FM6

MGMT601 MBA Capstone

Week 5: Rounds 5 & 6 Competition

Team Members

Robert Reigada

Davian Shepherd

Mohammed Aldabbas

Morrice Compton

Mardochee Michel-Robinson

Due Date: October 4th, 2021

Professor: Elliot Masocha

Week 5 rounds 5 & 6

Round 5

Round 6

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 5 – In this round our company earned a star for profit because we generated $ 15,500,745 in profit.

Round 6 – Our company earned a star for this category because we generated $ 7,578,358 in profit.

Profits Summary – Although our company was able to generate healthy profits in round 5, we did not generate as much in round 6 because we decided to invest into automation and capacity. We must continue to monitor our customer expectations to ensure that we manufacture products within the age, price, performance, size and MTBF of they expect their preferred products to be.

b) Contribution Margin (over 30% or not): Sales - (Direct Labor + Direct Materials + Inventory Carry) / Sales.

Round 5 – We received one star in this category because our corporate contribution margin was 32.7%, above the minimum of 30%.

Round 6 – We received one star in this category because our corporate contribution margin was 32.5%, above the minimum of 30%.

Contribution Margin Summary – As our company we noticed that in order to raise our Contribution Margin we had to raise prices of our several of our products and lower them in others 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 5 – We did not earn a star in this category because we were unable to satisfy our year-end inventory position and met the 95% of the demand required to be generated across the entire product line.

Round 6 – We did not earn a star in this category because we were unable to satisfy our year-end inventory position and met 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 5 – Our company did not earn a star in this category because our company’s stock price fell last year by - $1.22.

Round 6 – Our company did not earn a star in this category because our company’s stock price fell last year by - $10.69.

Increase in Stock Price Summary – Our company stock price decreased in rounds 1 and 2 which showed that our company is struggling a bit with its financial healthy during both years. 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.