MEETING YOUR COURSE OBJECTIVES Part 1: Describe the functional areas of business

Post by Capsim
June 8, 2016

In this series, we will take a look at the most common learning objectives for intro and principles level business courses and demonstrate how CapsimCore™ can be effectively used to meet those objectives. Our newest simulation is designed to make business learning fun and engaging at any level.

Objective: Describe the functional areas of business

To run their company, students make decisions in four different areas of the business: R&D, Marketing, Production, and Finance. Students must create products that outsell their competitors by appealing to two customer segments: high tech and low tech


Students create, modify or retire products. Each product has three attributes students adjust using sliders:

  1. Performance
  2. Size
  3. Reliability

When creating and modifying products, students must consider each segment’s buying criteria (position, age, price and reliability).


Students ensure their products are well known and priced right: Students set each product’s:

  1. Price – students must again consider the buying criteria of the product’s customer segment
  2. Promo budget – determines customer awareness for each product
  3. Sales budget – determines the accessibility of each product
  4. Sales forecast – students estimate how many units they expect to sell

Developing an accurate forecast is important because students’ decisions in production and finance rely on the sales forecast.


Students control the production of their products and plant specifications. They adjust the:

  1. Production schedule – determines how many units of each product to make (based on the forecast made in the marketing department).
  2. Capacity level – the number of units their plant can produce running full time for a year. Students can schedule overtime of up to twice the capacity level for additional labor costs as well as purchase additional capacity for the following year.
  3. Automation level – investing in this will reduce labor cost


Decisions here ensure students have enough cash to run their business throughout the year. They can raise funds through three methods:

  1. Issuing stock
  2. Borrowing current debt – due the next year
  3. Issuing long term debt – due in 10 years

Students also have the ability to retire long term debt and retire stock. If their company ends the year with a negative cash position they will receive an emergency loan. The end of year cash position again relies on the sales forecast set in marketing.

CapsimCore proves an intuitive, easy-to-use interface for students to learn about the functional areas of business and how these decisions impact one another.

Try CapsimCore For Free

If you want to test drive the simulation for free, register for our CapsimCore Professor Challenge. You can even win:

  • A $5,000 scholarship donated to your school in your name
  • Free CapsimCore licenses for an entire class
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