Essay on Bay Back Simulation

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Decision Rationale Decision 1 In determining our initial strategy, we knew that we wanted to focus on the product that would be most profitable and key in on features that are important to the customer. Looking at product sales in 2008, the NiMH sold 28.0 M units and the Ultracapacitor sold only 4.3 M units. Based on these sales, the NiMH generated $280.3 M and the Ultracapacitor generated $86.2 M. In addition, when reviewing the Income Statement, the NiMH produced a profitable contribution in the years 2006 through 2008. The Ultracapacitor, on the otherhand, produced an unprofitable contribution during the same timeframe. Based on these figures, we decided to focus on the NiMH. We relied on the income statement to determine the …show more content…

In addition, due to the larger growth in sales for the Ultracapcitor, we increased our investment in process improvement to $3M. *Why did we leave the prices unchanged? Decision 4 In 2011 there was a sharp decline in sales by 36% when compared to sales in 2010. As a result , we adjusted our forecast to $22M in 2012. Because of the big decline in the NiMH sales, we decided to be conservative with our ultracapacitor forecast and used the 2011 sales results as our 2012 forecast. We kept the price of the Ultracapacitor at $18, but lowered the price of the NiMH to $9 due to market pressure and decline in sales. The R&D investments were the same as 2011. Decision 5 We continued to estimate a decline in NiMH sales, lowering our forecast to $21M which also mirrored the sales figure in 2012. However, we forecasted a sharp increase in Ultracapacitor sales with a 2013 sales estimate of $6.9M which is also the 2012 sales figure. (Break-through?) The price of the NiMH was lowered to $8.50 due to increasing market pressure, but we left the price of the Ultracapacitor the same. We kept our R&D investments in process improvement the same for both the NiMH and Ultracapacitor, but decreased our investment in NiMH energy density to $2M. The decision to decrease this investment was based on the decline in sales for this product. Decision 6 In 2014, we estimated a steep decline in NiMH sales, with a forecast of $14.9M

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