as:

1. size is increased.
2. performance is decreased.
3. MTBF is raised.
4. automation stays the same.
5. all of the above.

1. R&D completion time can be diminished

1. by repositioning a product.
2. the more a company changes a product’s MTBF.
3. when several products are put into R&D at the same time.
4. when a company takes advantage of existing technology.
5. none of the above.

1. R&D completion time depends on

1. number of projects in R&D.
2. automation rating.
3. similarity to existing products.
4. size of the product.
5. a, b, and c.

1. Which Automation rating requires the longest time to reposition a product?

1. 1
2. 3
3. 7
4. 9
5. 10

1. In Capstone®

1. the terms age and perceived age are not used interchangeably.
2. the term MTBF means multiple transient business format.
3. the terms age and perceived age are used interchangeably.
4. all products will eventually have to be retired.
5. none of the above.

1. When a product is moved to a new location on the Perceptual Map, the Perceived Age (or Age) is:

1. not affected.
2. doubled.
3. divided in half.
4. tripled.
5. other.

1. Changing MTBF will:

1. have no impact on Perceived Age.
2. increase Perceived Age.
3. decrease Perceived Age.
4. change Perceived Age.
5. is undetermined.

1. R&D projects can drive a product’s:

1. size.
2. age.
3. reliability.
4. performance.
5. all of the above.

1. If your team decides to introduce a new product, when should capacity and automation be purchased?

1. Two rounds prior to product release
2. One round prior to product release
3. The round of product release
4. The round after product release
5. Purchase of capacity and automation is not necessary for new product release

1. If you purchase production capacity and automation:

1. it is available immediately.
2. it is available in 6 months.
3. it is available in the next year.
4. it is available when you need it.
5. none of the above.

1. Marketing is concerned with 4 things.  What are they?

1. Price, Reliability, Age, and Product
2. Place, Age, Promotion, and Product
3. Price, Place, Promotion, and Product
4. Product, Place, Promotion, and Reliability
5. Innovation, Product, Place, and Promotion

1. An increase in promotional budgets have:

1. increasing returns over time.
2. level returns over time.
3. decreasing returns over time.
4. decreasing then increasing returns over time.
5. increasing then decreasing returns over time.

1. Promotion efforts are subject to

1. economies of scale.
2. increasing returns.
3. diminishing returns.
4. promotion expenditure.
5. customer awareness.

1. What effect do increases in the Promotion Budget have on a product’s Awareness?

1. Increasing returns
2. Constant returns
3. Proportionally increasing returns
4. Diminishing returns
5. None of the above

1. Assuming no additional product promotion, what percent of customers, reached through last year’s marketing campaign will carry over into the current year?

1. 33%
2. 50%
3. 67%
4. 0%
5. None of the above

1. How is the strength of the sales channel measured?

1. Accessibility on a scale of 0 to 50
2. Accessibility on a scale of 0 to 100%
3. Accessibility on a scale of 1 to 50
4. Accessibility on a scale of 1 to 100%
5. Accessibility on a scale of 1 to 25

1. If you drop your sales budget to zero, accessibility drops to 0% in how many years?

1. 1
2. 2
3. 3
4. 4
5. 5

1. If your company has a sales budget of $3 million and drops it to zero,

1. accessibility drops by $1 million every year.
2. awareness drops to zero.
3. accessibility drops to 0% in three years.
4. sales will drop to zero.
5. all of the above.

1. All of the following are direct implications of hiring a second shift except:

1. increased production capacity.
2. paying higher wages to second shift.
3. training costs.
4. increased MTBF.
5. recruitment costs.

1. How can assembly lines double their capacity?

1. Speed up the production.
2. Add a second shift.
3. Double the material.
4. Build more assembly lines.
5. Assembly lines cannot be doubled.

1. If you increase automation from 2.0 to 5.0, the cost is:

1. $12 per unit of capacity.
2. $15 per unit of capacity.
3. $9 per unit of capacity.
4. $6 per unit of capacity.
5. Cannot determine with this information.

1. What is one drawback of increasing automation?

1. The product requires increased time/expense for subsequent short-move repositioning.
2. Operating second shift becomes more expensive.
3. Automation causes large leaps in repositioning.
4. Automation slows production capability.
5. It requires more employees for the production line.

1. If you reduce automation in the production component of Marketing, you will:

1. slow down R&D designs.
2. incur a retooling cost.
3. lose the game.
4. none of the above.

1. If you want to add 500,000 units of capacity to an assembly line with an automation rating of 5, how much will it cost?

1. 1,200,000
2. 1,300,000
3. 13,000,000
4. 24,000,000
5. 26,000,000

1. If a line has a capacity of 100,000 units, the cost of changing the automation level 1 unit either up or down is

1. $60,000.
2. $40,000.
3. $400,000.
4. $600,000.
5. none of the above.

1. Depreciation is calculated:

1. using a 3-year MACRS.
2. using a 5-year MACRS.
3. over a straight line 5-year period.
4. over a straight line 10-year period.
5. over a straight line 15-year period.

1. Which three factors drive labor cost?

1. Production capacity
2. Wage and benefit rates
3. Automation levels
4. Second shift/Overtime costs
5. b, c, d

1. If current wages are set at $10/hour, what would be the minimum starting pay that your company would offer?

1. $6/hour
2. $8/hour
3. $10/hour
4. $12/hour
5. none of the above

1. In the current contract, the workers’ wage rate is $20.00.  Which of the following negotiation positions would be outside the starting and ceiling amounts?

1. $16.00 to $25.00
2. $18.00 to $30.00
3. $18.00 to $35.00
4. $16.00 to $20.00
5. Both a and d would be outside the rules.

1. For Wages, the negotiation Starting Position cannot be less than ____% or more than ____% of the current contract.

1. 75; 125
2. 75; 150
3. 80; 125
4. 80; 150
5. none of the above

1. Labor Negotiation includes:

1. hourly wage.
2. benefits.
3. profit sharing.
4. annual raise.
5. all of the above.

1. To run perfectly, all HR department managers should know that

1. the negotiation starting point should not exceed 80%.
2. the starting point for benefits or wages should be between 0-150% of the current contract.
3. all strike settlements should be halfway between the demand and the negotiation ceiling.
4. all of the above is correct.
5. none of the above are true.

1. Your workers go on strike because they have demanded $20/hour and your wage negotiation ceiling is at $18/hour.  Assuming that there are no other labor demands, how long will the strike last?

1. 2 weeks
2. 4 weeks
3. 8 weeks
4. 16 weeks
5. There is no way to determine how long the strike will last.

1. In the Human Resources section, workers will strike one week for:

1. every 1% your Annual Raise Negotiations Ceiling is beneath Labor’s demand.
2. every $300 your Benefits Negotiations Ceiling is beneath Labor’s demand.
3. every 1% your Profit Sharing Negotiations Ceiling is beneath Labor’s demand.
4. every $1 your Wage Negotiation Ceiling is beneath Labor’s demand.
5. all of the above.

1. The Finance Department can use which of the following methods to acquire capital for company activities?

1. Current Debt, Stock Issues, Bond Issues, and Profits
2. Profits, Current Debt, Withholding Pensions, and Stock Issues
3. Liquidating Inventory, Stock Issues, Bond Issues and Profits
4. Credit Lines, Bond Issues, Stock Issues, and Profits
5. Current Debt, Stock Issues, Bond Issues, and cooking the books

1. Your finance department is primarily concerned with

1. acquiring the capital needed for company activities.
2. establishing a dividend policy that maximizes the return to shareholders.
3. setting credit policies for customers and suppliers.
4. profits.
5. all of the above.

1. Capital needed for company activities cannot be acquired through:

1. stocks and bonds.
2. profits.
3. current debt.
4. arbitrarily firing employees.
5. all of the above.

1. Which financial obligation is best satisfied with Bond Issues?

1. Accounts Payable
2. Increased production capacity
3. Changes in A/R policy
4. Salary increases
5. All of the above

1. What happens to a company when its debt-to-assets ratio increases?

1. Its credibility among creditors suffers.
2. It envisages higher risk.
3. Its short term interest rates increase.
4. Its bond rating is reduced.
5. c, d

1. What is your bond rate?  The prime rate is 10%; your current bond rating slipped one category (from AAA to AA).

1. 12.1%
2. 10.5%
3. 11.4%
4. 11.2%

1. Given a prime rate of r and a short term interest rate of r+2.5, the rating is B.

1. True
2. False

1. If your interest rate is 12.1%, and when you issue new bonds, the bond interest rate is:

1. 10.7%.
2. 12.1%.
3. 13.5%.
4. 6.1%.
5. 12%.

1. Given a prime rate of r and a short term interest rate of r+2.5, the Bond rate is equal to (r+3.9%).

1. True
2. False

1. You pay no brokerage fee if you:

1. issue bonds.
2. retire bonds.
3. retire stocks.
4. acquire current debt.
5. issue stocks.

1. In Capstone® what would the bond number be for a bond with an interest rate of 6.5% that matures in 2003?

1. 6.5S03
2. 2003S6.5
3. 6.5S2003
4. .03S6.5
5. 6.5.2003

1. You are charged a ____ brokerage fee to issue stock and ____ brokerage fee to retire stock.

1. 5%; 0%
2. 5%; 1.5%
3. 1.5%; 5%
4. 0%; 5%
5. 5%; 5%

1. The Credit Policy Lag has implications for:

1. Demand.
2. Performance.
3. Production.
4. Size.
5. a, c.

1. Budgeting money to Quality initiative will lead to these outcomes except:

1. decrease R&D time.
2. increase Demand.
3. increase Labor Costs.
4. increase efficiency.
5. produce administrative savings.

1. How can the R&D cycle time be reduced?

1. Increasing automation levels
2. Budgeting money to quality initiatives
3. Increasing R&D budget
4. Decreasing product portfolio
5. Decreasing capacity

1. Investing in CPI can

1. reduce administrative costs.
2. reduce material and administrative costs.
3. reduce material costs.
4. reduce labor costs and reduce R&D cycle time.

1. Investing in CCE/Six Sigma can

1. reduce labor and administrative costs.
2. increase demand and reduce labor costs.
3. reduce labor material costs.
4. increase demand.

1. Within the Process Management Initiatives, channel support systems

1. reduce material cost.
2. reduce labor costs.
3. increase demand.
4. reduce R&D cycle time.
5. none of the above.

1. Benchmarking reduces

1. Material cost.
2. Research and Development time.
3. Labor Cost.
4. Administrative Cost.
5. Demand.

1. Which of the following is an example of a TQM initiative?

1. Continuous Process Improvement
2. Just-in-Time [Inventory]
3. Quality Function Deployment Effort
4. Channel Support Systems
5. Quality Initiative Training

1. Within the process management initiatives, concurrent engineering

1. reduces material cost, inventors’ carrying costs and administrative overhead.
2. reduces labor costs.
3. increases the effectiveness of the sales budget and therefore demand.
4. reduces R&D cycle time.
5. none of the above.

1. The situation analysis consists of ______ parts.

1. 3
2. 4
3. 5
4. 6
5. 7

1. The situation analysis is

1. a team exercise.
2. designed to help your group understand the current market conditions.
3. designed to help your group understand how the industry will evolve over the next 8 years.
4. a five part analysis.
5. all of the above.

1. Which three customer groups “ride the wave of technology” and are considered to be in the high technology segments?

1. Performance, High End, and Size
2. Performance, Traditional, and High End
3. Performance, Low End, and Size
4. Traditional, High End, and Size
5. Traditional, Low End, and Size

1. When plotting the segment locations for each round

1. the goal is to determine the ideal spot location for each segment during the 8 years.
2. the goal is to determine which products are the highest in demand.
3. you use price on one axis and performance on the other.
4. you should use Microsoft Excel.
5. all of the above.

1. Which of the following questions is answered by the demand analysis?

1. What drives our profit margins?
2. How well do my products perform?
3. Are the market segments growing at the same rate?
4. Does the industry have adequate capacity to serve the market?
5. All of the above.

1. Two points that should be considered in your strategy are

1. the overall market is growing and prices are going down.
2. the overall market is shrinking and prices are going down.
3. the overall market is growing and it is easy to confuse unit market size with dollar market size.
4. the overall market is growing and prices are going up and down.
5. none of the above.

1. What is the total cost in dollars for adding 1.0 million units of capacity to a production line with an automation level of 1.0 and floor space costs per unit of $6?  Assume automation costs per unit of $4.

1. $26 million
2. $10 million
3. $2.6 million
4. $1 million
5. none of the above

1. If you are currently producing 100,000 units and your automation level is 10, how much will it cost you to double your capacity?

1. $1,000,000
2. $4,600,000
3. $100,000
4. $10,000
5. none of the above

1. What is the right formula for capacity investment?

1. Investment = Capacity x ($4 x Automation)
2. Investment = Capacity x [$10 + ($4 x Automation)]
3. Investment = Capacity x [$4 + ($6 x Automation)]
4. Investment = Capacity x [$6 + ($4 x Automation)]
5. Investment = Capacity x Automation

1. If your current capacity is 10,000 units and your automation level is 5.0, what is the difference of the investment between doubling your capacity and doubling your automation level?

1. $60,000
2. $20,000
3. $10,000
4. $520,000
5. $260,000

1. If you are currently producing 100,000 units at an automation level of 5, how much would it cost to maximize automation?

1. $500,000
2. $50,000
3. $2,000,000
4. $5,000,000
5. none of the above

1. As a manager you need to change the automation level of your segment from 2 to 5.  The line has a capacity of $2 million.  How much would it cost?

1. $12 million
2. $24 million
3. $10 million
4. $6 million
5. none of the above

1. Rapid movement of an existing product on the Perceptual Map requires

1. reliability adjustment.
2. low automation levels.
3. high automation levels.
4. none of the above.

1. If a product’s Price was $20, its Material $8, and its Labor $7, the Margin Per Unit would be:

1. $12.
2. $13.
3. $1.
4. $5.
5. $20.

1. If the price/product is $10 and the material cost/product is $2 and the labor cost/product is $3, what is the gross margin/product?

1. $6
2. $2
3. $4
4. $3
5. none of the above

1. In the Capstone® simulation, what are the components of a product’s material cost?

1. Cost of Inventory on hand and the cost to store it
2. Reliability component cost and positioning component cost
3. The costs associated with inventory, shipping and handling
4. Level of automation and product reliability
5. None of the above

1. The reliability component cost of a product with a 17,000 hour MTBF rating is:

1. $5.10.
2. $17.00.
3. $51.00.
4. $170.
5. cost cannot be determined with information given.

1. The best case margin potential for a product with a top price of $30 and a minimum cost of goods sold of $15 is:

1. $45.
2. $2.
3. $450.
4. $.50.
5. none of the above.

1. A point or some points you consider for your strategy are

1. strive to give your customers the top two buying criteria.
2. the perceptual map is more important as a rough cut consideration than a fine cut distinction.
3. maximize the effectiveness of R&D, to achieve higher demand you must have a substantially better offer, it does not matter how good your product is if you stock out.
4. all of the above.
5. none of the above.

1. In Capstone®, the spreadsheets allow team members to

1. make changes to variables.
2. observe the results of changes made to variables.
3. design their own performance criteria with which to compare market segments.
4. all of the above.
5. both a and b.

1. Each of the spreadsheets

1. work independently.
2. depend on values entered in other spreadsheets.
3. work simultaneously.
4. all of the above.
5. both a and b.

1. New products are created on which spreadsheet?

1. Production
2. Research and Development
3. New Products and Repositioning
4. Marketing
5. Market Research and Analysis

1. Using the R&D Spreadsheet to design your products, you have which of the following projects to choose from?

1. Repositioning
2. Invention
3. Reliability adjustment
4. All of the above
5. None of the above

1. What is the minimum amount of time that it takes to create a new product?

1. 3 months
2. 6 months
3. 1 year
4. 2 years
5. 5 years

1. What are the drivers of Material Costs?

1. Higher performance
2. Smaller size
3. Higher Mean Time Between Failure (MTBF)
4. All of the above
5. None of the above

1. The marketing spreadsheet is used to set which of the following:

1. prices.
2. promotion budgets.
3. sales budgets.
4. all of the above.
5. none of the above.

1. The A/R lag is

1. a marketing spreadsheet definition.
2. the accounts receivable lag (in days).
3. the time between customers receiving products and when they are expected to pay for them.
4. a, b, and c.

1. What happens to a company when it increases the A/P lag?

1. It improves its cash position.
2. It deteriorates its cash position.
3. It loses credibility.
4. Its suppliers withhold material for production.
5. a, d.

1. The automation level

1. causes you to require more manpower with higher ratings.
2. causes you to require more manpower with lower ratings.
3. causes you to require less manpower with higher ratings.
4. causes you to require less manpower with lower ratings.
5. both b and c.

1. When going to a new automation level

1. there is a 1 year lag.
2. there is a lag dependent on the amount the automation level has been changed.
3. there is no lag.
4. the lag is dependent on the cost.
5. none of the above.

1. Negotiation Ceilings which represent the maximum management is willing to pay are always

1. 12% above the starting positions.
2. 5% above the starting positions.
3. 10% above the starting positions.
4. unlimited.
5. none of the above.

1. Maximum issue is

1. the upper limit in thousands of dollars that teams can issue in stock this year.
2. amount in thousands of dollars that teams wish to issue in stock.
3. upper limit of stock that can be bought back in thousands of dollars.
4. amount of stock, if any, to buy back.
5. none of the above.

1. Cash position is

1. the cash position at the beginning of the round.
2. a projection of the cash position at the end of the round.
3. the cash position at the beginning of the round and a projection of the cash position at the end of the round.
4. the financial position of the company.
5. none of the above.

1. What effects do Process Management Initiatives have?

1. Administrative savings
2. Higher production efficiency
3. Increase in demand
4. Reduction of R&D times
5. All of the above.

1. Your team will make decisions for

1. Marketing.
2. Finance.
3. Human Resources.
4. Production.
5. all of the above.

1. Which customer group or market segment seeks proven products using current technology?

1. Traditional customers
2. Low End customers
3. High End customers
4. Performance customers
5. Size customers

1. Which customer group or market segment seeks proven products, are indifferent to technological sophistication, and are price motivated?

1. Traditional customers
2. Low End customers
3. High End customers
4. Performance customers
5. Size customers

1. Which customer group or market segment seeks cutting edge technology in both size and performance?

1. Traditional customers
2. Low End customers
3. High End customers
4. Performance customers
5. Size customers

1. Which customer group or market segment seeks high reliability, advanced technology products that emphasize high performance?

1. Traditional customers
2. Low End customers
3. High End customers
4. Performance customers
5. Size customers

1. Which customer group or market segment seeks advanced technology products that focus on small size?

1. Traditional customers
2. Low End customers
3. High End customers
4. Performance customers
5. Size customers

1. Repositioning moves a product on the Perceptual Map from its old location to a new one.  When does the new location become active?

1. The day the R&D project completes
2. The following year the R&D project completes
3. The month the R&D project completes
4. The day capacity and automation is purchased
5. The day capacity is purchased

1. If a product’s Automation rating is substantially increased, it will:

1. take longer to move the product across the Perceptual Map.
2. take a shorter time to move the product across the Perceptual Map.
3. not allow the product to move across the Perceptual Map.
4. have no effect on the product moving across the Perceptual Map.
5. other.

1. There is ______ lag in buying new Capacity and ______ lag in changing Automation.

1. 0; 0
2. 1 year; 0
3. 0; 1 year
4. 1 year; 1 year
5. ½ year; ½ year

1. Which of the following is not a primary concern for your Finance Department?

1. Acquiring capital
2. Setting credit policies for customers and suppliers
3. Employee turnover
4. Establishing a dividend policy
5. Capital structure of the firm

1. This strategy attempts to gain a competitive advantage by keeping R&D costs, production costs and raw material costs to a minimum in order to compete on the basis of price.  The product life cycle focus will enable sales for many years on each new product introduced into the High End segment.  Products will begin their lives in the High End, mature into Traditional and finish as Low End products before they are retired and their assets harvested.

1. Broad Cost Leader
2. Niche Cost Leader
3. Cost Leader with Product Life Cycle Focus
4. Differentiation strategy with a Product Life Cycle Focus
5. Broad Differentiation

1. This strategy will allow us to maintain a presence in every market segment.  Competitive advantage will be gained by keeping R&D costs, Production costs and raw material costs to a minimum, enabling us to compete on the basis of price.  We will price below average.  We will increase automation levels to improve our margins and to make it acceptable to run second shift/overtime.

1. Broad Cost Leader
2. Niche Cost Leader
3. Cost Leader with Product Life Cycle Focus
4. Differentiation Strategy with a Product Life Cycle Focus
5. Broad Differentiation

1. This strategy will allow us to maintain a presence in every market segment.  Competitive advantage will be gained by distinguishing our product with an excellent design, high awareness, and easy accessibility.  We will develop an R&D competency that keeps our designs fresh and exciting.  Our products will keep pace with the market, offering improved size and performance.  The price of the products will be above average and capacity will expand as we generate higher demand.  

1. Niche Differentiation
2. Niche Cost Leader
3. Cost Leader with Product Life Cycle Focus
4. Differentiation Strategy with a Product Life Cycle Focus
5. Broad Differentiation

1. This strategy will concentrate on the Traditional and Low End segment.  Competitive advantage will be gained by keeping R&D costs, Production costs, and raw materials costs to a minimum, enabling us to compete on the basis of price (low prices).  The product will be priced below average and automation levels will be increased to improve contribution margins and make it acceptable to run second shift/overtime.

1. Broad Cost Leader
2. Niche Cost Leader
3. Cost Leader with Product Life Cycle Focus
4. Differentiation Strategy with a Product Life Cycle Focus
5. Broad Differentiation

1. This strategy will focus on the high technology segments (High End, Performance and Size).  Competitive advantage will be gained by distinguishing our products with excellent design, high awareness, easy accessibility, and product extenders.  Our R&D competency will keep our designs fresh and exciting.  Our products will keep pace with the market, offering improved size and performance.  The prices of our products will be above average and we will expand capacity as we generate higher demand.

1. Niche Differentiation
2. Niche Cost Leader
3. Cost Leader with Product Life Cycle Focus
4. Differentiation Strategy with a Product Life Cycle Focus
5. Broad Differentiation

1. The resources used in the Sales Budget are

1. E-mail, Trade Shows, Web Media and Print Media.
2. Print Media, Outside Sales, and Distributors.
3. Trade Shows, Outside Sales, Distributors, and Inside Sales.
4. Outside Sales, Distributors, and Inside Sales.
5. Trade Shows, Distributors, Outside Sales, Inside Sales, and Print Media.

1. When working with inside sales, each inside salesperson costs

1. $35,000.
2. $100,000.
3. $50,000.
4. $125,000.
5. $110,000 plus a commission of 1%.

1. When working with Distributors, each distributor costs

1. $35,000.
2. $100,000.
3. $50,000.
4. $125,000.
5. $110,000.

1. When working with Outside Sales, each salesperson costs

1. $35,000.
2. $100,000.
3. $50,000.
4. $125,000.
5. $110,000 plus a commission of 1%.

1. In only one product segment, diminishing returns for distributors is reached at

1. 75.
2. 12.
3. 15.
4. 45.
5. 30.

1. In only one product segment, diminishing returns for inside sales is reached at

1. 75.
2. 12.
3. 15.
4. 45
5. 30.

1. In only one product segment, diminishing returns for outside sales is reached at

1. 75.
2. 12.
3. 15.
4. 45.
5. 30.

1. The marketing budget detail sales screen allows companies to allocate their promotion budget to different media channels.  These media channels are:

1. Print Media, Outside Sales, Direct Mail, Trade Shows, and E-Mail.
2. Print Media, Direct Mail, Trade Shows, E-Mail, and Web Media.
3. Inside Sales, Outside Sales, and Trade Shows.
4. Direct Mail, E-Mail, Web Media, Print Media, and Television.
5. E-Mail, Web Media, Print Media, and Inside Sales.

1. When investing in print media, diminishing returns apply after

1. $700,000 per product.
2. $700,000 per segment.
3. $500,000 per product.
4. $300,000 per segment.
5. $800,000 per segment.

1. The potential reach for E-mail is rated as good for the

1. Traditional and Low End.
2. High and Low End.
3. Performance and Low End.
4. Performance and High End.
5. Size and Performance.

1. The potential reach for Trade Shows is rated as good for the

1. Traditional.
2. High End.
3. Performance and Low End.
4. Performance and High End.
5. Size and Performance.

1. The Promotion part of marketing in CapSim allows teams to allocate their time based on

1. market segments.
2. each Product.
3. promotion does not allow allocation of time.
4. each of the 5 designated promotional areas.

1. The time allocation on the advanced marketing module can be used to

1. make a greater effort by the sales staff which translates into increased demand for that segment.
2. make a greater effort by the sales staff which translates into increased demand for that product.
3. there isn’t a time allocation on the advanced marketing module.
4. increase the promotional budget resources to increase awareness.
5. huh?

1. In forecasting, it is not likely that you will take half of the sales unless

1. the product positioning is ideal.
2. the product meets the top 2 buying criteria and the price is low.
3. the positioning, age and MTBF are superior.
4. the price is at the low end of the range and the positioning, age and MTBF are superior.

1. Customer demand is driven by

1. price, product, promotion and TQM/Process Initiatives.
2. customer survey.
3. positioning and price.
4. market share.
5. market share, positioning and price.

1. The customer survey score is driven by

1. market share.
2. price.
3. 4P’s.
4. price and market share.
5. perceptual map, MTBF and price.

1. Process Management Initiatives

1. improve business procedures, resulting in improved efficiencies and cost structures.
2. improve product quality while reducing the time and resources required to design, manufacture, warehouse and ship products.
3. improve business procedures and product quality, resulting in improved efficiencies and costs structures.
4. improve product quality and business procedures.

1. TQM initiatives

1. improve business procedures, resulting in improved efficiencies and cost structures.
2. improve product quality while reducing the time and resources required to design, manufacture, warehouse and ship products.
3. improve business procedures and product quality, resulting in improved efficiencies and costs structures.
4. improve product quality resulting in improved cost structures.
5. improve product quality and business procedures.

1. This process management initiative reduces material cost and, to a lesser degree, labor costs.

1. Concurrent Engineering (CCE)/Six Sigma
2. Benchmarking
3. Continuous Product Improvement systems (CPI)
4. Channel Support systems
5. Quality Initiative Training (QIT)

1. This process management initiative reduces material costs and administrative overhead.

1. Benchmarking
2. Vendor/Just-in-Time Inventory (JIT)
3. Continuous Product Improvement systems (CPI)
4. Channel Support systems
5. Quality Initiative Training (QIT)

1. This process management initiative reduces labor costs.

1. Benchmarking
2. Vendor/Just-in-Time Inventory (JIT)
3. Channel Support systems
4. Quality Initiative Training (QIT)

1. This process management initiative increases the effectiveness of the Sales Budget and therefore demand.

1. Benchmarking
2. Vendor/Just-in-Time Inventory (JIT)
3. Continuous Product Improvement systems (CPI)
4. Channel Support systems
5. Quality Initiative Training (QIT)

1. This process management initiative reduces R&D cycle time,

1. Concurrent Engineering (CCE)
2. Benchmarking
3. Continuous Product Improvement systems (CPI)
4. Channel Support systems
5. Quality Initiative Training (QIT)

1. These TQM initiatives reduce administrative overhead; reduces the R&D cycle time and enhances the effectiveness of the promotion and sales budget.

1. Concurrent Engineering (CCE); Channel Support systems and Just-in-Time Inventory
2. Quality Function Deployment and Benchmarking
3. Continuous Product Improvement systems (CPI) and Just-in-Time Inventory
4. Channel Support systems and Six Sigma
5. Quality Initiative Training (QIT)

1. The TQM initiative reduces material costs and labor costs.

1. Concurrent Engineering (CCE)/Six Sigma
2. Benchmarking
3. Continuous Product Improvement systems (CPI)
4. Channel Support systems
5. Quality Initiative Training (QIT)

1. If there are 4 products listed in the Capstone Courier in the traditional segment that have a customer survey scoring of 32, 28, 22 and 14, then the top product’s demand would be:

1. 32%.
2. 50%.
3. 64%.
4. 33%.

1. One of the ways of calculating the top product’s demand is by

1. multiplying the total market share for that product in that segment by the total market demand for that segment.
2. multiplying the top demand percentage by the total market demand for that segment.
3. divide the top product segment’s score by the sum of all other scores in that segment (not counting fringe products).
4. divide the total demand for that market segment by the total number of products in that segment (not including fringe).

1. Combining size and performance creates a product attribute known as

1. MTBF.
2. consumer perception.
3. positioning.
4. physical perception.
5. a completed electric sensor.

1. Which statement is true?

1. Increasing in capacity and changes in automation can take less than a year to implement if the product already exists.  Sales of capacity take a full year to implement.
2. Increases in capacity and changes in automation take a full year to implement.  Sales of capacity are immediate.
3. Increases in capacity, changes in automation and sales of capacity take a full year to implement.
4. Increases in capacity, changes in automation and sales of capacity take less than a year to implement if the product already exists.

1. The traditional market segment is expected

1. none of these.
2. to grow at 14% per year.
3. to grow at a faster rate than the market.
4. to make up 27.5% of the electronic sensor market in five years from now.
5. to grow at a faster rate than the high end segment.

1. The sales channel effectiveness for the distributors is highest for

1. High End.
2. Performance, High and Size.
3. Traditional and Low.
4. Low End and High End.
5. Size.

1. When investing in direct mail, diminishing returns apply after

1. $700,000 per product.
2. $700,000 per segment.
3. $800,000 per product.
4. $800,000 per segment.
5. $500,000 per product.

1. The potential reach for direct mail is rated as good for the

1. Performance and Low End.
2. Performance and High End.
3. Traditional and Low End.
4. High and Low End.
5. Size and Performance.

1. This strategy will gain competitive advantage by distinguishing our products with an excellent design, high awareness, easy accessibility, and product extenders.  We will develop R&D competency that keeps our designs fresh and exciting.  Our products will keep pace with the market, offering improved size and performance.  We will price above average.  We will expand capacity as we generate higher demand in our markets:  High, Traditional and Low End.

1. Cost Leader with Product Life Cycle Focus
2. Differentiation Strategy with a Product Life Cycle Focus
3. Broad Cost Leader
4. Niche Differentiation
5. Broad Differentiation

1. Sales channel effectiveness for inside salespeople is highest for  

1. Traditional, Low end and High End
2. Performance and High End
3. Performance, Size and High End
4. Performance
5. High End

1. The performance segment places more importance on

1. age and reliability.
2. reliability and positioning.
3. price and age.
4. positioning and price.

1. Which market segment places the most importance on reliability?  

1. Traditional
2. Performance
3. Low End
4. Size
5. High End

1. What product attributes do Performance customers value the most?  

1. Age
2. Price
3. Positioning
4. Reliability
5. Other

1. The Competitive Intelligence Officer

1. thinks like the competitor by determining how that competitor measures success, looks to the future as to what the competition will do in the next year to two years, and evaluate how the competition can undercut your company’s performance.
2. a competitor’s production position.
3. monitors the competition on the production analysis portion of the Courier and evaluates the competitor’s marketing position in relation to their own.
4. needs strong analytical skills in order to determine the competition’s next move is and what threats the competition represent to all teams involved.
5. monitors and evaluates on the top two companies that are a threat to the existing team and tries to think like the competition and anticipate their next move through the production analysis portion of the Capstone Courier.

1. Customers that want proven products and current technology of moderate size and performance are in the

1. traditional segment
2. high End segment
3. low End segment
4. performance segment
5. size segment.

1. Customers that are willing to pay for products with cutting edge technology that are fast performing and small in size are in the  

1. traditional segment.
2. high end segment
3. low end segment
4. performance segment
5. size segment

1. What two factors are considered in both the rough cut and fine cut of the customer buying process?  

1. Price and Reliability
2. Price and Age
3. Age and Performance
4. Reliability and age

1. When a segment’s product supply exceeds demand, how much appeal, to the customer, will a product priced $1 above or below the segment price range lose?  

1. 5%
2. 10%
3. 15%
4. 20%
5. 0%

1. What section of the perceptual map is considered ideal for the low end segment?

1. Middle
2. Upper Right
3. Lower Right
4. Upper Left
5. Lower Left

1. Increasing performance and shrinking size does what to the material cost?  

1. Nothing
2. Increases
3. Decreases
4. Increases for traditional customers only.
5. Decreases for traditional customers only.

1. The promotion budget affects:  

1. awareness. 
2. brand equity.
3. performance.
4. size.
5. accessibility.

1. What is the starting awareness percentage of a new product?  

1. 15%
2. 65%
3. 40%
4. 25%
5. 20%

1. When investing in web media, diminishing returns apply after  

1. $500,000 per product.
2. $700,000 per product.
3. $700,000 per segment.
4. $600,000 per product.
5. $600,000 per segment. 

1. When investing in Trade Shows, diminishing returns apply after  

1. $700,000 per product.
2. $300,000 per segment.
3. $800,000 per product.
4. $300,000 per product.
5. $500,000 per product.

1. In order to achieve 100% accessibility, a team must:  

1. none of these.
2. have at least two products in the same segment.
3. have a combined sales budget of $4.0 million.
4. create awareness in the previous year.
5. spend $4 million on distribution channels.

1. How many assembly lines are there?  

1. Always exactly five per company
2. One for all companies
3. One per company
4. None of these.
5. One in each segment.

1. If you sell off a production line (capacity and automation), the amount of cash that the company will receive will be    

1. 65% of the original cost.
2. average cost of production for the previous year (market price).
3. 50% of the book value.
4. 50% of the acquisition cost.
5. 65% of the book value.

1. Inventory Carrying Cost is ___% of the average cost of production.

1. 13
2. 4
3. 10
4. 8
5. 12

1. What is the most important criteria to a “Traditional Segment” consumer?  

1. Price
2. MTBF
3. Positioning
4. Age
5. Performance

1. What is the most important criteria to a “High End Segment” customer?

1. Positioning
2. Performance
3. Price
4. Age
5. MTBF

1. What is the most important criteria to a “Size Segment” customer?  

1. Positioning        
2. Price
3. Age
4. MTBF
5. Performance

1. It takes ______ years to invent a product.  

1. 3 or 4 months
2. 6 months
3. More than 1 year but no more than 3 years
4. More than 3 years

1. A new unit of capacity costs $6 for the floor space plus $4 times  

1. hourly wage.
2. automation rating.
3. unit cost.
4. MTBF.
5. $0.65.

1. A functional manager is responsible for  

1. one of the five market segments.
2. R&D, Marketing, Production, Finance, Human Resources, and TQM/PI.
3. one of the five products in the starting product line.
4. none of these.
5. monitoring competitors in their entirety.

1. How many market segments are there?

1. 3
2. 4
3. 5
4. 6
5. 7

1. Customers go through a two-stage buying process: The Rough Cut and the Fine Cut. In the Rough Cut, buyers focus on four product characteristics. Which one of the following is NOT one of these four product characteristics?  

1. Performance
2. Age
3. Size
4. Reliability
5. Price

1. When investing in E-mail, diminishing returns apply after

1. $600,000 per segment.
2. $600,000 per product.
3. $800,000 per product.
4. $800,000 per segment.
5. $500,000 per product.

1. What is a market segment?

1. Group of customers with differing purchasing concerns
2. Area of perceptual map where all points intersect
3. Group of customers with similar purchasing concerns
4. Geographic area where customers are located
5. Common area of buying patterns

1. The company’s negotiation starting position for wages

1. is never more than 150% of the current contract.
2. is always lower than what Labor expects.
3. is always exactly 80% of the current contract.
4. is always half of the increase workers are asking for.
5. none of these.

1. Labor will strike for a maximum:

1. 10 days.
2. 84 days.
3. 60 days.
4. 30 days.
5. There is no strike maximum.

1. The interest rate on a bond ______ by________ for each______ in the bond rating category.

1. Increases; 0.5%; Decrease
2. Decreases; 1.4%; Decrease
3. Increases; 0.5%; Increases
4. Decreases; 1.4%; Increase
5. Increases; 7.5% ; Decrease

1. You are charged a ______ brokerage fee to issue bonds and ______ brokerage fee if you retire bonds prior to their maturation date.

1. 0%; 5%
2. 5%; 5%
3. 5%; 0%
4. 5%; 1.5%
5. 1.5%; 5%

1. EPS (Earning Per Share) is calculated by

1. adding net profit by the number of current shares.
2. dividing net profit by the number of current shares.
3. adding net profit to the number of shares outstanding.
4. dividing net profit by the number of shares outstanding.
5. none of these.

1. Which of the following is not a Process Management Initiative available to your company?

1. Concurrent Engineering
2. GEMI Sustainability
3. Continuous Process Improvement
4. UNEP Green
5. Channel Support System

1. Which of the following is not one of the five parts to the Situation Analysis:

1. Perceptual Map.
2. Demand Analysis.
3. Capacity Analysis.
4. Consumer Report.
5. Forecasting Analysis.

1. Products must plot within ______ units from the center of the circle on the Perceptual Map to survive the rough cut.

1. 3.0
2. 4.0
3. 1.0
4. 2.5

1. Quality Initiative Training can

1. increase demand.
2. decrease R&D cycle time.
3. decrease material costs.
4. decrease labor costs.
5. decrease administrative costs.

1. Investing in Vendor Just In Time can

1. reduce material costs and R&D cycle time.
2. reduce administrative costs and labor costs.
3. reduce R&D cycle time and increase demand.
4. reduce material costs and administrative costs.
5. reduce material costs and increase demand.

1. Adding one additional unit of capacity costs

1. $4 x Change (difference) in Automation Level
2. $6 + ($4 x Current Automation Level).
3. $6 x Change (difference) in Automation Level.
4. $4 + ($6 x Current Automation Level).
5. none of these.

1. How much does it cost for MTBF per 1,000 hours of reliability?

1. $0.50
2. $0.40
3. $0.30
4. $0.20
5. $0.10

1. How are the Starting Position and the Negotiation Ceiling related?

1. The Negotiation Ceiling is always 15% above the Starting Position.
2. They are not related.
3. Their values are equal.
4. The Negotiation Ceiling is always 10% beyond the Starting Position.
5. The Negotiation Ceiling is always 10% above the Starting Position.

1. Labor costs are driven by three factors:

1. wage and benefit rates, automation levels, and MTBF.
2. wage and benefit rates, positioning, and second shift.
3. wage and benefit rates, second shift, and MTBF.
4. wage and benefit rates, automation levels, and second shift.
5. wage and benefit rates, second shift, and material costs.

1. The sales channel effectiveness for the outside sales people is highest for

1. High End and Size.
2. Performance, High and Size.
3. Traditional and Low.
4. Low End and High End.
5. Size.

1. The potential reach for web media is rated as good for the

1. Performance and High End.
2. Size and Performance.
3. Traditional and Low End.
4. High and Low End.
5. Performance and Low End.

1. A 6 month project in R&D costs____________; while a 12 month project in R&D costs ________.

1. 1,000,000; 1,500,000
2. 650,000; 850,000
3. 500,000; 1,000,000
4. 750,000; 1,000,000
5. 1,000,000; 750,000

1. The potential reach for print media is rated as good for the

1. Performance and Low End.
2. Performance and High End.
3. Traditional and Low End.
4. High and Low End.
5. Size and Performance.

1. Stock price is a function of:

1. Book value, Earnings per Share, and Net Profit.
2. Book value, Dividend, and Retained Earnings.
3. Earnings per Share, Dividend, and Retained Earnings.
4. Earnings per Share, Dividend, and Net Profit. 
5. Book value, Earnings per Share, and Dividend.

1. Which of the following is true about the Accounts Receivable Lag and its implications on demand?

1. If you offer no credit, demand falls to about 60% of normal.
2. At 30 days, demand is 90%.
3. At 45 days, demand is 95%.
4. At 60 days, demand is 98.5%.
5. At 90 days, demand is 100%.

1. If your company offers no credit terms, demand

1. remains constant.
2. falls 25%.
3. falls 50%.
4. falls 65%.

1. A bond with the number 12.6S2005, indicates that:

1. the interest rate is 12.6%; due in May.
2. the interest rate is 12%; due on June 05.
3. the interest rate is 12%; due in June 2005.
4. the interest rate is 5%; due on December 6.
5. the interest rate is 12.6%; due on December 31, 2005.

1. Investing in Quality Function Deployment Effort can

1. reduce labor and administrative costs.
2. increase demand and reduce labor costs.
3. reduce R&D cycle time and increase demand.
4. reduce R&D cycle time and enhance the effectiveness of the promo and sales Budgets.
5. increase demand.

1. Investing in Concurrent Engineering can

1. reduce R&D cycle time.
2. reduce labor and administrative costs.
3. increase demand and reduce labor costs
4. reduce R&D cycle time and increase demand.

1. Investing in Channel Support Systems can

1. increase demand.
2. reduce R&D cycle time.
3. reduce material costs.
4. reduce labor costs.
5. reduce administrative costs.

1. If the previous year you reached 100% customer awareness in your company, this year what will you need to do to maintain this level?

1. There is nothing to do. I have already reached as much awareness as I could.
2. Spend the same amount of money spent the previous year to reach the same percentage of awareness this year.
3. I would only need to create 33% new awareness to maintain 100% this year.
4. I need to spend at least half of the money spent the previous year to reach 75% of the population.
5. None of these.

1. Teams can produce up to ______ products.

1. 9
2. 7
3. 8
4. 5
5. 6

1. A production line with 1000 units of capacity has a max production capability of:

1. 1000.
2. 1500.
3. 2500.
4. 2000.
5. as many as needed.

1. When purchasing increased Capacity and Automation, the new capacity becomes available

1. immediately.
2. in 1 year.
3. in 6 months.
4. in 2 years.
5. none of these.

1. Capacity is sold by

1. entering a zero in the Buy/Sell row on the Production Spreadsheet.
2. entering a null value in the Buy/Sell row on the Production Spreadsheet.
3. entering a negative number in the Buy/Sell row on the Marketing Spreadsheet.
4. entering a negative number in the Buy/Sell row on the Production Spreadsheet.
5. entering a positive number in the Buy/Sell row on the Production Spreadsheet.

1. Dividends are paid to the stockholders in

1. semi-annual installments at a rate per share that you establish at the beginning of the year.
2. annual installments at a rate per share that you establish at the beginning of the year.
3. You can choose from any of the above options.
4. None of the options are those listed in the Capstone® Team Member Guide.

1. Emergency loans are made at what rate over the normal Current Debt interest rate?

1. 5%
2. 7.5%
3. 10%
4. 12%
5. 25%

1. The Ideal Spot

1. is the best performance spot of a segment.
2. drifts faster than the segment.
3. drifts at same pace as the segment.
4. is located at the center of the segment.
5. drifts more slowly than the segment.

1. Where is proximity to the Ideal Spot particularly important?

1. in price-oriented segments.
2. in quality-oriented segments.
3. in all customer segments.
4. in high technology segments.
5. in low technology segments.

1. What is the size of the plant at the start of the simulation?

1. 5 assembly lines with space to add 1 more.
2. 5 assembly lines with space to add 3 more.
3. 5 assembly lines with space to add 2 more.
4. 8 assembly lines.
5. 0 – the plan can be built to team specification.

1. What are the Process Management Initiatives?

1. CPP, JIT, Quality Function Deployment Effort, Channel Support Systems, Concurrent Development, GEMI TQM Sustainability
2. Benchmarking, JIT, Quality Function Deployment Effort, Channel Support Systems, Concurrent Engineering
3. CPI, Benchmarking, QIT, Channel Support Systems, JIT, UNEP Green
4. CPI, UNEP Green, JIT, QIT, Channel Support Systems, Concurrent Engineering
5. GEM TQM Sustainability, CCE, JIT, QIT, Channel Support Systems, Concurrent Engineering

1. Each round is the equivalent of

1. two years.
2. none of these.
3. one year.
4. one quarter.
5. one-half year.

1. The Consumer Report rates product attributes as:

1. Good, Fair, or Poor.
2. Excellent, Satisfactory, or Unsatisfactory.
3. Excellent, Very Good, Good, Fair, or Poor.
4. Satisfactory or Unsatisfactory.
5. Other.

1. If you see a red flag on one of your spreadsheets, what does it mean?

1. The cell is locked.
2. You need to surrender.
3. You have an error.
4. There is more information.
5. You need to reenter your data.

1. Which one of these criteria is not a top product characteristic of at least one segment?  

1. Size
2. Performance
3. Price
4. Promotion
5. Age

1. Customer Awareness Reports:

1. each company’s level of accessibility.
2. percentage of Customers who bought the product.
3. percentage of Customers who knew about the product.
4. percentage of Customers who are in that segment.
5. each company’s success in pricing.

1. For positioning in the fine cut, which one is not right?

1. Traditional preferred position is located in the center of circle.
2. Low End preferred position is located upper left of circle.
3. High End preferred Position is located in the lower left of the circle.
4. Performance preferred position is located in the lower right of the circle.
5. Size preferred position is located in the lower right of the circle.

1. Which one is not the source of acquiring capital?

1. Profits
2. T-Bills
3. Current Debt
4. Stock
5. Bond

1. Price accounts for _________customers’ decision-making in the low end sector.

1. 75%
2. 95%
3. 53%
4. 47%
5. 43%

1. What does not drive length of R&D project?

1. The product's automation level on the Production line.
2. The amount of money You are willing to spend on it.
3. The number of R&D projects underway at the same time.
4. The proximity of the product's new location to an existing product in your company's line.
5. The labor strike.

1. With each year (round) customer awareness for each product decreases by:

1. 33%  
2. 25%
3. 30%  
4. 50%  
5. none of the above

1. Diminishing returns for a single year on TQM budgets become noticeable at

1. $3.0M.
2. $1.5M.
3. $2.0M.
4. $5.0M.
5. $1.0M.

1. High end customers prefer a product age of 0, at what age exceeds the fine cut for the product

1. 5 years.
2. 3 years.
3. 2 years.
4. 2.5 years.
5. 4 years.

1. Promotion expenditures reach diminishing returns at what level?

1. about $3M
2. $2.5M
3. $1M
4. $4M
5. none of the above

1. In the High End Segment, price as a buying criteria is accounts for which percentage of the consumer decision:

1. 53%.
2. 9%.
3. 23%.
4. 19%.
5. None of the above.

1. Companies with this strategy state their vision as follows: Low priced products for the whole industry, our brands offer solid value. Our primary stakeholders and bondholders, customers, stockholders and management.

1. Niche Cost Leader
2. Cost leader with Product Life Cycle Focus
3. Differentiation Strategy with a Product Life Cycle Focus
4. Broad Cost Leader
5. Broad Differentiation

1. In the Traditional Segment, age as a buying criteria is accounts for which percentage of the consumer decision:

1. 53%.
2. 43%.
3. 47%.
4. 29%.
5. None of the above

1. An accessibility of 60% means that ________.

1. only 60% of customers have an easy time finding a product, talking to a salesperson and taking delivery.
2. of the customers who cannot easily locate the product, half will seek it out.
3. 40% of customers will not buy the product.
4. a and b.
5. a and c.

1. How much higher are second shift wages than the first shift wages?

1. 0 %
2. 20 %
3. 40 %
4. 50 %
5. 60 %

1. The accounts payable lag has implications for production. At ________ days, suppliers withhold all material.

1. 120
2. 150
3. 160
4. 170
5. none of the above

1. The center spot of traditional products drifts _______ each year.

1. +0.7 performance, -0.7 size
2. +0.5 performance, -0.5 size
3. +0.9 performance, -0.9 size
4. +1.0 performance, -0.7 size
5. +0.7 performance, -1.0 size

1. Finance Decisions should be made

1. before the other departments enter their decisions.
2. at any time.
3. after the other departments have entered their decisions.
4. after the R&D department has entered its decisions.
5. none of the above.

1. If you sell all the capacity on a production line, Capstone interprets this as

1. a liquidation instruction and will sell your remaining inventory for one third of the average cost of production.
2. a liquidation instruction and will sell your remaining inventory for half the average cost of production.
3. a liquidation instruction and will sell your remaining inventory for 65 percent of the production cost.
4. a liquidation instruction and will sell your remaining inventory for 10 percent of the production cost.
5. a liquidation instruction but will continue to sell your remaining inventory for 100 percent of the production cost.

1. Customers evaluate the sensor industry based on:

1. Positioning.
2. Reliability.
3. Age.
4. Price.
5. All of the Above.

1. When the Human Resources module is activated, which areas must be addressed?

1. Complement (number of workers)
2. Caliber (recruitment of talent of workers)
3. Training (time workers spend in training)
4. Benefits (retirement planning for workers)
5. a, b, and c

1. A product’s __________ does not play a role in the rough cut

1. Positioning
2. Price
3. Reliability
4. Age
5. MBTF

1. In the Fine Cut, a product’s appeal is drive by its _________________.

1. Color
2. Customer Survey Score
3. Usage
4. Rough cut position
5. Demand

1. The ______________ details sales volume in all segments, reporting each product’s actual and potential sales.

1. Balance Sheet
2. Market Share Report
3. HR/TQM/Sustainability Report
4. Round Analysis
5. Annual Report

1. Automation levels are given on a scale of _____ to _____.

1. 0.0; 5.0
2. 1.0; 5.0
3. 0.0; 10.0
4. 1.0; 10.0
5. 5.0; 10.0

1. Which of the following will give your company an AAA bond rating:

1. Have contribution margins higher than 30%.
2. Have absolutely no debt.
3. Retire all of the current outstand stock.
4. Pay a dividend that is less than EPS.
5. Retire bonds before they are due.

1. Products that are modified through R&D:

1. Are always more attractive to customers.
2. Will allow the company to increase the price.
3. Are thought of as new products.
4. Are perceived to be half the age as before entering R&D.
5. Are always completed in less than one year.

1. Buying criteria order for which two segments is the same:

1. Traditional and Low End.
2. Performance and Size.
3. Size and High End.
4. High End and Performance.
5. Performance and Traditional.

1. Which of the following will result in the highest interest rate:

1. Issuing Bonds.
2. Issuing Stock.
3. Current Debt.
4. Emergency Loan.
5. Both a combination of a and b.

1. In the December customer survey, a product would not receive a perfect score of 100 if

1. it was priced at the bottom of the expected range.
2. it was perfectly positioned.
3. it had an MTBF at the middle of the expected range.
4. it had 100% awareness.
5. it had ideal age for segment.

1. Each product can be promoted by

1. Print media.
2. Direct mail.
3. Web media.
4. Trade shows.
5. All of the above.

1. Which one of the following statements regarding preferred position in fine cut is false?

1. Traditional customers want products located in the center of the circle.
2. Low end customers want the newest technology at the cheapest price.
3. High end customers want high performance and small size.
4. Performance customers prefer higher performance levels.
5. Size customers want smaller size.

1. The turnover rate

1. is the percentage of workers who left the company last year, excluding down-sizing.
2. does not ignore down-sizing factors.
3. is not driven by recruiting spend or training days.
4. is rooted in unavoidable factors like retirement, relocation and weeding out poor workers (about 5%).
5. a and d.

1. Workers will not strike approximately 7 days for

1. $1 difference in wages.
2. $300 difference in benefit package.
3. percentage point difference in Profit Sharing.
4. 1 hour difference in training.
5. percentage point difference in Annual Raise.

1. In the advanced marketing module the term “reach” refers to

1. the potential number of customers who would see the advertisement message.
2. the potential number of customers that can be reached by the sales personnel.
3. the number of times a message is repeated.
4. the primary segment towards which promotions will be targeted.
5. the fact that all segment respond similarly to each media type.

1. Capital used for financing activities can be acquired through_______________.

1. Current debt
2. Stock issues
3. Bond issues
4. Profits
5. All the above

1. The inner fine cut circles on the perceptual map have a radius of ________ units.

1. 2
2. 2.5
3. 2.75
4. 1.5
5. 3

1. Every year the Traditional segment circle drifts ____ in performance and _____ in size.

1. +1.0, -0.7
2. +0.7, -0.7
3. -0.7, +0.7
4. +0.5, -0.5
5. +0.9, -0.9

1. The growth rate for industry demand in the _____ segment is 18.3%.

1. Traditional
2. Low End
3. High End
4. Performance
5. Size

1. The cost to increase automation to 8.0 is equal to

1. First Shift Capacity X [$8 X (4 – Automation Level).
2. First Shift Capacity X [$8 X (4 + Automation Level).
3. First Shift Capacity X [$4 X (8 – Automation Level).
4. First Shift Capacity X [$4 X (8 + Automation Level).
5. First Shift Capacity X [$4 X (4 – Automation Level).

1. Companies can enter a Recruiting Spend budget up to an additional ____.

1. $5,000
2. $7,500
3. $10,000
4. $20,000
5. $50,000

1. The following describe the strategy of Differentiation with Product Lifecycle Focus, except:

1. develops an R&D competency to keep designs fresh and exciting.
2. concentrates on the High End, Traditional and Low End segments.
3. prices are below average.
4. products maintains pace with the market.
5. capacity is expanded as demand is increased.

1. One way to enter sales forecasts and production schedules is to develop a worst case/best case scenario.  Where would you enter your best case scenario and where would you enter your worst case scenario?

1. On the Marketing spreadsheet enter your worst case forecast in Your Sales Forecast cell, and   on the Production spreadsheet enter your best case forecast in the Production Schedule cell.
2. On the Marketing spreadsheet enter your best case forecast in Your Sales Forecast cell, and on the Production spreadsheet enter your worst case forecast in the Production Schedule cell.
3. Enter your best case forecast for both Your Sales Forecast cell on the Marketing spreadsheet and in the Production Schedule cell on the Production spreadsheet.
4. Enter your worst case forecast for both Your Sales Forecast cell on the Marketing spreadsheet and in the Production Schedule cell on the Production spreadsheet.
5. None of the above.

1. Which of the following statements is true about promo and sales budget?

1. From one year to the next, a third of those who knew about a product forgot about it.
2. If a product ended last year with an awareness of 50%, this year it will start with an awareness of approximately 33%.
3. If you have two or more products that meet a segment’s fine cut criteria, the sales budget for each product contributes to that segment’s accessibility percentage.
4. Companies must have at least two products in the segment’s fine cut to achieve 100% accessibility.
5. All of the above.

1. Which of the following is not one of the primary concerns in the Finance Department?

1. Acquiring the capital needed for company activities.
2. Establishing a dividend policy that maximizes the return to shareholders.
3. Setting accounts payable and accounts receivable policies.
4. Driving the financial structure of the firm, its relationship between debt and equity.
5. Deciding promo and sales budget.

1. Which of the following is not the correct yearly drift rate for the corresponding segment?

1. In the traditional segment performance drifts by +0.7 and size by -0.7.
2. In the low segment performance drifts by +0.5 and size by -0.5.
3. In the high end segment performance drifts by +0.9 and size by -0.9.
4. In the performance segment performance drifts by +1.0 and size by -0.7.
5. In the size segment performance drifts by -0.7 and size by +1.0.

1. The CAPSIM simulation is based on which industry?

1. sensor industry
2. textile industry
3. automotive industry
4. electronics industry

1. Your ___________ department controls the performance and size, therefore position of your sensor products within the market.

1. Planning
2. Finance
3. R&D
4. Marketing

1. Customers go through ________________stage(s) as they make their purchase decisions.

1. fine cut only
2. rough cut only
3. fine cut and rough cut
4. none of the above

1. Account Receivables lag impacts sales. At no credit terms, the appeal falls to about ______ %, at 30 days, appeal is _____ %, at 60 days, appeal is ______%.

1. 98.5, 92, 65
2. 65, 92, 98.5
3. 70, 85, 99
4. none of the above, there is no impact

1. Products with prices, MTBFs or positioning in the segments rough cut do contribute to the segments accessibility.

1. True
2. False

1. Which module in CAPSTONE allows investment in workforce training?

1. HR
2. Planning
3. Finance
4. Marketing

1. Investments in training leads to a __________ and _________.

1. higher costs, higher turnover
2. higher productivity, lower turnover
3. lower productivity, lower turnover
4. none of the above

1. In what circumstance would a company have a high market share relative to that of its competitors, though it is not making best use of resources available to it?

1. Market share is the best yard stick for measuring how effectively and efficiently a company is making use of its resources.
2. Where competitors underperform, a company may have a higher market share than that of its competitors though it is not making best use of its resources.
3. There is no way a company would have a high market share when it is not making best use of its resources.
4. A huge investment in customer awareness and accessibility is a smart way to increase market share.
5. By selling your products at prices lower than those of your competitors, you are sure to have a large market share.

1. A perfect product (with 100% awareness) starting with a survey score of 100, why is it that at 60% accessibility rating, 80% of customers have access to a product such that survey score declines from 100 to 80?

1. Because accessibility for a product is dependent on how well competitors’ products perform.
2. Of the 40% of customers without accessibility, 20% of them would make an extra effort to acquire the product.
3. Because accessibility rating is not reliable.
4. All of the above.

1. What is most likely to happen on introduction of a new product, if you do not buy the production line, in the year prior to the product’s introduction?

1. You cannot manufacture your new product.
2. If the product is moved close to existing products on the R&D spreadsheet, a few but insufficient number of the new product would be produced.
3. The product would automatically cease to exist.
4. The new product would stock out and there would be a loss in sales revenue.
5. None of the above.

1. R&D project length can be as long as ___________.

1. 3 months
2. 2 years
3. 1 year
4. 3 years
5. There is no limit, it is dependent on positioning and MTBF.

1. How best would you describe the financial position of the company, at the beginning of the simulation when control of the company is handed over to you?

1. Of moderate excellence
2. Close to bankrupt
3. Bankrupt
4. Heavily indebted but not close to bankruptcy
5. Bad but with ample opportunity for improvement

1. How is Contribution Margin calculated?

1. Material Cost – Labor Cost
2. Price*(Material Cost-Labor Cost)
3. Price – (Material cost + Labor cost)
4. Price – Material Cost
5. Profit –(Material Cost + Labor Cost)

1. The percentage of workers that left the company last year is the:

1. Complement.
2. Separated Employees.
3. Productivity Index.
4. Turnover rate.
5. None of the above.

1. At the start of the simulation, all assembly lines have an automation level between:

1. 2.0 and 4.0.
2. 3.0 and 5.0.
3. 4.0 and 6.0.
4. 5.0 and 7.0.
5. 6.0 and 8.0.

1. Segment price ranges drop _____ per year.

1. $1.00
2. $0.60
3. $0.90
4. $0.50
5. $2.00

1. Each year the company receives bond ratings.  The range of these bond ratings from best to worse is:

1. A to F.
2. A to C.
3. D to AA.
4. D to AAA.
5. AAA to D.

1. The December Customer Survey indicates

1. a product’s customer awareness.
2. how customers perceived the products in the segment.
3. a product’s actual and potential demand.
4. the accessibility of each product.
5. none of the above.

1. Period costs include

1. R&D.
2. promotion.
3. sales and administration expenses.
4. all of the above.

1. Lowering the automation level will result in

1. receiving a cash payment of $4 per unit of capacity.
2. a tax credit.
3. a charge.
4. immediate changes to production lines.
5. none of the above.

1. If all of the capacity on a production line is sold

1. all remaining inventory is sold for half the average cost of production.
2. a loss is written off on the income statement.
3. Capstone interprets the action as a liquidation instruction.
4. the company will receive a cash payment of 65% the original investment on capacity.
5. all of the above.

1. As a general rule, stock issues are used to:

1. Protect you from getting a loan from Big Al.
2. Fund the purchase of more market share.
3. Fund long term investments in capacity and automation.
4. Fund yearly sales and promotional budgets.
5. All of the above.

1. Which segment has the highest growth rate?

1. Traditional
2. Low end
3. High end
4. Performance
5. Size

1. Looking at the production, if the potential bar is higher than the actual one,

1. the company should spend more budget in sales.
2. the company over produced and missed sales opportunities.
3. the company produced the right amount and missed no sales opportunities.
4. the company under produced and missed sales opportunities.
5. the company should spend more budget in marketing.

1. If the potential bar is lower than the actual,

1. the company over produced and missed sales opportunities.
2. the company lost sales because other companies over produced.
3. the company picked up sales because other companies under produced.
4. the company produced as much as last period and under produced nothing.
5. the company under produced and missed sales opportunities.

1. Investing more than $5,000,000 in the same TQM initiative over a two or three year period creates

1. little or no additional improvement.
2. high additional improvement.
3. the same improvement than last period.
4. diminishing returns.

1. According to Capstone, Complement is best defined as:

1. the number of workers in your workforce this year.
2. letter from the simulation telling your team you did a good job.
3. the number of workers needed to reduce your overtime.
4. none of the above.

1. Capstone’s definition of reach in the marketing module is defined by the potential number of customers who would see the message. Based on this definition what segment has “fair” reach with direct mailing?

1. High End
2. Traditional
3. Low End
4. Performance
5. Size

1. Where are the credit policies for customer and supplier set in Capstone.xls?

1. Marketing spreadsheet
2. Production spreadsheet
3. Finance spreadsheet
4. Credit spreadsheet
5. None of the above

1. The primary difference between the Proformas and annual reports is:

1. Proformas report on product information; annual reports report on financial data.
2. Proformas are projections of results for the upcoming year; annual reports are results from the previous year.
3. Proformas are results from the previous year; annual reports are projections of results for the upcoming year.
4. Proformas report on financial data; annual reports report on product data.
5. None of the above.

1. What is the most important element that ensures the accuracy of the Proformas reports?

1. Production capacity
2. Marketing sales forecasts
3. R & D decisions
4. Financial decisions
5. All of the above

1. When should you purchase the production line to produce a new product?

1. The year you create the product
2. The year after you create the product
3. The year prior to its introduction
4. The year of its introduction
5. The year after its introduction

1. Which tool can you use as a quick comparison tool when conducting a competitive analysis concerning production?

1. Bond ratings
2. Stock price
3. Customer survey
4. Market share
5. None of the above

1. In the Perceptual Map each segment has a set of circles where:

1. The inner fine cut circles have a radius of 4 units.
2. The inner fine cut circles represent the heart of the segment where demand is strong.
3. At the center of each inner fine cut circle is the ideal spot where demand is strongest.
4. a and b.
5. a, b and c.

1. Different customer demands impact the segments so that:

1. The High End Segments drifts at a faster rate than the other segments.
2. High End, Performance and Size drift at a faster rate than the other segments.
3. All segments drift at the same rate but the customer expectations grow faster in the High End, Performance and Size Segments compared to the other segments.
4. All segments drift at the same rate but the costumer expectations grow faster in the High End Segment compared to the other segments.
5. All segments drift at different rate and the overlap between the segments increases over time.

1. Which screens are necessary to make a complete human resource decision when the advance module has been activated?

1. Production & human resources
2. Marketing & human resources
3. Finance & marketing
4. Human resources & TQM
5. None of the above choices are correct

1. What is working capital?

1. The funds needed for the day to day running of the company
2. The cash on hand at the end of the day
3. Profits less current liabilities
4. The amount of funds a company needs to run indefinitely
5. Total sales less total expenses

1. What happens if you increase the A/R lag days in the marketing screen?

1. Sales forecast increases
2. Collection time increases
3. Nothing
4. You pay a penalty
5. Both a and b are correct.

1. Which of the following is an important fact about working capital in Capsim?

1. The life blood of any organization
2. All of the money tied up in things you one day wish to sell
3. Can be seen on the balance sheet under the headings current assets and current liabilities
4. The change of working capital can be seen on the cash flow statement
5. All of the above are important

1. Which is false about production in Capsim?

1. Teams cannot produce beyond 100% capacity.
2. Teams should match their production schedule to the teams sales forecast.
3. There is a one year lag between purchase and use of additional production capacity.
4. There is a one year lag between purchase and use of additional production automation.
5. All of the above are true.