FM6

MGMT601 MBA Capstone

Week 6: Rounds 7 & 8 Competition

Team Members

Robert Reigada

Davian Shepherd

Mohammed Aldabbas

Morrice Compton

Mardochee Michel-Robinson

Due Date: October 12th, 2021

Professor: Elliot Masocha

Round 7

Round 8

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 7 – In this round our company did not earn any stars because we had a loss of $- 570,748 in profit.

Round 8 – Our company earned a star for profit this round because we were able to generate $11,748,809 in profit.

Profits Summary – Although our company was experienced a financial loss in profits during round 7, we bounced back and generated round 8 because we decided to adjust our R & D to meet customer expectations. We did not invest any money in automation and TQM. 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 7 – Although we met the minimum CM, we did not receive a star in this category because our corporate contribution margin was 30%, at the minimum of 30%.

Round 8 – We received one star in this category because our corporate contribution margin was 31.5%, above the minimum of 30%.

Contribution Margin Summary – As our company we noticed that in order to raise our Contribution Margin we had to balance the prices of our products in order to maintain our CM 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 7 – 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 8 – Our company did not earn a star this round because we did not satisfy our year-end inventory position and meet the 95% of the demand required to be generated across the entire product line.

Inventory Management Summary – Our company was unable to accurately calculate our inventory to ensure that we maintained between 1% and 16% of our inventory at all times so we do not run out of products to sell. Unfortunately, we did not do well in this area.

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 7 – Our company did not earn a star in this category because our company’s stock price fell last year by -$13.18.

Round 8 – Our company earned one star in this category because our company’s stock price rose last year by $10.69.

Increase in Stock Price Summary – Our company stock price was decreased in round 7 which showed that our company was not financially healthy during the year. We were able rebound and increase our stock price in round 8. We did our best to monitor this area to ensure that we did not allow the stock price to fall in the final year. Thankfully, we generated enough profit that we did not require an emergency loan due to assist our financial standing.