Capsim Practice Questions Sample

SAMPLE QUESTIONS ON CAPSIM
1.! When opening the Excel version of Capstone, you should do what to Macros?
a.! Enable
b.! Disable
c.! Engage
d.! Disarm
e.! Does not matter
Enable
2.! How many products does every team start with?
a.! One product
b.! Four products
c.! Ten products
d.! d
Five products
e.! None of the above
Five products
Q. If there are two identical products, one that has 100% accessibility and one that has 0%
accessibility.
A. the product with 100% accessibility will outsell the other 2 to 1 providing all other
attributes are identical.
Q. What is the difference between the market segments at the beginning of the round to the
final round?
A. The fine cuts overlap in the beginning and in year 8 only the rough cuts overlap.
Q. A segment managers task is to:
A. 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.! Customers that want low prices and are willing to sacrifice miniaturization and
performance are in the
a.! traditional segment.
b.! high End segment.
c.! low End segment.
d.! performance segment.
e.! size segment.
low End segment.
4.! Successful managers will:
a.! Create a strategy
b.! Coordinate company activities
c.! Analyze the market and its competing products
d.! A and B
e.! A, B, and C
A, B, and C
5.! The Perceptual Map is
"!
a.! a marketing tool used to track the position of the companys products against those of
the competitors.
b.! a marketing tool used to compare performance against size.
c.! a marketing tool used to compare reliability against price.
d.! a marketing tool used to compare age against position.
e.! a marketing tool used to compare time against motion.
a marketing tool used to track the position of the companys products against those of
the competitors.
6.! Customers that want small products and are willing to sacrifice performance are in the
a.! traditional segment.
b.! high End segment.
c.! low End segment.
d.! performance segment.
e.! size segment.
size segment.
7.! The Perceptual Map is
a.! a marketing tool used to track the position of the companys products against those of
the competitors.
b.! a marketing tool used to compare performance against size.
c.! a marketing tool used to compare reliability against price.
d.! a marketing tool used to compare age against position.
e.! a marketing tool used to compare time against motion.
a marketing tool used to track the position of the companys products against those of
the competitors.
8.! When tracking market segments on the performance and size perceptual map, which
segment moves or drifts the slowest?
a.! Low End
b.! Traditional
c.! Size
d.! Performance
e.! High End
Traditional
9.! What happens to a product priced at $1 above or below the segment guideline when a
segments product supply outstrips demand?
a.! It loses 25% of its appeal.
b.! It loses 10% of its appeal.
c.! It loses 20% of its appeal.
d.! It loses 15% of its appeal.
e.! None of the above.
It loses 20% of its appeal.
10.!At what dollar amount above the segment guidelines is all consumer appeal lost?
a.! $3
b.! $5
c.! $10
d.! $20
!
#!
$5
11.!Which of the following are not buying criteria?

a.! Positioning
b.! Automation
c.! Age
d.! Reliability
e.! Price
Automation
12.!MTBF in the segments should be
a.! MTBF(Performance) > MTBF (High End).
b.! MTBF (Low End)> MTBF (High End).
c.! MTBF (Low End)< MTBF (Size).
d.! a, b, and c.
e.! only a and c.
only a and c.
13.!The Traditional ideal spot is
a.! near the upper-left corner of its circle.
b.! near the lower-right of its circle.
c.! near the center of its circle.
d.! near the lower-left of its circle.
e.! near the upper-right of its circle
near the center of its circle.
14.!The preferred product perceived age for each sector peaks at:
a.! one year for high-end and five years for low end.
b.! one year for high-end and three years for low end.
c.! zero years for high-end and seven years for low end.
d.! zero years for high end and three years for low end.
e.! each segment wants a perceived age of zero.
zero years for high-end and seven years for low end.
15.!At which point does the perceived age of a traditional product peak?
a.! 2
b.! 1.5 to 2.5 years
c.! 7
d.! 0.5 to 2 years
e.! whenever its positioned
2
16.!Pricing plays a role
a.! when repositioning a product.
b.! in the rough cut stage of the purchase decision.
c.! in neither stage of the purchase decision.
d.! in the fine cut stage of the purchase decision.
e.! in both b and d.
in both b and d.
!
$!
17.!What are the top buying criteria that low end customers most value?
a.! Age
b.! Price
c.! Quality
d.! Positioning
e.! Time
Price
18.!What is the correct answer concerning the top buying criteria for the following segment:
a.! Positioning for low end and Price for high end.
b.! Reliability for low end and Performance for high end.
c.! Price for low end and Performance for high end.
d.! Price for low end and Positioning for high end.
e.! Positioning for low end and MTBF for high end
Price for low end and Positioning for high end.
19.!Low End customers emphasize buying criteria in which order?
a.! Price, Age, Positioning, Reliability
b.! Age, Reliability, Price, Positioning
c.! Positioning, Age, Price, Reliability
d.! Price, Positioning, Age, Reliability
e.! Price, Reliability, Positioning, Age
Price, Age, Positioning, Reliability
20.!If you are marketing to High End customers, which criteria are most important to them in
order of importance?
a.! Positioning, Age, Price, MTBF
b.! Price, Age, MTBF, Positioning
c.! Age, Price, Positioning, MTBF
d.! MTBF, Positioning, Age, Price
e.! Positioning, Age, MTBF, Price
Positioning, Age, MTBF, Price
21.!The relative cost of a products material cost increases as:
a.! size is increased.
b.! performance is decreased.
c.! MTBF is raised.
d.! automation stays the same.
e.! all of the above.
MTBF is raised.
22.!R&D completion time can be shortened
a.! by repositioning a product.
b.! the more a company changes a products MTBF.
c.! when several products are put into R&D at the same time.
d.! when a company takes advantage of existing technology.
e.! none of the above.
when a company takes advantage of existing technology.
%!
23.!R&D completion time depends on

a.! number of projects in R&D.
b.! automation rating.
c.! the age of the product.
d.! size of the product.
e.! a, b, and c.
a, b, and c.
24.!In Capstone
a.! the terms age and perceived age are not used interchangeably.
b.! the term MTBF means multiple transient business format.
c.! the terms age and perceived age are used interchangeably.
d.! all products will eventually have to be retired.
the terms age and perceived age are used interchangeably.
25.!If your team decides to introduce a new product, when should capacity and automation be
purchased?
a.! Two rounds prior to product release
b.! One round prior to product release
c.! The round of product release
d.! The round after product release
e.! Purchase of capacity and automation is not necessary for new product release
One round prior to product release
26.!An increase in promotional budgets have:
a.! Increasing returns over time.
b.! level returns over time.
c.! Decreasing returns over time.
d.! decreasing then increasing returns over time.
e.! increasing then decreasing returns over time.
decreasing returns over time.
27.!Promotion efforts are subject to
a.! economies of scale.
b.! increasing returns.
c.! diminishing returns.
d.! promotion expenditure.
e.! customer awareness.
diminishing returns.
28.!Assuming no additional product promotion, what percent of customers, reached through
last years marketing campaign will carry over into the current year?
a.! 33%
b.! 50%
c.! 67%
d.! 0%
67%
&!
29.!What effect do increases in the Promotion Budget have on a products Awareness?

a.! Increasing returns
b.! Constant returns
c.! Proportionally increasing returns
d.! Diminishing returns
Diminishing returns
30.!If you drop your sales budget to zero, accessibility drops to 0% in how many years?
a.! 1
b.! 2
c.! 3
d.! 4
e.! 5
3
31.!How is the strength of the sales channel measured?
a.! Accessibility on a scale of 0 to 50
b.! Accessibility on a scale of 0 to 100%
c.! Accessibility on a scale of 1 to 50
d.! Accessibility on a scale of 1 to 100%
e.! Accessibility on a scale of 1 to 25
Accessibility on a scale of 0 to 100%
32.!If your company has a sales budget of $3 million and drops it to zero,
a.! accessibility drops by $1 million every year.
b.! awareness drops to zero.
c.! accessibility drops to 0% in three years.
d.! sales will drop to zero.
accessibility drops to 0% in three years.
33.!How can assembly lines double their capacity?
a.! Speed up the production.
b.! Add a second shift.
c.! Double the material.
d.! Build more assembly lines.
e.! Assembly lines cannot be doubled.
Add a second shift.
34.!What is one drawback of increasing automation?
a.! The product requires increased time/expense for subsequent short-move
repositioning.
b.! Operating second shift becomes more expensive.
c.! Automation causes large leaps in repositioning.
d.! Automation slows production capability.
e.! It requires more employees for the production line.
The product requires increased time/expense for subsequent short-move repositioning.
'!
35.!If you increase automation from 2.0 to 5.0, the cost is:
a.!
$12 per unit of capacity.
b.!
c.!
d.!
e.!
Cannot determine with this information.
36.!If you reduce automation in the production component of Marketing, you will:
a.!
slow down R&D designs.
b.!
incur a retooling cost.
c.!
lose the game.
d.!
none of the above.
incur a retooling cost.
37.!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?
a.!
1,200,000
b.!
1,300,000
c.!
13,000,000
d.!
24,000,000
e.!
26,000,000
13,000,000
38.!If a line has a capacity of 100,000 units, the cost of changing the automation level 1 unit
either up or down is
a.! $60,000.
b.! $40,000.
c.! $400,000.
d.! $600,000.
$400,000.
39.!Depreciation is calculated:
a.! using a 3-yearMACRS.
b.! using a 5-yearMACRS.
c.! over a straight-line 5-year period.
d.! over a straight-line 10-year period.
e.! over a straight-line 15-year period.
over a straight-line 15-year period.
40.!Which three factors drive labor cost?
a.!
Production capacity
b.!
Wage and benefit rates
c.!
Automation levels
d.!
Second shift/Overtime costs
e.!
b, c, d
!
(!
b, c, d
41.!If current wages are set at $10/hour, what would be the minimum starting pay that your
company would offer?
a.!
$6/hour
b.!
$8/hour
c.!
$10/hour
d.!
$12/hour
e.!
none of the above
$8/hour
42.!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?
a.! $16.00 to $25.00
b.! $18.00 to $30.00
c.! $18.00 to $35.00
d.! $16.00 to $20.00
$18.00 to $35.00
43.!For Wages, the negotiation Starting Position cannot be less than ____% or more than
____% of the current contract.
a.! 75; 125
b.! 75; 150
c.! 80; 125
d.! 80; 150
e.! none of the above
80; 150
44.!To run perfectly, all HR department managers should know that
a.!
the negotiation starting point should not exceed 80%.
b.!
the starting point for benefits or wages should be between 0-150% of the
current contract.
c.!
all strike settlements should be halfway between the demand and the
negotiation ceiling.
d.!
all of the above is correct.
e.!
none of the above are true.
all strike settlements should be halfway between the demand and the negotiation ceiling.
45.!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?
a.! 2 weeks
b.! 4 weeks
c.! 8 weeks
d.! 16 weeks
e.! There is no way to determine how long the strike will last.
2 weeks
46.!In the Human Resources section, workers will strike one week for:
!
)!
a.! every 1% your Annual Raise Negotiation Ceiling is beneath Labors demand.
b.! every $300 your Benefits Negotiation Ceiling is beneath Labors demand.
c.! every 1% your Profit Sharing Negotiation Ceiling is beneath Labors demand.
d.! every $1 your Wage Negotiation Ceiling is beneath Labors demand.
all of the above.
47.!What happens to a company when its debt-to-assets ratio increases?
a.! Its credibility among creditors suffers.
b.! It envisages higher risk.
c.! Its short term interest rates increase.
d.! Its bond rating is reduced.
e.! c, d
c, d
48.!An AAA rating bond with a given prime rate at r, the bond rating slips to B if the current
debt interest rate is charged at
a.! R+2.5%
b.! R+0.5%
c.! R+1%
d.! R+1.5%
e.! R+2%
R+2.5%
49.!What is your bond rate? The prime rate is 10%; your current bond rating slipped one
category (from AAA to AA).
a.! 12.1%
b.! 10.5%
c.! 11.4%
d.! 11.2%
10.5%
50.!If your interest rate is 12.1%, and when you issue new bonds, the bond interest rate is:
a.! 10.7%.
b.! 12.1%.
c.! 13.5%.
d.! 6.1%.
e.! 12%.
13.5%.
51.!You pay no brokerage fee if you:
a.! issue bonds.
b.! retire bonds early.
c.! retire stocks.
d.! Allow bonds to mature to their due date.
e.! issue stocks.
Allow bonds to mature to their due date.
52.!In Capstone what would the bond number be for a bond with an interest rate of 6.5%
that matures in 2003?
!
*!
6.5S2003
a.!
b.!
c.!
d.!
e.!
6.5S03
2003S6.5
6.5S2003
.03S6.5
6.5.2003
53.!You are charged a____ brokerage fee to issue stock and ____ brokerage fee to retire
stock.
a.! 5%; 0%
b.! 5%; 1.5%
c.! 1.5%; 5%
d.! 0%; 5%
e.! 5%; 5%
5%; 1.5%
54.!The Credit Policy Lag has implications for:
a.! Customer survey score.
b.! Performance.
c.! Production.
d.! Size.
e.! a, c.
a, c.
55.!Budgeting money to Quality initiative will lead to these outcomes except:
a.! decrease R&D time.
b.! increase Demand.
c.! increase Labor Costs.
d.! increase efficiency.
e.! produce administrative savings.
increase Labor Costs.
56.!How can the R&D cycle time be reduced?
a.! Increasing automation levels
b.! Budgeting money to quality initiatives
c.! Increasing R&D budget
d.! Decreasing product portfolio
e.! Decreasing capacity
Budgeting money to quality initiatives
57.!Investing in CPI can
a.! reduce administrative costs.
b.! reduce material and administrative costs.
c.! reduce material costs and labor costs to a lesser degree.
d.! reduce labor costs and reduce R&D cycle time.
reduce material costs and labor costs to a lesser degree.
58.!Investing in CCE/Six Sigma can
a.! reduce labor and administrative costs.
b.! increase demand and reduce labor costs.
!
"+!
c.! reduce labor and material costs.

d.! increase demand.
reduce labor and material costs.
59.!Within the Process Management Initiatives, channel support systems
a.! reduce material cost.
b.! reduce labor costs.
c.! increase demand.
d.! reduce R&D cycle time.
increase demand.
60.!Benchmarking reduces
a.! Material cost.
b.! Research and Development time.
c.! Labor Cost.
d.! Administrative Cost.
e.! Demand.
Administrative Cost.
61.!Which of the following is an example of a TQM initiative?
a.! Continuous Process Improvement
b.! Just-in-Time[Inventory]
c.! Quality Function Deployment Effort
d.! Channel Support Systems
e.! Quality Initiative Training
Quality Function Deployment Effort
62.!Within the process management initiatives, concurrent engineering
a.! reduces material cost, inventors carrying costs and administrative overhead.
b.! reduces labor costs.
c.! increases the effectiveness of the sales budget and therefore demand.
d.! reduces time.
reduces time.
63.!The situation analysis consists of ______ parts.
a.! 3
b.! 4
c.! 5
d.! 6
e.! 7
5
64.!The situation analysis is
a.! a team exercise.
b.! designed to help your group understand the current market conditions.
c.! designed to help your group understand how the industry will evolve over the
next 8 years.
d.! a five-part analysis.
!
""!

all of the above.
65.!When plotting the segment locations for each round
a.! the goal is to determine the ideal spot location for each segment during the 8
years.
b.! the goal is to determine which products are the highest in demand.
c.! you use price on one axis and performance on the other.
d.! you should use Microsoft Excel.
the goal is to determine the ideal spot location for each segment during the 8 years.
66.!Which of the following questions is answered by the demand analysis?
a.! What drives our profit margins?
b.! How well do my products perform?
c.! Are the market segments growing at the same rate?
d.! Does the industry have adequate capacity to serve the market?
e.! All of the above.
Are the market segments growing at the same rate?
67.!Two points that should be considered in your strategy are
a.! the overall market is growing and prices are going down.
b.! the overall market is shrinking and prices are going down.
c.! it is easy to confuse unit market size with dollar market size.
d.! the overall market is growing and prices are going up and down.
it is easy to confuse unit market size with dollar market size.
68.!Two points that should be considered in your strategy are
a.! the overall market is growing and prices are going down.
b.! the overall market is shrinking and prices are going down.
c.! it is easy to confuse unit market size with dollar market size.
d.! the overall market is growing and prices are going up and down.
it is easy to confuse unit market size with dollar market size.
69.!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.
a.! $26 million
b.! $10 million
c.! $2.6 million
d.! $1 million
$10 million
70.!If you are currently producing 100,000 units and your automation level is 10, how much
will it cost you to double your capacity?
a.! $1,000,000
b.! $4,600,000
!
"#!
c.! $100,000
d.! $10,000
100 000 (6 + 4*10) = 4 600 000
71.!What is the right formula for capacity investment?
a.! Investment =Capacity x ($4 x Automation)
b.! Investment =Capacity x [$10 + ($4 x Automation)]
c.! Investment =Capacity x [$4 + ($6 x Automation)]
d.! Investment =Capacity x [$6 + ($4 x Automation)]
e.! Investment =Capacity x Automation
Investment =Capacity x [$6 + ($4 x Automation)]
72.!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?
a.! $60,000
b.! $20,000
c.! $10,000
d.! $520,000
e.! $260,000
10 000* (6+4*5) = 260 000, 10 000 * 4 *(10-5) =200000, 260 000 200 000 = 60 000
73.!If you are currently producing 100,000 units at an automation level of 5, how much
would it cost to maximize automation?
a.! $500,000
b.! $50,000
c.! $2,000,000
d.! $5,000,000
100 000 * 4 *(10 -5) = 2 000 000
74.!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?
a.! $12 million
b.! $24 million
c.! $10 million
d.! $6 million
2 000 000 * (5-2) *4 = 24 000 000
75.!Rapid movement of an existing product on the Perceptual Map requires
a.! reliability adjustment.
b.! low automation levels.
c.! high automation levels.
d.! none of the above.
low automation levels.
"$!
76.!If a products Price was $20, its Material $8, and its Labor $7, the Margin Per Unit would
be:
a.! $12.
b.! $13.
c.! $1.
d.! $5.
e.! $20.
20 (8 + 7) = 5
77.!If the price/product is $10 and the material cost/product is $2 and the labor cost/product is
$3, what is the margin/product?
a.! $6
b.! $2
c.! $4
d.! $3
10 (2 + 3) = 5
78.!In the Capstone simulation, what are the components of a products minimum material
cost?
a.! Cost of Inventory on hand and the cost to store it
b.! Reliability component cost and positioning component cost
c.! The costs associated with inventory, shipping and handling
d.! Level of automation and product reliability
Reliability component cost and positioning component cost
79.!The reliability component cost of a product with a 17,000 hour MTBF rating is:
a.! $5.10.
b.! $17.00.
c.! $51.00.
d.! $170.
e.! cost cannot be determined with information given.
17 000 * 0.3 /1 000 = 5.1
80.!The best case margin potential for a product with a top price of $30 and a minimum cost
of goods sold of $15 is:
a.! $45.
b.! $2.
c.! $450.
d.! $.50.
none of the above.
81.!The A/R lag is
a.! a marketing spreadsheet definition.
b.! the accounts receivable lag (in days).
c.! the time between customers receiving products and when they are expected to
pay for them.
d.! a, b and c
!
"%!
a, b, and c.
82.!What happens to a company when it increases the A/P lag?
a.!
It improves its cash position.
b.!
It deteriorates its cash position.
c.!
It loses credibility.
d.!
Its suppliers withhold material for production.
e.!
a, d.
a, d.
83.!Negotiation Ceilings which represent the maximum management is willing to pay are
always
a.!
12% above the starting positions.
b.!
c.!
d.!
unlimited.
e.!
none of the above.
84.!What effects do Process Management Initiatives have?
a.!
Administrative savings
b.!
Higher production efficiency
c.!
Increase in demand
d.!
Reduction of R&D times
e.!
All of the above.
All of the above.
85.!Which customer group or market segment seeks proven products using current
technology?
a.!
Traditional customers
b.!
Low End customers
c.!
High End customers
d.!
Performance customers
e.!
Size customers
Low End customers
86.!If a products Automation rating is substantially increased, it will:
a.!
take longer to move the product across the Perceptual Map.
b.!
take a shorter time to move the product across the Perceptual Map.
c.!
not allow the product to move across the Perceptual Map.
d.!
have no effect on the product moving across the Perceptual Map.
e.!
other.
take longer to move the product across the Perceptual Map.
87.!In only one product segment, diminishing returns for distributors is reached at
a.!
75.
b.!
12.
c.!
15.
!
"&!
15.
d.!
e.!
45.
30.
88.!In only one product segment, diminishing returns for inside sales is reached at
a.
75.
b.
12.
c.
15.
d.
45
e.
30.
30.
89.!In only one product segment, diminishing returns for outside sales is reached at
a.
75.
b.
12.
c.
15.
d.
45.
e.
30.
12.
90.!When investing in print media, diminishing returns apply after
a.
$700,000 per product.
b.
$700,000 per segment.
c.
d.
e.
91.!The potential reach for E-mail is rated as good for the
a.
Traditional and Low End.
b.
High and Low End.
c.
Performance and Low End.
d.
Performance and High End.
e.
Size and Performance.
92.!The potential reach for Trade Shows is rated as good for the
a.
Traditional.
b.
High End.
c.
d.
e.
High End.
93.!In forecasting, it is not likely that you will take half of the sales unless
a.! the product positioning is ideal.
b.! the product meets the top 2 buying criteria and the price is low.
c.! the positioning, age and MTBF are superior.
"'!
d.! the price is at the low end of the range and the positioning, age and MTBF are
superior.
the price is at the low end of the range and the positioning, age and MTBF are superior.
94.!Process Management Initiatives
a.! improve business procedures, resulting in improved efficiencies and cost structures.
b.! improve product quality while reducing the time and resources required to design,
manufacture, warehouse and ship products.
c.! improve business procedures and product quality, resulting in improved efficiencies
and costs structures.
d.! improve product quality and business procedures.
improve business procedures, resulting in improved efficiencies and cost structures.
95.!This process management initiative reduces material cost and, to a lesser degree, labor
costs.
a.
Concurrent Engineering (CCE)/Six Sigma
b.
Benchmarking
c.
Continuous Process Improvement systems (CPI)
d.
Channel Support systems
e.
Quality Initiative Training (QIT)
Continuous Process Improvement systems (CPI)
96.!This process management initiative reduces material costs and administrative overhead.
a.
Benchmarking
b.
Vendor/Just-in-Time Inventory (JIT)
c.
Continuous Product Improvement systems (CPI)
d.
e.
97.!This process management initiative reduces labor costs.
a.
Benchmarking
b.
c.
d.
1.
This process management initiative reduces R&D cycle time,
a.
Concurrent Engineering (CCE)
b.
Benchmarking
c.
d.
e.
Concurrent Engineering (CCE)
98.!This process management initiative increases the effectiveness of the Sales Budget and
therefore demand.
a.
Benchmarking
b.
!
"(!
c.
d.
e.
99.!If there are 4products listed in the Capstone Courier in the traditional segment that have a
customer survey scoring of 32, 28, 22 and 14, then the top products demand would be:
a.
32%.
b.
50%.
c.
64%.
d.
33%.
33%.
100.! The TQM initiative reduces material costs and labor costs.
a.
b.
Benchmarking
c.
d.
e.
101.! The traditional market segment is expected
a.! none of these.
b.! to grow at 14%per year.
c.! to grow at a faster rate than the market.
d.! to make up 27.5%of the electronic sensor market in five years from now.
e.! to grow at a faster rate than the high end segment.
to make up 27.5%of the electronic sensor market in five years from now.
102.! The sales channel effectiveness for the distributors is highest for
a.! High End.
b.! Performance, High and Size.
c.! Traditional and Low.
d.! Low End and High-end.
e.! Size.
Traditional and Low.
103.! The potential reach for direct mail is rated as good for the
a.!
b.!
c.!
d.!
High and Low End.
e.!
104.! Sales channel effectiveness for inside salespeople is highest for
a.
Traditional, Low-end and High End
b.
Performance and High End
c.
Performance, Size and High End
!
")!
d.
Performance
e.
High End
Performance
105.! The performance segment places more importance on
a.
age and reliability.
b.
reliability and positioning.
c.
price and age.
d.
positioning and price.
e.
Age and positioning
reliability and positioning.
106.! At what rate is inventory carrying cost charged?
a.
6%
b.
8%
c.
10%
d.
12%
e.
14%
12%
107.! What two factors are considered in both the rough cut and fine cut of the customer
buying process?
a.
Price and Reliability
b.
Price and Age
c.
Age and Performance
d.
Reliability and age
Price and Reliability
108.! When a segments product supply exceeds demand, how much appeal, to the
customer, will a product priced $1 above or below the segment price range lose?
a.
5%
b.
10%
c.
15%
d.
20%
e.
0%
20%
109.! What section of the perceptual map is considered ideal for the low end segment?
a.
Middle
b.
Upper Right
c.
Lower Right
d.
Upper Left
e.
Lower Left
Upper Left
"*!
110.! What is the starting awareness percentage of a new product?

a.
15%
b.
65%
c.
40%
d.
25%
e.
20%
25%
111.! In order to achieve 100% accessibility, a team must:
a.
none of these.
b.
have at least two products in the same segments fine cut.
c.
have a combined sales budget of $4.0 million.
d.
create awareness in the previous year.
e.
spend $4 million on distribution channels.
have at least two products in the same segments fine cut.
112.! At the start of the simulation, your production plant has ___lines with room for
____more
a.
5, 5
b.
5, 2
c.
5, 1
d.
5, 3
e.
5, 4
5, 3
113.! If you sell off a production line (capacity and automation), the amount of cash that the
company will receive from the sales of capacity will be
a.!
65% of the original value.
b.!
average cost of production for the previous year (market price).
c.!
50% of the book value.
d.!
50% of the acquisition cost.
e.!
65% of the book value.
65% of the original value
114.! Inventory Carrying Cost is ___% of the average cost of production.
a.
13
b.
4
c.
10
d.
8
e.
12
12
115.! Traditional customers consider this buying criteria to be the most important
a.
Price
b.
MTBF
c.
Positioning
!
#+!
d.
e.
Age
Age
Performance
116.! What is the most important criteria to a High End Segment customer?
a.
Positioning
b.
Performance
c.
Price
d.
Age
e.
MTBF
Positioning
117.! Size Segment customer consider this buying criteria to be the most important
a.
Positioning
b.
Price
c.
Age
d.
MTBF
e.
Performance
Positioning
118.! A new unit of capacity costs $6 for the floor space plus $4 times
a.
hourly wage.
b.
automation rating.
c.
unit cost.
d.
MTBF.
e.
$0.65.
automation rating
119.! Which of the following buying criteria does not have a rough cut?
a.
Performance
b.
Age
c.
Size
d.
Reliability
e.
Price
Age
120.! What is a market segment?
a.
Group of customers with differing purchasing concerns
b.
Area of perceptual map where all points intersect
c.
Group of customers with similar purchasing concerns
d.
Geographic area where customers are located
e.
Common area of buying patterns
Group of customers with similar purchasing concerns
#"!
121.! The companys negotiation starting position for wages

a.
is never more than 150% of the current contract.
b.
is always lower than what Labor expects.
c.
is always exactly80% of the current contract.
d.
is always half of the increase workers are asking for.
e.
none of these.
is never more than 150% of the current contract.
122.! Labor will strike for a maximum:
a.
10 days.
b.
84 days.
c.
60 days.
d.
30 days.
e.
There is no strike maximum.
84 days.
123.! The interest rate on a bond ______ by________ for each______ in the bond rating
category.
a.
Increases; 0.5%; Decrease
b.
Decreases; 1.4%; Decrease
c.
Increases; 0.5%; Increases
d.
Decreases; 1.4%; Increase
e.
124.! You are charged a______ brokerage fee to issue bonds and ______ brokerage fee if
you retire bonds prior to their maturation date.
a.
0%; 5%
b.
5%; 5%
c.
5%; 0%
d.
5%; 1.5%
e.
1.5%; 5%
5%; 1.5%
125.! Which of the following is not a Process Management Initiative available to your
company?
a.
Concurrent Engineering
b.
GEMI Sustainability
c.
Continuous Process Improvement
d.
UNEP Green
e.
Channel Support System
GEMI Sustainability
126.! Which of the following is not one of the five parts to the Situation Analysis:
a.
Perceptual Map.
!
##!
b.
Demand Analysis.
c.
Capacity Analysis.
d.
Consumer Report.
e.
Forecasting Analysis.
Forecasting Analysis.
127.! Products that are halfway between the fine and rough cut circle will experience a drop
in customer survey score by:
a.
1%
b.
50%
c.
10%
d.
99%
50%
128.! Quality Initiative Training can
a.
increase demand.
b.
decrease R&D cycle time.
c.
decrease material costs.
d.
decrease labor costs.
decrease labor costs.
129.! Investing in Vendor Just In Time can
a.!
reduce material costs and R&D cycle time.
b.!
reduce administrative costs and labor costs.
c.!
reduce time and increase demand.
d.!
reduce material costs and administrative costs.
e.!
reduce material costs and increase demand.
reduce material costs and administrative costs.
130.! Adding one additional unit of capacity costs
a.!
$4 x Change(difference) in Automation Level
b.!
$6 + ($4 x Current Automation Level).
c.!
$6 x Change(difference) in Automation Level.
d.!
$4 + ($6 x Current Automation Level).
e.!
none of these.
$6 + ($4 Automation Level).
131.! How much does it cost for MTBF per 1,000 hours of reliability?
a.!
$0.50
b.!
$0.40
c.!
$0.30
d.!
$0.20
e.!
$0.10
$0.30
132.! How are the Starting Position and the Negotiation Ceiling related?
!
#$!
a.!
The Negotiation Ceiling is always 15% above the Starting Position.
b.!
They are not related.
c.!
Their values are equal.
d.!
The Negotiation Ceiling is always 10% beyond the Starting Position.
e.!
133.! Labor costs are driven by:
a.
Wage and benefit rates
b.
Automation levels
c.
Second shift
d.
TQM investment
e.
All of the above
All of the above
134.! The sales channel effectiveness for the outside sales people is highest for
a.
High End and Size.
b.
Performance, High and Size.
c.
Traditional and Low.
d.
Low End and High-end.
e.
Size.
High End and Size.
135.! The potential reach for web media is rated as good for the
a.
b.
c.
d.
High and Low End.
e.
Performance and Low-end.
136.! A 6-month project in R&D costs____________; while a 12-month project in R&D
costs________.
a.
1,000,000; 1,500,000
b.
650,000; 850,000
c.
500,000; 1,000,000
d.
750,000; 1,000,000
e.
1,000,000; 750,000
500,000; 1,000,000
137.! The potential reach for print media is rated as good for the
a.
b.
c.
d.
High and Low End.
e.
!
#%!
138.! Investing in Quality Function Deployment Effort can

a.
reduce labor and administrative costs.
b.
increase demand and reduce labor costs.
c.
d.
reduce time and enhance the effectiveness of the promo and sales Budgets.
e.
increase demand.
reduce time and enhance the effectiveness of the promo and sales Budgets.
139.! Investing in Concurrent Engineering can
a.
reduce time and lower R&D costs
b.
reduce labor and administrative costs.
c.
increase demand and reduce labor costs
d.
reduce time and lower R&D costs
140.! Investing in Channel Support Systems can
a.
increase demand.
b.
reduce time.
c.
reduce material costs.
d.
reduce labor costs.
e.
reduce administrative costs.
increase demand.
141.!
a.
b.
c.
d.
e.
2000.
A production line with 1000 units of capacity has a max production capability of:
1000.
1500.
2500.
2000.
as many as needed.
142.! Your inventory for a product will be automatically liquidated at half average cost of
production if you
a.
Sell all the capacity on the corresponding production line
b.
Sell all but one unit of capacity on the corresponding production line
c.
Increase automation level of the corresponding production line
d.
Buy new capacity on the corresponding production line
e.
None of the above
143.! Emergency loans are made at what rate over the normal Current Debt interest rate?
a.
5%
b.
7.5%
c.
10%
!
#&!
d.
12%
e.
25%
7.5%
144.! Your inventory for a product will be automatically liquidated at half average cost of
production if you
a.
b.
Sell all but one unit of capacity on the corresponding production line
c.
Increase automation level of the corresponding production line
d.
Buy new capacity on the corresponding production line
e.
None of the above
145.! The Ideal Spot
a.
is the best performance spot of a segment.
b.
drifts faster than the segment.
c.
drifts at same pace as the segment.
d.
is located at the center of the segment.
e.
drifts more slowly than the segment.
drifts at same pace as the segment.
146.! Ideal Spot is particularly important for
a.
low-price-oriented segments.
b.
high reliability-oriented segments.
c.
all product segments.
d.
high technology segments.
e.
low technology segments.
high technology segments.
147.! If you see a red flag on one of your spreadsheets, what does it mean?
a.
The cell is locked.
b.
You need to surrender.
c.
You have an error.
d.
There is more information.
e.
You need to reenter your data.
There is more information.
148.! For positioning in the fine cut, which one is not right?
a.
Traditional preferred position is located in the center of circle.
b.
Low End preferred position is located upper left of circle.
c.
High End preferred Position is located in the lower left of the circle.
d.
Performance preferred position is located in the lower right of the circle.
High End preferred Position is located in the lower left of the circle.
#'!
149.! Which one is not the source of acquiring capital?

a.
Profits
b.
T-Bills
c.
Current Debt
d.
Stock
e.
Bond
a.
T-Bills
150.! Price accounts for _________customers decision-making in the low end sector.
a.
75%
b.
95%
c.
53%
d.
47%
e.
43%
53%
151.! What does not drive length of R&D project?
a.
The product's automation level on the Production line.
b.
The amount of money you are willing to spend on it.
c.
The number of R&D projects underway at the same time.
d.
The proximity of the product's new location to an existing product in your company's
line.
e.
The labor strike.
The labor strike.
152.! High end customers prefer a product age of 0, at what age exceeds the fine cut for the
product
a.
5 years.
b.
3 years.
c.
2 years.
d.
2.5 years.
e.
4 years.
2 years.
153.!
a.
b.
c.
d.
e.
50 %
How much higher are second shift wages than the first shift wages?
0%
20 %
40 %
50 %
60 %
154.! The accounts payable lag has implications for production. At ________ days,
suppliers withhold all material.
a.
120
b.
150
!
#(!
c.
d.
e.
150
160
170
none of the above
155.! The center spot of traditional products drifts_______ each year.

a.
+0.7 performance, -0.7 size
b.
c.
d.
e.
156.! The ______________ details sales volume in all segments, reporting each products
actual and potential sales.
a.
Balance Sheet
b.
Market Share Report
c.
HR/TQM/Sustainability Report
d.
Round Analysis
e.
Annual Report
Market Share Report
157.! Which of the following will give your company an AAA bond rating:
a.
Have contribution margins higher than 30%.
b.
Have absolutely no debt.
c.
Retire all of the current outstand stock.
d.
Pay a dividend that is less than EPS.
e.
Retire bonds before they are due.
Have absolutely no debt
158.! The order of the 4 buying criteria is the same for the following two segments:
a.!
b.!
Performance and Size.
c.!
Size and High End.
d.!
High End and Performance.
e.!
Performance and Traditional.
Size and High End.
159.! In the December customer survey, a product would not receive a perfect score of 100
if
a.!
it was priced at the bottom of the expected range.
b.!
it was perfectly positioned.
c.!
it had an MTBF at the middle of the expected range.
d.!
it had 100% awareness.
e.!
it had ideal age for segment.
it had an MTBF at the middle of the expected range.
#)!
160.! Which one of the following statements regarding preferred position in fine cut is
false?
a.! Traditional customers want products located in the center of the circle.
b.! Low end customers want the high performance and large sized product.
c.! High end customers want high performance and small sized product.
d.! Performance customers prefer higher performance product.
Low end customers want the high performance and large sized product.
161.! The inner fine cut circles on the perceptual map have a radius of ________ units.
a.
2
b.
2.5
c.
2.75
d.
1.5
e.
3
2.5
162.! The cost to increase automation to 8.0 is equal to
a.
First Shift Capacity X [$8 X (4 Automation Level).
b.
First Shift Capacity X [$8 X (4 + Automation Level).
c.
d.
First Shift Capacity X [$4 X (8 + Automation Level).
e.
163.! Companies can enter a Recruiting Spend budget up to an additional ____.
a.
$5,000
b.
$7,500
c.
$10,000
d.
$20,000
e.
$50,000
$5,000
164.! The following describe the strategy of Differentiation with Product Lifecycle Focus,
except:
a.
develops an R&D competency to keep designs fresh and exciting.
b.
concentrates on the High End, Traditional and Low End segments.
c.
prices are below average.
d.
products maintain pace with the market.
e.
capacity is expanded as demand is increased.
prices are below average.
165.! Customers go through ________________stage(s) as they make their purchase
decisions.
a.
fine cut only
b.
rough cut only
c.
fine cut and rough cut
d.
none of the above
!
#*!
fine cut and rough cut

166.! Decisions on a products prices and MTBFs in its segments rough cut can also affect
the products demand.
a.
True
b.
False
True
167.! R&D project length can be as long as___________.
a.
3 months
b.
2 years
c.
1 year
d.
3 years
e.
There is no limit, it is dependent on positioning and MTBF.
3 years
168.! Your company was formed ______________
a.
As a start-up venture
b.
Buy a merger of two separate companies
c.
When a former monopoly was broken up into identical competitor
d.
After emerging from bankruptcy
e.
None of the above
When a former monopoly was broken up into identical competitor
169.! How is Contribution Margin calculated?
a.
Material Cost Labor Cost
b.
Price*(Material Cost-Labor Cost)
c.
Price (Material cost + Labor cost)
d.
Price Material Cost
e.
Profit (Material Cost + Labor Cost)
Price (Material cost + Labor cost)
170.! At the start of the simulation, all assembly lines have an automation level between:
a.
2.0 and 4.0.
b.
3.0 and 5.0.
c.
4.0 and 6.0.
d.
5.0 and 7.0.
e.
6.0 and 8.0.
3.0 and 5.0.
171.! Each year the company receives bond ratings. The range of these bond ratings from
best to worse is:
a.
A to F.
b.
A to C.
c.
D to AA.
d.
D to AAA.
e.
AAA to D.
!
$+!
AAA to D.
172.! Lowering the automation level will result in
a.
receiving a cash payment of $4 per unit of capacity.
b.
a tax credit.
c.
a charge.
d.
immediate changes to production lines.
e.
none of the above.
a charge.
173.! As a general rule, stock issues are used to:
a.
Protect you from getting a loan from Big Al.
b.
Fund the purchase of more market share.
c.
Fund long term investments in capacity and automation.
d.
Fund yearly sales and promotional budgets.
e.
All of the above.
Fund long term investments in capacity and automation
174.! Which segment has the highest growth rate?
a.
Traditional
b.
Low end
c.
High end
d.
Performance
e.
Size
Performance
175.! According to Capstone, Complement is best defined as:
a.
the number of workers in your workforce this year.
b.
letter from the simulation telling your team you did a good job.
c.
the number of workers needed to reduce your overtime.
d.
none of the above.
the number of workers in your workforce this year.
176.! Capstones 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?
a.
High End
b.
Traditional
c.
Low End
d.
Performance
e.
Size
High End
177.! Where are the credit policies for customer and supplier set in Capstone.xls?
a.
Marketing spreadsheet
b.
Production spreadsheet
c.
Finance spreadsheet
!
$"!
d.
Credit spreadsheet
e.
None of the above
Marketing spreadsheet
178.! What is the most important element that ensures the accuracy of the Proformas
reports?
a.
Production capacity
b.
Marketing sales forecasts
c.
R & D decisions
d.
Financial decisions
e.
All of the above
Marketing sales forecasts
179.! When should you purchase the production line to produce a new product?
a.
The year you create the product
b.
The year after you create the product
c.
The year prior to its introduction
d.
The year of its introduction
e.
The year after its introduction
The year prior to its introduction
180.! Which tool can you use as a quick comparison tool when conducting a competitive
analysis concerning production?
a.
Bond ratings
b.
Stock price
c.
Customer survey
d.
Market share
e.
None of the above
Customer survey
181.! Which screens are necessary to make a complete human resource decision when the
advance module has been activated?
a.
Production & human resources
b.
Marketing & human resources
c.
Finance & marketing
d.
Human resources & TQM
e.
None of the above choices are correct
Production & human resources
182.! What is working capital?
a.
Current asset minus current liability
b.
The cash on hand at the end of the day
c.
Profits less current liabilities
d.
The amount of funds a company needs to run indefinitely
e.
Total sales less total expenses
Current asset minus current liability
183.! What happens if you increase the A/R lag days in the marketing function?
a.
Sales forecast increases
!
$#!
b.
Collection time increases
c.
Nothing
d.
You pay a penalty
e.
Both a and b are correct
Both a and b are correct.
184.! Which is false about production in Capsim?
a.
Teams cannot produce beyond 100% capacity.
b.
Teams should match their production schedule to the teams sales forecast.
c.
There is a one-year lag between purchase and use of additional production capacity.
d.
There is a one-year lag between purchase and use of additional production
automation.
e.
All of the above are true.
Teams cannot produce beyond 100% capacity
$$!

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SAMPLE QUESTIONS ON CAPSIM

e.! None of the above

11.!Which of the following are not buying criteria?

23.!R&D completion time depends on

29.!What effect do increases in the Promotion Budget have on a products Awareness?

c.! reduce labor and material costs.

e.! all of the above.

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

121.! The companys negotiation starting position for wages

138.! Investing in Quality Function Deployment Effort can

149.! Which one is not the source of acquiring capital?

155.! The center spot of traditional products drifts_______ each year.

fine cut and rough cut

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