Titan Response Paper
1. What is the basic goal of the Titan Simulation, or for that matter, the goal of production in general? The basic goal of production is efficiency. How efficient can a product be made, in terms of price per unit? In the case of our Holo-Generators, what is the most profit we can make, for as little production cost as possible? We had to see what we could do to make our price per unit the smallest possible, while getting the maximum return from the sale of it. In the case of my group, our first simulations average production cost was $7.80 and our second simulations average production cost was $7.36. We ended up decreasing our average price per unit by $0.54. Our efficiency increased as our understanding progressed. 2. Explain why the 80% range is optimal when producing in this Holo-Generator factory. Speak in terms of being above AND below this range and its consequences.
The 80% range is optimal for many reasons. If one is above the range, they are producing too much. When too much product is produced, it takes up inventory space, which in turn cost money to store inventory. Also, in real life, if too much inventory piles up, then it might hinder or halt production, (a similar situation is happening at SDI in Columbia City). If one is below the range, then production could be too slow. Slow production causes unfilled orders, which cost more than inventory does. A producer would also be forced to raise prices to compensate for lost revenue, which would force the Quantity Demanded down, which ultimately could lead to a failed business. 3. How is the concept of “market interdependence” exhibited in the Marketing decisions you made in the Titan Simulation? We ran 8 simulated companies. Each decision we made had repercussions on the other 7 companies. The company Justin Johnson, Alex Kohl, and I ran was, simply put, the price war starter. The price wars we started were originally our way...