Control Systems Feedback Loops (Term Paper Sample)
The product life cycle is important to understand the changes in the sales potential of a product from initial product design when there is research and development to the growth, maturity and product decline (McDonald, 2007). The X5, X6 and X7 models all have the potential to improve the company’s profitability based on process and allocation of research and developments. Hence, the changes to be undertaken seek to show how performance would have been improved during Joe Schmoe’s era. The X5 has already been in the market for three years, but customers are not concerned about the product’s performance the X 6 model has been in the market for 2 years, with customers concerned more about performance rather than price. The X 7 model has been in the market for one year, but customers are concerned about the product’s performance as well as price. This paper reviews the X5, X6 and X7 products, their lifecycle, performance, it also delves in to the financial review market review as well as proposes an alternative strategy for which the company would have achieved better results from 2012-2015.source..
Module 5– SLP
CASE: SYSTEM FEEDBACK LOOPS, SLP: TIME NORMAL
Dr. Gary Hascall
June 16, 2015
Focusing more on the results of the simulation in Time warp 3 provides a better understanding of the application of the CVP analysis in the scenario. Clipboard Tablets needs to increase profitability, given the changing sales patterns of the three products. The results of Time Warp 3 further highlighted that there is a need to integrate the pricing decisions to improve sales growth, and avoid further decline in sales for X5 and X6. Additionally, X 7 might perform better, if the company is able to analyze the effect of the pricing decisions and forecast sales based on the prices. In any case, the strategies chosen depend on the mix of products, to boost overall profits rather than simply focusing on each product independently., the actual output might not be known, but CVP analysis facilitates forecasting, taking into account all the factors that are likely to affect the pricing decisions of the company. A comparison of the performance of the three products will be the main focus of the discussion based on the CVP analysis.
Making decisions while focusing on performance of the organization’s products captures the most important information that is used for planning in order to attain the desired results. Every organization has market drivers that influence performance, and the strategies need to be clear based on the internal conditions and the external environment (Hill & Jones, 2012). Companies operate as systems, where internal and external information influence organizational performance. Information on the customer base including the market saturation as well as changes in the sales volume indicates the market variables that help in the analysis. There are various analytical tools that organizations use to forecast trends and how different factors influence the performance of the three products. In particular, the CVP calculator helps to analyze the changes in sales volume taking into account the fixed, variable and R & D costs.
Analysis of performance- previous session and proposed strategy
Year ProductPrice ROSCumulative profits2012X526033% X643034% X719033%$396,184,323 2013X526537% X642033% X719030%$943,295,591 2014X529030% X643030% X718040%$1,263,752,890 2015X529020% X643030% X718050%$1,394,969,910
Proposed Strategy Year ProductPrice ROSCumulative profitsSales Revenue2012X526033% X643034% X718033%$397,141,285 $1,217,662,107 2013X526040% X642035% X718025%$945,394,705 $1,851,964,243 2014X529025% X643035% X718040%$1,263,018,091 $1,242,568,968 2015X529020% X643030% X716050%$1,406,230,812 $722,622,915 Comparative analysis
Time warp 2YearPricesallocationRevenueProfit2012X526033%629,824,739183,544,313X643034%554,269,513154,134,825X719033%31,461,253-23,065,952PricesallocationRevenueProfit2013X526035%839,759,200271,882,739X643535%893,370,564282,696,069X718030%48,124,594-11,280,143543,298,665PricesallocationRevenueProfit2014X529025%159,945,715-5,233,103X643035%1,034,748,396327,090,701X719040%66,351,43444,440PricesallocationRevenueProfit201...
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