Margin
The reason for the stock price becoming stagnant was our products became outdated. Our low tech product had an age of 5 years and our sales and marketing penetration dropped by 1/3. Our plan was to update the low tech product (Able) and bring the age down to 2 years old. We were also going to increase capacity by 500 and lower the price by $2.00. By the third round, my team reached full automation with Able, and our margins were excellent. The labor cost was $7.55 per sensor, $3.10 dollars less than our nearest competitor team Eat. That was a ten percent savings in production costs per processer. To further increase the low-tech and high tech product margin, we set the MTBF to be on the lower half of the customer buying criteria. …show more content…
In round one, we had full capacity production and sold 1,561 units, leaving 0 units in inventory. We invested in capacity and in round two, the manufacturing plant could produce 2,000 sensors, thus, the team decided to hit full production again in round 2. Full production in round 2 produced 1,921 units, but only 1,602 units sold. Therefore, the team was left with 319 units in inventory. Nonetheless, having inventory on hand was a positive outcome. The intention was to have some inventory left over, preferably 100 units. The reason for preferring some inventory is to keep the customer satisfaction score from suffering. When consumers go to a store are manufacturers to purchase products and they are out of stock, the consumers are unhappy because the company was unable to fulfil their expectations. Customers expect inventory to ship within a certain amount of time to be satisfied (Jingshan, Enginarlar, & Meerkov, 2004). Similarly, suppliers expect to be paid in a reasonable amount of time. Therefore, team Andrews did not modify the default 30-day accounts payable (AP) setting in Capsim. Keeping a sounds relationship with suppliers is important. If my team extended the AP setting, the company would have more cash on hand for other items, thus inflating the cash flow, but the consequence of jeopardizing a supplier relationship and being short on parts was not worth the …show more content…
Having the opportunity to run a multimillion-dollar organization without real word consequences enable the team to take risks and try strategies. I am confident the decisions to overproduce in round four and overlooking cuts in material costs would have been recognized with a more collaborative team. Nonetheless, I am thankful to have the opportunity to run the RnD, Marketing, Production, and Financial departments. My understanding of the interrelated departmental effects enhances the importance of a transparent vision and solid core values of an organization. I look forward to applying my new skills in a real world
The reason for the stock price becoming stagnant was our products became outdated. Our low tech product had an age of 5 years and our sales and marketing penetration dropped by 1/3. Our plan was to update the low tech product (Able) and bring the age down to 2 years old. We were also going to increase capacity by 500 and lower the price by $2.00. By the third round, my team reached full automation with Able, and our margins were excellent. The labor cost was $7.55 per sensor, $3.10 dollars less than our nearest competitor team Eat. That was a ten percent savings in production costs per processer. To further increase the low-tech and high tech product margin, we set the MTBF to be on the lower half of the customer buying criteria. …show more content…
In round one, we had full capacity production and sold 1,561 units, leaving 0 units in inventory. We invested in capacity and in round two, the manufacturing plant could produce 2,000 sensors, thus, the team decided to hit full production again in round 2. Full production in round 2 produced 1,921 units, but only 1,602 units sold. Therefore, the team was left with 319 units in inventory. Nonetheless, having inventory on hand was a positive outcome. The intention was to have some inventory left over, preferably 100 units. The reason for preferring some inventory is to keep the customer satisfaction score from suffering. When consumers go to a store are manufacturers to purchase products and they are out of stock, the consumers are unhappy because the company was unable to fulfil their expectations. Customers expect inventory to ship within a certain amount of time to be satisfied (Jingshan, Enginarlar, & Meerkov, 2004). Similarly, suppliers expect to be paid in a reasonable amount of time. Therefore, team Andrews did not modify the default 30-day accounts payable (AP) setting in Capsim. Keeping a sounds relationship with suppliers is important. If my team extended the AP setting, the company would have more cash on hand for other items, thus inflating the cash flow, but the consequence of jeopardizing a supplier relationship and being short on parts was not worth the …show more content…
Having the opportunity to run a multimillion-dollar organization without real word consequences enable the team to take risks and try strategies. I am confident the decisions to overproduce in round four and overlooking cuts in material costs would have been recognized with a more collaborative team. Nonetheless, I am thankful to have the opportunity to run the RnD, Marketing, Production, and Financial departments. My understanding of the interrelated departmental effects enhances the importance of a transparent vision and solid core values of an organization. I look forward to applying my new skills in a real world