Strategy Implementation - Simulation

MGT599 SLP Name Course Tutors Name Date Introduction This is the second simulation exercise for four products of the Clipboard Tablet Company. The first simulation did not make use of the principles of cost volume profit analysis. The products are in different phases of their product life cycle. X5 is well established having been in the market for three years at the beginning of the simulation. X6 is in the growth stage at the beginning of the simulation while X6 is introduced in the first year of the simulation. The first simulation (SLP 2) was heavily influenced by considerations of the elasticity of demand for the products over their life cycle and meeting customer preferences. This simulation has heavily relied on cost volume profit analysis to develop strategies of pricing and allocation of RD budget. The objective of the simulation exercise is to maximize the profit score over four years, for this reason consideration of long-term profitability is not emphasized. Understanding what costs are relevant to pricing decisions and the behavior of is very important in strategy development because it helps determine the impact of changing costs (Jackson Sawyers, 2002). Fixed costs are constant in total but vary per unit