Complete the following TWO Tasks! Please complete following two tasks. Both tasks are seperate. Create separate answer files and provide answers accordingly. IMPORTANT NOTE: Task 1 deadline: 06-27-202

Team Digby Business Report

Introduction

We all started Capsim not really knowing what to expect from the class what so ever. Little did we know that we would end up creating, and successfully running a multimillion-dollar company.

Team Digby Capsim Round 1

R&D

In research and development for round one, we already had one product predetermined for our business. The first product, Dixie started with a performance of 8.0, a size of 12.0, and a MTBF of 25000. For Dot, we started with a performance of 9.0, a size of 16.2, and a MTBF of 26000. Daze is a leading edge low-tech product that is also a middle of the line high-tech product that fits into the fine cut of both low and high-tech markets. Next, we began R&D on Dune. We did not make drastic changes as initial numbers were not that far from customer expectations. We decided to start the performance with 3.4, size 11.2 and MTBF of 20500. Based on the round one outcomes I believe that we made the right decisions for R&D.

Marketing

In the marketing of Daze, we set the price at $28.49 hoping to have the cheapest low-tech product to win the most market share. Next, we set the promo budget to $1800 and sales budget at $2,000 to raise our awareness and accessibility. At the beginning of the round, our awareness was at 55% and our accessibility was at 40%, and at the end of the round the awareness is 84% and the accessibility is 52%. For round one we set our forecast at 1,700 to be conservative. For Dune, we kept the price at $34.00, promo budget at $1000 and sales budget at $1200. As the benchmark predication was only 692, we decided to keep our forecast on a lower range which was 380. I feel like our sales budget and promo budget were also set correctly because we could not have spent that much more money for the first round. Dixie was our highest prices item at $39.00. The promo budget for Dixie we kept the promo budget at $1500 and sales budget at $1700. Similar to Dune, due to low benchmark prediction, we kept out forecast at 475 only. The overall result turned out to be good. However, analysis suggested we should increase promo budgets in further rounds to sell more units.

Production

In production, for Daze we set a production schedule of 1,600, which was less than our forecast, but we had 189 products on hand and we also added a few because of the production after adjustment number. We did not buy any capacity for Daze as it seems like it was not required for this round. However, we did increase automation to 6. For Dell we set a production schedule of 1950, which was less than our forecast, but we had 39 products on hand and we also added a few because of the production after adjustment number. We also increased the automation to 7 highest In compare to all the other product’s automation score. We did not change the A/P lag days. Our max investment was $32,718 and we spent $31,600. I think that we made good decisions in production. However, for further round, we need to be careful under HR section as higher automation tends to work against the employees of the company.

Finance

In the finance section, as this was our very first round, we did not issue any stocks neither we did not retire any stock. The current price per share of our stock is $34.31. To finance improvements, we borrowed $18994 in long-term debt and nothing in current debt. We changed the A/R lag days to 29 in the first round to help sell products and gain market share. Our cash position at the start of the round was $3460 and at the end of the round, it is projected at $6358.

Conclusion

As a group, we felt good about this round based on our decisions and the outcome was decent as well. Our profit was $- 2,385,806 with $ 1,829,264 as the cumulative profit. However, we were give $ 7,345,003 as an emergency loan, and inventory. As far as future decisions go we do not think that we are very far off from competing with the other companies, we just need to fine tune a few of our numbers.