The Capsim simulation game can be challenging if you don’t approach it the right way. Here are some common Capsim FAQs MBA capstone students ask about the Capsim simulation game.
Common Capsim FAQs
- How to win Capsim?
- How to increase days of working capital in Capsim?
- What’s the best position on the perception map?
- How to reposition products in Capsim?
- What’s the importance of repositioning products in Capsim?
- How to invent products in Capsim?
- What effect age revision has on a product?
- How do products drift or age in Capsim?
- When should capacity be purchased in Capsim?
- What’s the best Capsim automation strategy?
- Do you have Capsim cheat sheet to download?
- How to increase leverage in Capsim?
- How do you calculate Capsim sales forecast?
- Do you have to create a Capsim SWOT analysis?
- How to pay Bonds due in Capsim?
- What are Capsim emergency loans?
- How to avoid Capsim emergency loans?
Other Capsim Guides
Here Are The Answers To Capsim FAQs MBA Students Ask About Capsim Simulation Game
Q 1 How to win Capsim?
Make it rain in the earlier rounds by investing heavily in product invention, capacity, and automation, because it takes money to make money.
Q 2 How to increase days of working capital in Capsim?
The concept is to increase the number of current assets and/or to decrease the number of current liabilities.
Days of Working Capital = Working Capital / (Sales/365)
Working capital can be improved by:
- Being profitable
- Issuing stock for cash
- Replacing short-term debt with long-term debt
- Selling long-term assets for cash
- Settling short-term debts for less than the stated amounts
- Collecting more of the accounts receivables than was anticipated
- Reducing the balance required in the current asset account Allowance for Doubtful Accounts
Q 3 What’s the best position on the perception map?
Capsim Questions About Repositioning Products in Capsim
This section includes Capsim questions based on repositioning products in Capsim.
Q 4 How to reposition products in Capsim?
Changing a product size and or performance repositions a product on the perceptual map. In fact, improving a product performance’s and decreasing the size moves the product towards the lower right on the perceptual map.
Q 5 What’s the importance of repositioning products in Capsim?
Products in segments must be repositioned to keep up with the drifts by making them smaller and faster each year. Positioning affects material cost.
Therefore, the more advanced the position is, the more expensive the cost of materials will be. In addition, repositioning also cuts the product’s age in half.
Repositioning costs may include:
- Low-end position cost $1.00
- High-end position cost $10.00
- MTBF 1,000 houses add $0.30 to material cost
Improving positioning and reliability and reliability will make a product more appealing to customers, however, doing so increases material costs.
Q 6 What effect age revision has on a product?
Age revision is the age of a product after the product has been updated. This is one way you can manipulate the product cycle of your products in the game.
So if you want an older product to look newer, then reposition it. However, understand when a product is repositioned on the perceptual map during the year, its age will be cut in half.
If no repositioning is done, the product will age by one year.
Generally, you would allow products to age into whatever segment you want to dominate and keep the products in that segment by repositioning the product based on what the customers in that product segment want.
For example, if your strategy entails dominating the low-end segment, then you would just allow the products in the other segments to drift to the low-end segment.
Plus, you would invent products in the earlier rounds to replace these low-end products if your intention is to minimize Research and Development expenses.
Remember, once low-end products drift out of the dashed circle, customers will no longer buy them.
Thus, to keep on dominating that segment, you will require new low-end products. If you fail at supplying the demand you created, your competitors will be happy to take your market share.
Therefore, you could either reposition the product by revising the product or you can let that product drift out of the dashed circle then replace it with one of the products you invented in the earlier rounds.
However, for this to work you must invent products in the earlier rounds because it takes a while for new products to drift/age into the low-end segment. So plan accordingly.
Q 7 How do products drift or age in Capsim?
Q 8 How to invent products in Capsim?
The name of invented products must start with the first letter similar to the products already created by the game. For example, if you are on team Andrews and you decided to create three products they should be labeled Acted, Awag and Abat.
Q 9 When should capacity be purchased in Capsim?
The production department must purchase production capacity to build the new product one year in advance. Invention projects take at least one year to complete. For example, if one product was invented, then capacity would be ordered as follows:
Invent Product Acted
In Year 1: Schedule Acted for manufacturing and Purchase capacity for Acted
Year 2: Launch Acted
Q 10 What’s the best Capsim automation strategy?
- Traditional: 8-8.5
- Low-end: 10 towards the end of the game
- High-end: 6-7, and 6.5 for other product segments
Note, increase automation slowly because you need the Total Quality Management (TQM) module to become effective at the beginning of the fourth round.
Q 11 Do you have Capsim cheat sheet to download?
No cheat sheet available. However, questions are welcomed.
Q 12 How to increase leverage in Capsim?
You issue stock and bonds.
Q 13 How do you calculate Capsim sales forecast?
Last year’s sales units multiply by the segment growth rate for the upcoming year.
Therefore, if you run out of stock in the previous year, adjust the sales unit by adding the additional inventory you would have sold if you didn’t run out of stock.
Then multiply that figure by the new growth rate for the upcoming year for that product segment.
Capsim Sales Forecast Calculation Example
So for example, if in 2018 you sold 2,000 units in the high-end segment, but your stock out was 100 units, and the growth rate for the upcoming year is 5%.
Now assuming everything stays relatively the same as last year, then your sales forecast for the upcoming year 2019 would be:
- [(2,000 units+100 units) x 0.05] + [(2,000 units+100 units)]= $2,205 OR
- (2,000 units+100 units) x 1.05 = 2,205
Note, calculating the sales forecast is only the first step in predicting the sales forecast.
As always, things never stay the same, so there are other factors you need to consider, then adjust that number base on these factors.
How To Adjust Capsim Sales Forecast To Reflect The Impact Of External and Internal Factors
For instance, if are you currently dominating this segment and based on your competitor’s last year’s performance there is no way they will be able to retaliate then 2,205 might be too low.
This means that there is a possibility you might stock out.
In this situation consider the overall demand for that product segment, then adjusts the sales forecast accordingly.
Word of caution: don’t forecast sales units over the total demand in any product segment, even if you are dominating that segment.
However, if you’re not dominating that segment, you wouldn’t want to go up above your original calculated sales forecast. You also need to consider capacity, labor, and finance.
Do you have enough capacity, labor, and finance to produce these units?
In brief, always ensure you are also financially capable of producing products.
Overall, your sales forecast starts with a calculation.
However, this figure is later on adjusted based on your competitor’s past performance and whether you believe they can retaliate, plus your ability to produce these units.
Q 14 Do you have to create a Capsim SWOT analysis?
To keep you on track, create a SWOT analysis.
In addition, adjust the SWOT analysis at the end of each round to reflect your company’s current positions externally and internally.
Q 15 How to pay Bonds due in Capsim?
All bonds due at the end of the year are automatically converted into current debt.
This debt is paid on January 1st. However, ensure you have funds available to make the payment when it is due to avoid triggering an emergency loan.
Capsim Questions About Capsim Emergency Loans
This section includes Capsim questions based on Capsim emergency loans and how to avoid Capsim emergency loans.
Q 16 What are Capsim emergency loans?
Firstly, avoid emergency loans at all costs. In brief, the Capsim game gives you emergency loans when you manage cash poorly.
Therefore, Capsim emergency loans affect your stock prices even when your company is profitable, plus the interest rate is just ridiculous – it’s 7.5% plus whatever the current debt rate is.
In general, once again, avoid emergency loans.
Q 17 How to avoid Capsim emergency loans?
Ensure you have enough cash to cover short-term debts for the upcoming rounds before starting that round.
If you realize there is a chance of you running out of cash at the beginning of the next round, issue more stocks to raise funds.
In addition, try your best to meet your sales projections by forecasting properly then producing products customers want better than your competitors.
In general, excessive inventory and capacity and automation purchases without proper funding usually trigger Capsim emergency loans.
