How To Increase Days Of Working Capital In Capsim
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Struggling with formulating your own Capsim Strategy? Well, here are a few Capsim tips for each Capsim module.
6 Capsim Modules
- Capsim Research and Development Module
- Capsim Marketing Module
- Capsim Production Module
- Capsim Finance Module
- Capsim Human Resource Management Module aka HR Module
- Capsim Total Quality Management Module aka TQM Module
Capsim Tips For Each Capsim Module
Use these Capsim tips as a guide to help you formulate your own strategy. Good luck!
Capsim Tips For Capsim Research and Development Module
- Research and development decisions directly impact your marketing and production plans.
- Marketing and Research and Development decisions address product repositioning on the perceptual map, the number of products in each segment, age of products, and MTBF.
- Production and Research and Development decisions impact the cost of materials, purchase of new and automation levels. Note, the higher the automation level, the longer it takes to complete Research and Development projects.
- Your first product needs to be completed before another one can be started. So if a product is not completed in the first year, it goes into the second year and the other product cells will be locked.
- Project Management: 6-Month project cost $500,000, 1-Year project cost $1,000,000.
- Unsold units built prior to the revision date are reworked free of charge to match the new specs.
- Project completion time increases if the company puts two or more products in Research and Development at the same time.
Capsim Research and Development Recommendations
- Develop a strategy before you start developing any products. Are you going to maintain a presence in every single product segment or focus on low-end products only or focus on high-end only or dominate high-end but still maintain a presence in the other segments and so on. Once you determine what's your overall strategy, then you may start developing and reposition products based on that strategy.
Capsim Tips For Capsim Marketing Module
- Increase Customer Survey Score: Increase accounts receivables to 90 days to improve your customer survey score. Note, TQM also helps increase the customer survey scores, but it isn't available until later on in the game.
- Beware, a product with the highest customer survey score will outsell the competitor's product.
- Increase Awareness: In Capsim awareness is increased by spending the promotional budget which finances advertising and public relations campaigns expenses.
- Increase Accessibility: Accessibility is built over time by utilizing the product's sales budget. Capsim sales budget finances salespeople and the distribution systems serving customers.
- Pricing Products in Capsim:Don't price products $5 above or below the price range. Also remember, the price range decreases by $0.50 on the low and upper range every year.
- Achieving 100% accessibility is difficult. In order to achieve 100% accessibility for any product segment, you must have two or more products in that product segment. Once 100% accessibility is reached, you can use a combined sales budget of $3,500,000 to maintain 100% accessibility.
- Note, accessibility is concerned with the product segment and not the product, so once a product leaves a product segment then it no longer benefits. Also, unless the product segment still has two products, that segment will no longer benefit from the combined budget.
- Sales budgets are less effective when products are not positioned within the solid circle and when the product's price and MTBF are not following the product segment guideline.
- New products invented create a buzz, so 25% awareness is given for free. Therefore, inventing products is highly recommended.
Capsim Marketing Recommendations
- Use a promotional budget of $3,000,000 annually in the earlier rounds until product awareness is 100%. Then scale back to $1,400,000 annually to maintain 100%.
- Depending on your strategy, allow products to drift/age into other product segments to achieve 100% accessibility.
- Follow product pricing and MTBF guidelines for each product segment.
- Use no more than $4,500,000 sales budget for two products in a product segment and use no more than $3,000,000 sales budget for one product in a product segment.
Capsim Tips For Capsim Production Module
- The production module is where the action happens – products are scheduled for manufacturing.
- The production units for each product line need to be adjusted to your forecasted sales units.
Capsim Production Recommendations
- Allocating Capacity in Capsim: Always ensure there is enough capacity for each product for the next round before ending your current round.
- Capacity must be purchased for every product invented.
- Invest heavily in capacity and automation in the earlier rounds.
- Avoid selling capacity and automation because there's a loss involved.
Capsim Tips For Capsim Finance Module
- Short-term assets like accounts receivables and inventory are funded with current debt offered by banks.
- Investments in capacity and automation are funded by bonds and issuing stock.
Capsim Financial Recommendations
- Issue stock and long-term debt in the first three rounds to invest heavily in capacity and automation.
- Retire stocks once you have excess cash, low debt leverage, and excess working capital.
Capsim Tips For Capsim Human Resource Management Module
- Human resource management is one of the modules that's added later on during the game. For this module, ensure you negotiate when you are asked to. Most importantly, don't be cheap – ensure you try your best to please your workers to avoid strikes.
- Side note, if you invest in automation during the earlier rounds you reduce your dependence on manual labor, which allows you to save money on hiring workers, so plan accordingly.
- Managing recruiting and training is the top priority in this module. The minimum recruiting cost is $1,000 and the maximum $5,000. Never spend more than $5,000 on recruiting because there isn't any additional benefit. In fact, there are diminishing returns when $5000 is spent on recruiting. In terms of training, 80 hours is highly recommended.
- Spending top dollar on recruiting and training produces a higher productivity index and a lower turnover rate. This, in turn, reduces the need for more workers, thereby lowering labor costs per unit.
Capsim Human Resource Management Recommendations
- Hire employees at $5,000 and with 80 hours of training. However, this can be adjusted depending on your level of automation and sales units forecast for the upcoming year.
Capsim Tips For Capsim Total Quality Management Module
- TQM module helps reduce the cost of your business operations, shortens the length of time required to complete R&D projects, and increases demand for the products.
Capsim Total Quality Management Recommendations
- Invest $1,500 per category in the first and second round, then $1,000 in the third round of TQM.
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How To Increase Days Of Working Capital In Capsim
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