Each company starts the simulation with five products. Your company has one product for each segment. You have one assembly line per product. Products can be terminated or added. Your company must have at least one product and cannot have more than eight. You and your fellow managers make business decisions on January 1 of each year. They are then executed by your employees. Industry results are published in The Capstone® Courier, which can be viewed from the website and from the Courier menu in Capstone.xls.

6.1 Research & Development

The Research & Development (R&D) Department invents new products and changes specifications for existing products. Changing size and/or performance repositions a product on the perceptual map (see Figure 2.1). Improving performance and shrinking size moves the product toward the lower right on the map.

Figure 6.1 Material Positioning Costs: Material Positioning costs vary depending on the product's relative location on the perceptual map. Products placed at the trailing edge of the Low End segment have a positioning component cost of $1.00; products placed at the leading edge of the High End segment have a positioning component cost of $10.00. Positioning component cost locations for a Traditional product ($5.50) and a Size Product ($7.30) are also illustrated.  

Tip: Improving positioning and reliability will make a product more appealing to customers but doing so increases material cost. See 8.4.1 Margin Potential.

All R&D projects begin on January 1. If a product does not have a project already underway, you can launch a new project for that product. However, if a project begun in a previous year has not finished by December 31 of last year, you will not be able to launch a new project for that product (the decision entry cells on the R&D spreadsheet in Capstone.xls will be locked).