See description and attachment.

Cash Flow Statement

Financial Statistics

As we can see from the cash flow statement and Financial statistics, Digby did not perform well.

Starting with the cash flow statement, our net income for 2018 was a loss of $4,943 in comparison with 2017 where our net income was $4,189; the cash positions for 2018 was $0 and for 2017 was $3,434. The financial decisions made by me affected the company greatly, I made the decision to borrow money from long term debt for $7,000, I did issue common stocks for $1,000. Digby also received an emergency loan of $5,129,750.

Due to the decisions made, we can look at the financial statistics, our asset turnover resulted in -5.6%, our profits were a loss of $4,943,301 and the cumulative profits a loss as well of $754,793.

Operating activities also affected us greatly, the net cash from operations were $6,883 loss, we made plant improvements and that resulted in ($26,680); our net cash from financing activities were $30,130 but with all the loss of operating activities totaling $33,563 with ended up with negative $3,434 in cash disposition.

The reason I issue long term debt was to make sure with have cash disposition available to Digby, I issue $7,000 in long term debt.

I did not balance our debt portfolio correctly, I did not have a set strategy to manage the pro forma statements.

5

Daze R&D

Meeting customers demand by specifying products

Level of quality and reliability—mean time between failure (MTBF)

Mitigating perceived age of product to meet customer demand

In terms of products specification, I differentiated my products (Daze) by reducing price. Therefore in round 1, customers were trying to buy as set in the courier at $19.50 to $29.50, basically a .50 reduction on all spectrum of prices projected in round 0. I happen to control the traditional segment of our market in Digby focusing on Daze sensors research and development, finance and promotion and production level. I set the price of product to $29.50 closest to the highest price but not low enough to make customers think that my product is a substitute product on the market, but not high enough to keep customers honest and retainable. I also kept r&d (mtbf) at its max projected numbers and stay under the two years revision limit for product in the couriers of round 0 and round 1.

The level of quality and reliability which is also referred to as mean time between failure (MTBF) used was for both rounds set at 14000-19000, I set it at 19000 mtbf. Which is about 9% reliable. I noticed that for both round 0 and round 1 the reliability in importance was set at 9%. Mean time between failure calculates thenumber of time a condition is run divided by the amount of failure that happen in that period of time. Therefore, if we were to run a test 19,000 times the number of failure at 9% should be at least 1710 but if the products from Daze demanded was for instance was 7,387 which is proven in round 0 the number of failures at 9% should be 664.83 but in round 1 unit demanded at 8,067 should see a 9% failure of 726.03 for example.

Round 0 and round 1 had age of the product set at 2 years. I make certain that the Daze product was set at 1.7 which about a year and seven months. This means that I will not have carry over inventories once I set my price point right to meet customers satisfaction and keep my business in the positive in terms of earnings or profitability. Aging out a product might make it less desirable as customers might gravitate towards new products penetrating the marketplace which could lead managers to lower prices on products at a lost for the company.

6

Daze Marketing

Rationale behind price point in the marketplace.

Building customer awareness through promotion

Effectiveness of sales force

Sales forecast strategy

Rationale for your credit policies (accounts receivable and accounts payable)

In order to fully dominant the marketplace, a company must have in its strategy a short term and long term objectives and have a differentiating strategy with product life circle focus especially when the products they produce are similar and almost have the same price points. In so doing, decision like anticipating the probable steps another company might take given that you are all vulnerable to the same strengths, weaknesses, opportunities, threats and trend (SWOTT), you company have to know when to lower their prices and when to increase prices to amass wealth, not just in the short-run but in the long-run as well.

Customers are very sensitive to price in relations to what they think a product is worth. If you set price too low in order to gain more market share customers might buy a huge number of items give and take. But we also have to consider how the perceive the quality of the product as it correlates with price. Another thing that companies need to be watchful of is jump or huge bump in prices; this can throw customers off making them to opt out and find your nearest competitor. And keeping prices too high as the maximum price can make you not retain customers. Therefore, looking at all the possible situations, I decided to set prices in round 0 to $29.50, a $.50 drop in price and kept it consistent because customers like consistency in price which create loyalty.

Promotion for any company is highly important. This is how Boundless puts it (n.d.), direct marketing, be it f2f or b2b or b2c and public relations management is the promotional aspect of marketing a business. In round 0, I set the 1,000 because in business, if you increase direct material, you must increase the promotion for that direct material increase, if not how will the customers know for a new company just being split up from a huge monopoly. You can never go wrong when you create awareness of your products, it draws customers away from the competition. However, in round 1, I increase direct material to almost 16,000 but didn’t increase the promotional budget because I thought the customers should know my product by now. I saw a little increase in net margin. I should have increase the promotion budget for this newly added materials creating greater awareness to gain most of the market share. Being conservative is in terms is promotion is my regret right now.

I also set the same budget for sales in did in promotion. It should be higher next time. The reason is people thing sales is just selling products to a customer but is it more than that. Sales to me as about creating different integrated services or adding automation and highly trained employees to easily meet customers satisfaction. Sales is also networking with other with other team members internally through our group text to looking at the chart in CapSim and the courier to see what decisions they are making and offering helpful advise to amassing wealth for the company. We have to spend money to make money, that is the right principle for business that is why I have done the furthering: I noticed that the market share or potential market share in round zero for all companies competing was set at almost the same percentage but in round two, customers will look at our market share which is second in all categories comparing companies in round one, and they will also look at our prices not changing much as a condition to stay with us and draw more customers in the long-run. Daze sensor size is also set at 14.5 and 5 for performance to stay well within the projected numbers in the couriers of round 0 and round 1 (CapSim, n.d.). This is very effective because we are looking at the life circle of the product in the long-run, not just short-run successes other companies are looking at. Daze sales in round 1 was almost 39,000 but I need to costs down a little on direct material, labor and variable.

I forecast for the following or future year by looking at last year closing unit demanded divided by the 9.2% which was 7,387 divided by 9.2% the next year segment growth rate. I time that by 1.7 a little more than the 16.4 percent of the market share which give me 1155 as my future forecast for round 1.

My rationale or credit policy is that we are not borrowing money right now because we have a total liability that equates to total asset. The best way to mitigate this is to allow outstanding inventory on hand to be sold to offset the current liability. Plus, Daze also have an emergency loan of 14,053 that can be used to generate more awareness to buy the outstanding inventory on hand bringing in more money for the company in the future. Daza accounts received is about 9,782 set at about 8.2% in round 1 while its liability is 9,221, a 7.7% that brings a difference of 561 in earning.

7

Daze Production

Purchase machinery to automate your facilities

Buy or sell capacity

Establishing production schedule for each line

Managing company's fixed assets

Workforce complement

I really don’t thing is was necessary because when I looked at the labor, material, or total unit cost set at $20.56 per unit, I figure I was making $8.94 per unit. That’s a lot of money looking at how much production schedule of 2511 equates to more profit when products are sold. Automation in the system requires money and the depression expense could mean money coming from my pocket right now. Maybe in the future with more and more production schedule, I can choice to reduce my work labor and increase automation which can make the functioning capacity of work to speed up.

I also did not buy, nor did I sell any capacity of my product line. I am waiting for round two decision to do that especially selling capacity rather than buying because I really don’t want added inventory on hand to the current inventory I already have. I will also increase automation in round two after talking with my team members.

I think for managing the fixed asset of the company, I am doing well given that I am scheduling more production at less the cost of production looking at my team members. A compliment or workers of about 700 is a little too much. I think I have to reduce the workers at automation in the next decision making phase in round two. For production we are at full compliment which means that we have more than enough workers to do the job (CapSim, n.d.). Even though the total company net profit ended in a negative number in round 1 which is not good for the entire company, Daze net margin was about 6,298 in the positive. Overall, we all still failure because it is a group effort. Plus, we are all still new to the CapSim which is the weakness in our company for the moment but we will bounce back in future decisions.

8

Dell R&D

Performance was 2.5, not meeting customer needs

The survey only received an 8

MTBF 13000

A fair rate and has delivered a quality product

Age of the sensor 2.9 yrs.

Will need updating at under three years

The research and development department of a company design and create new products for the company to sell. When the company is creating a new product there are certain specification to consider first is performance how well is this product going to sell. How many sensors is Dell going to produce, What is the age of the sensors before they will need updating, and lastly How reliable is Dells product for this sensor the mean time before failure (MTBF) is 13,000 hours which is not bad for a sensor (Capstone team member guide 2014 ) R&D also want to start products at the beginning of each year which makes it easier to keep track of. Then they need to work out how much will the sensor cost to make.

To start with Dell is a low-end company so they make sensors that are less expensive than other companies. When I was inputting figures that is what I was thinking. But by selling the sensors at a lower price, Dell would have to sell twice as many than other companies in order to make the same profit. The price would have to increase to come close to the other companies in order to stay competitive.

9

Dell Marketing

Customer Awareness is 39%

Sales budget lowered to 400

Low sales forecasting resulted in inaccurate plan for expected sales of sensor.

Plan Moving Forward

Pay bills on time and focus on AP department

Balance sheet states accounts payable are $6,080 which is only 5%

Accounts receivable are $ 7,308.

Marketing is what companies use in order to sell the products they create. There is a variety of techniques that can be used to market products such as advertising, promotions, public relations and salesmanship (Capstone Team member Guide 2014). The main concern of this department is the price, place, and promotion (Capstone Team Member Guide 2014). In marketing the price of the product is one of the more important factors. If the company assign a price to a product that is too expensive Dell could lose loyal customers and not gain new ones because it could be overpriced, then if the price is less expensive Dell could gain interest from buyers but they may think that the sensor is poorly made. By doing research Dell needs stay competitive, so by researching the competition Dell needs to assign a price that is similar to other companies with out being to costly we want customers t purchase our product over there’s. Dell’s price of the sensors was $19.50 and the highest price was $33.00. Dell set the prices to low when actually we could have set or price at $28. 50 which is in between the other companies.

To make our sensors more promotable we need to make our product stand out more on the website and in the stores. We need to bring awareness to our customers. The first year is when a product has the highest awareness then the next year the awareness decreases.

Forecasting is another part of marketing that is important a company needs to figure out exactly how much of a product to produce. If a company produces too much they will have extra inventory that they will need to sell. A company cannot have a lot of inventory if it does not sell at required price the company will have to try and sell it at a lower price. On the other hand if a company produces less of a product and sells what is available the company will miss out on the opportunity to gain more profit. This is similar to pricing. In cap Sim Dell for cast was 989 and Benchmark prediction was 1470 I believe Dell forecasting was lower ands still has inventory to sell.

10

Dell Production

Dell had a $2800 investment

Used towards improvement of machinery due to old equipment

Buy and sell capacity 0

Will increase capacity on first shift. Then bring on a second shift.

Production department received sensor amount needed with available costs

Scheduled employees accordingly

Positive fixed assets.

Purchased new equipment that needed to be replaced.

More employees

Production is where the sensors are made for each product that the company makes there will have a separate assembly line either with one or two shift. Some companies will have extra pay for the second shift ( Capstone Team Member Guide 2014). Automation has allowed companies to produce more than by hand this has improved output for Dell. Dell also needed to replace some worn out equipment in order to increase production. In order to produce more products they will go from a one shift company to a two shift company.

The Production schedule is how well Dell managed the material, employees and the cost of producing the sensor, plus the total number of sensors that needed to be produced for the year. I believe that Dell fell short they used only the first shift to produce the new sensors they could have increased the inventory by adding in a second shift but keep the second shift to a minimum to avoid the 50% increase of wages. This would increase labor cost but that should have already been including in the initial planning. Dell also incurred a $2800 investment cost this was used to replace old equipment with automated tools.

11

Dixie R&D

Dixie lies on the high-performance end of the perceptual map

Market size 12.0

Mean time before failure (MBTF) 23000

Production schedule 410

Automation rating 3.0

contribution margin 34.4%

Plan to increase expenditure on the product