JA Titan Notes

1
JA Titan Notes
2
Balancing Supply and Demand

• Capital Investment Marketing
• Production Research Development

Supply
Demand
3
Price

• Low Price High Volume
• Walmart has low prices and much stock. They pay
  many workers and for much merchandise but make a
  profit. They have expanded into Superstores.
• Medium price Medium Volume
• Target has higher prices than Walmart but lower
  than department stores like Macys. They spend an
  average amount on workers and merchandise.
• High price Low Volume
• Mercedes Benz sets prices high. The amount of
  cars sold is lower than other models due to the
  price. The mark up is amazingly high and that is
  where profits are made.

4
Marketing

• To increase demand of your product you advertise.
  Advertising will increase your sales. Increased
  sales increased demand
• The questions are
• Who is the target market?
• How do I advertise to that market?
• How much do I spend on marketing to make a
  profit?

5

• Marketing Venues
• VIM Mass Mailing
• FleXiPaper Ads-2,000 minimum
• SkyBoard Ads- 4,000 minimum
• Hologen Ads- 6,000 minimum

6
Research Demand

• RD is used to improve your product. All the
  amenities in cars were done through RD (moon
  roof, MP3 hook ups, AWD, FWD, Antilock Brakes,
  Air Bags, Power windows, etc.)
• Spending in RD will improve the product and will
  increase sales eventually. RD will effect sales
  when applied consistently and over time. It is
  NOT a quick fix for demand.

7

• Types of R D
• Camera
• Fusion Power
• Z-Chip
• Smell-O-Vision
• Video Conferencing
• Gaming Module
• Salellite Antenna
• Wafer-thin Case
• Titanium Case
• Remote Control

8
Production

• How many will be produced? Is high, low or
  medium volume demanded?
• In JA Titan production is at its maximum
  efficiency at 80 of capacity.
• Capacity 1,490 units
• 1,490 x .80 1,192
• Operating below 80 capacity will cost you more
• Operating above 80 capacity will cost you more

9
Capital Investment

• Capital Investment is improving your business.
  In JA Titan it specifically means how large your
  company grows.
• Decisions to increase CI will not affect your
  production capacity for 2 quarters.
• Example in quarter 3 you increase CI. You will
  not see an increase in Production Capacity until
  quarter 5.

10

• Compare your CI to your pricing strategy. They
  are linked. How?
• If you have a low , high volume strategy your CI
  will need to increase.
• To keep up with demand, due to your low , you
  will need to expand your company.

11

• To grow CI should be higher than depreciation
• To stay the same CIDep
• To shrink CIltDep
• (hint To grow one unit add 40 to CI. If you
  want to grow by 100 units add 4,000)