MGMT601 MBA Capstone
Week 3: Practice Rounds 1 & 2 Competition
Team Members
Robert Reigada
Davian Shepherd
Mohammed Aldabbas
Morrice Compton
Mardochee Michel-Robinson
Due Date: September 19th, 2021
Professor: Elliot Masocha
Week 3 rounds 1 & 2
Round 1
Round 2
2. Review the simulation report after each round has processed. What went well? What did not? What can you do to improve your company's position next round? Do this the same way Chief Executive Officers do reporting to their Board of Directors following the below guidance:
a) Profits: Listed on page 1 of the Capstone Courier. Losses are usually the result of insufficient margin caused by a high cost of structure and too low of prices. Profit can also suffer from excessive expenditures in selling and advertising, heavy interest payment on debt, and losses on liquidation, (scrapping) of inventory when retiring a product line.
Round 1 – In this round our company earned a star for profit because we generated $12,213,041 in profit.
Round 2 – We earned a star for profits due to our company generating $ 5,172,976 in profit.
Profits Summary – Although our company was able to generate healthy profits round 1, we did not generate as much in round 2 because we decided to pay down some of our debt. We must continue to monitor our customer expectations to ensure that we manufacture products within the age, price, performance, size and MTBF of their needs.
b) Contribution Margin (over 30% or not): Sales - (Direct Labor + Direct Materials + Inventory Carry) / Sales.
Round 1 – We received one star in this category because our corporate contribution margin was 37.8%, above the minimum of 30%.
Round 2 – We did not receive any stars this round because our corporate contribution margin was only 33.1%, slightly above the required minimum of 30%.
Contribution Margin Summary – As our company we noticed that in order to raise our Contribution Margin we had to raise the prices of our products in order to make improvements in this category to help improve the health of our company. We were able to cover our costs with our sales.
c) Inventory Management: The ideal year-end inventory position is one unit in each product line. In that case, you would know that every potential sale was made, and that inventory carrying cost was minimized.
Round 1 – We earned 1 star in this category because we were able to satisfy our year-end inventory position and met the 95% of the demand required to be generated across the entire product line.
Round 2 – We did not earn any stars in this category because we did not satisfy our year-end inventory position and did not meet the 95% of the demand required to be generated across the entire product line.
Inventory Management Summary – Our company will have to vigorously monitor our inventory and ensure that we maintain between 1% and 16% of our inventory at all times so we do not run out of products to sell.
d) Increase in Stock Price: Any positive increase in stock price. Stock price is affected by performance, asset base, debt, dividend policy, and number of shares.
Round 1 – Our company earned one star in this category because our company’s stock price rose last year by $ 18.53.
Round 2 – Our Company did not earn one star in this category because our company’s stock price fell last year by fell last year by $- 1.98.
Increase in Stock Price Summary – Our company stock price was able to increase in round 1 which showed that our company is financially healthy during the first year. Unfortunately, our stock price fell in round 2. We will continue to monitor this area to ensure that we do not allow the stock price to fall in subsequent years. Thankfully, we generated enough profit that we did not require an emergency loan due to assist our financial standing.