Control Systems Feedback Loops

Module 5– SLP
CASE: SYSTEM FEEDBACK LOOPS, SLP: TIME NORMAL
Sandra Emery
BUS599
Dr. Gary Hascall
June 16, 2015
Introduction
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.
Discussion
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%66,351,43444,440PricesallocationRevenueProfit2015X527515%165,140,938-3,535,937X643035%496,822,502133,187,181X719050%95,823,54718,585,152
Time Warp 3YearPricesallocationRevenueProfit2012X526033%629,824,739183,544,313X643034%554,269,513154,134,825X719033%31,461,253-23,065,952PricesallocationRevenueProfit2013X526537%822,553,383273,077,129X642033%962,037,169286,711,880X719030%45,068,365-12,677,740PricesallocationRevenueProfit2014X529030%188,533,7158,816,276X643030%988,145,588311,492,014X718040%68,038,571149,008PricesallocationRevenueProfit2015X529020%158,381,556-3,339,938X643030%436,748,399112,732,562X718050%102,702,81021,821,396
Comparing the results of the various strategies gives a clearer picture of the performance of different prices and R & D allocations. The performance of X5 reported losses in Time Warp 2 in both 2014 and 2015, but reported losses only in 2015 in Time Warp 3. The price increase in X5 might seem counterproductive, but the price is still affordable to the customers, but there is a need to undertake more analysis to understand customer relations in light of the market maturation for the market of similar products. The need to stabilize the sales of the product is apparent, and the product has been fairly successful, but needs need to be done to ensure that it still successful. There is concern that X5 reduced the profitability of the company in 2014 and 2051, and the product can be discontinued. There are no more remaining customers for X5 by 2015, meaning that marketing promotion strategies are beneficial towards improving the outlook for this product.
The performance of X6 has improved before declining, since the shakeout phase is in 2014. In the shakeout stage there is high competition, with demand almost at the saturation level as there are few potential first-time buyers (Hill & Jones, 2012). However, marketing strategies and pricing decisions can influence the buyer’s decisions. It is expected that the loyal customers will still purchase the product, but then there are no more remaining customers. The case for utilizing the CVP analysis is that it is related to the pricing d...