BIKES SIMULATION Flashcards
Customer value/needs
Different according to market segment. Market research to find them. Hierarchy!
Features vs. benefits
Customers buy benefits (a need fulfilled)…not features
- > must translate features to benefits
Match up benefits and features
Market Opportunity Analysis -> allows us to understand customer wants
o Demand - what factors affect demand?
Demand curve o Demand forecasting (e.g., see Q3 and help file I6)
what factos affect demand?
- design of brand
- price
demand curve = demand lowers as price increases (y = Quantity demanded, x = Price)
Demand forecasting
estimate of demand = = > (estimate the number of units each sales person is likely to sell) * number of sales people employed for the quarter
- > demand should rise as you gain experience in the market and improve your brand designs, advertising and sales force management
marketpoteial
Demand forecasting
Market potential = counted number of potential custermoes in each geographic market, then considered how many units they wild buy.
Might need to increase fixed capacity to fulfill projected demand (need to take into account depreciation)
Pricing+ Price elasticity
- need to consider the price the market will bear. Segments have different price elasticityes. Lowest price in market will have largest market shares.
- rebates = popular for price elastic segment but negatively affects brand judgment if inelastic
Fixed capacity vs. operating capacity, and overtime (e.g., see Microsimulation 2, Q1, Q2, and help file J1/J4)
Operating capatiy = how much of the fixed capaity is used everyday - and therefore the number of units that are priduced each querter (should always be less or equal to fixed capacity).
Overtime - negatively affects labor costs
Lean manufacturing
produce only the quantity of goods that is demanded = no inventory. no forecasting brand demand, only total demand
Costs of production and economies of scale (e.g., see Microsimulation 3, Q2, Q3, and help file G5)
costs of production: supply cost, production overhead, labor cost, marketing cost
fixed costs (don’t change according to production
output = production overhead and marketing) and variable costs (supply and labor)
Balancing the accounting equation
(assets = liabilities + equity)
- error checker for accounting books
What is proforma accounting?
projected cash, revenues and profits - very important to end with a positive cash balance in the checking account
- see how your production operations affect your financials
Be familiar with the three financial statements in the simulation and the key components of each
- cash flow: projected cash flow
- income statement: income and expenses
- balance sheet: assets debt and equity
Balanced scorecard - understand what it is, why it’s used, what the key components are, and at a high level, how it is calculated
= most important measure of your total performance - compares to competitors
- shows total performance, financial performance, market performance, asset management
- key components: financial, customer, internal and learning + growth
