SCMA 361 (CH5)

What is a product-by-value analysis, and what type of decisions does it help managers make?

A product-by-value analysis lists products in descending order of their individual dollar contribution to the firm, as well as the total annual dollar contribution of the product. It helps managers evaluate possible strategies for each product. The report may also tell management which product offerings should be eliminated and which fail to justify further investment in research and development or capital equipment. The product-by-value report focuses management's attention on the strategic direction for each product.

What percentage of sales from new products is indicative of industry leaders? A) 50% B) 7.5% C) 10 to 15% D) above 75% E) 20 to 25%

A) 50%

What is the use of information technology to control machinery? A) CAM B) CAD C) QFD D) DFMA E) STEP

A) CAM

What type of analysis focuses on the ways in which processes can be designed to optimize interaction between firms and their customers? A) PCN B) BOM C) OI D) DFMA E) PLM

A) PCN

A restaurant kitchen contains a wall poster that shows, for each sandwich on the menu, a sketch of the ingredients and how they are arranged to make the sandwich. This is an example of a(n): A) assembly drawing. B) route sheet. C) bill of material. D) work order. E) assembly chart.

A) assembly drawing.

An engineering drawing shows the: A) dimensions, tolerances, materials, and finishes of a component. B) dimensions, tolerances, cost, and sales or use volume of a component. C) materials, finishes, machining operations, and dimensions of a component. D) cost, materials, tolerances, and lead-time for a component. E) cost, dimensions, and machining operations for a component.

A) dimensions, tolerances, materials, and finishes of a component.

Group technology requires that: A) each component be identified by a coding scheme that specifies size, shape, and the type of processing. B) a specific series of engineering drawings be prepared. C) all bills of material be prepared using the same format. D) engineering change notices be linked to each of the bills of material and engineering notices. E) the final products be standardized.

A) each component be identified by a coding scheme that specifies size, shape, and the type of processing.

Which of the following would likely cause a change in market opportunities based upon levels of income and wealth? A) economic change B) sociological and demographic change C) technological change D) political change E) legal change

A) economic change

(T/F)Which of the following is NOT a service design technique used to increase service efficiency? A) increase customer interaction B) delay customization C) automation D) modularization E) limit the options

A) increase customer interaction

In which stage of the product life cycle should product strategy focus on process modifications as the product is being "fine-tuned" for the market? A) introduction B) growth C) maturity D) decline E) incubation

A) introduction

3-D printing has proven to be particularly advantageous for: A) prototype development and custom products. B) modular design. C) quality function deployment. D) robust design. E) computer-aided design.

A) prototype development and custom products.

The three major elements of the product decision are: A) selection, definition, and design. B) goods, services, and hybrids. C) strategy, tactics, and operations. D) cost, differentiation, and speed of response. E) legislative, judicial, and executive.

A) selection, definition, and design.

An assembly chart: A) shows graphically how the product is assembled. B) shows an exploded view of the product. C) lists the operations, including assembly and inspection, necessary to produce the component with the material specified in the bill of material. D) provides detailed instructions on how to perform a given task. E) describes the dimensions and finish of each component.

A) shows graphically how the product is assembled.

A result of concurrent engineering in product design is: A) speedier product development. B) lower quality. C) less customer demand. D) higher costs. E) all of the above.

A) speedier product development.

A document for production that gives the instruction to make a given quantity of a particular item, usually to a given schedule, is a(n): A) work order. B) route sheet. C) bill of information. D) assembly chart. E) value analysis.

A) work order.

Provide some examples of recent product changes, i.e. new products that are replacing older ones.

Answers will vary. The list in the text includes: TV to HDTV, radio to satellite radio, coffee shops to Starbucks lifestyle coffee, traveling circuses to Cirque du Soleil, land lines to cell phones, cell phone to iPhone, Walkman to iPod, and mops to Swiffers.

When should product strategy focus on forecasting capacity requirements? A) at the introduction stage of the product life cycle B) at the growth stage of the product life cycle C) at the maturity stage of the product life cycle D) at the decline stage of the product life cycle E) at the saturation stage of the product life cycle

B) at the growth stage of the product life cycle

The dimensions, tolerances, materials, and finishes of a component are typically shown on a(n): A) assembly chart. B) engineering drawing. C) bill of material. D) assembly drawing. E) route sheet.

B) engineering drawing.

What identifies components by a coding scheme that specifies size, shape, and the type of processing (such as size)? A) engineering drawing B) group technology C) bill of material D) assembly drawing E) assembly chart

B) group technology

An assembly drawing: A) shows, in schematic form, how the product is assembled. B) shows an exploded view of the product. C) lists the operations, including assembly and inspection, necessary to produce the component with the material specified in the bill of material. D) provides detailed instructions on how to perform a given task. E) describes the dimensions and finish of each component.

B) shows an exploded view of the product.

According to PCN analysis, which process region includes process steps in which one participant is acting on another participant's resources, such as their information, materials, or technologies? A) independent processing B) surrogate interaction C) direct interaction D) resource processing E) process domain interaction

B) surrogate interaction

A graphic technique for defining the relationship between customer desires and product (or service) is: A) product lifecycle management. B) the house of quality. C) the moment of truth. D) the assembly drawing. E) modular design.

B) the house of quality.

Identify the benefits associated with manufacturability and value engineering.

Benefits include immediate cost reduction, reduced product complexity, additional standardization of components, improvement of functional aspects of the product, improved job design and job safety, improved maintainability (serviceability) of the product, and robust design.

What technology "builds" products by laying down successive thin layers of plastic, metal, glass, or ceramics? A) CAM B) STEP C) 3-D printing D) replicator E) virtual reality

C) 3-D printing

Bridget's Hamburger Stand uses only 7 ingredients but offers 15 different burgers. This process is known as: A) Robust design. B) QFD. C) Modular design. D) CAD. E) Value analysis.

C) Modular design.

Which of the following is true regarding value engineering? A) Value engineering occurs only after the product is selected and designed. B) Value engineering creates fragile design. C) Value engineering is oriented toward improvement of design. D) Value engineering occurs during production when it is clear the product is a success. E) Value engineering can save substantial amounts of product cost, but quality suffers.

C) Value engineering is oriented toward improvement of design.

Which of the following typically shows the hierarchy of components, their description, and the quantity of each required to make one unit of a product? A) an engineering drawing B) an assembly drawing C) a bill of material D) an assembly chart E) a route sheet

C) a bill of material

The hierarchy of components, their description, and the quantity of each required to make one unit of a product are documented on: A) a group technology listing. B) a route sheet. C) a bill of material. D) an engineering drawing. E) a work order.

C) a bill of material.

Which of the following documents lists the operations necessary to produce the component with the material specified in the bill of material? A) an engineering drawing B) an assembly drawing C) a route sheet D) an assembly chart E) an operations chart

C) a route sheet

Which of the following is an example of an external product development strategy? A) new internally developed products B) enhancements to existing products C) alliances D) migrations of existing products E) All of the above are examples of internal product development strategy.

C) alliances

Which of the following shows in schematic form how a product is assembled? A) an engineering drawing B) an assembly routing C) an assembly chart D) a route sheet E) a process sheet

C) an assembly chart

The role of decision trees in product design is to: A) rank products in descending order of their dollar contribution to the firm. B) better understand the customers' wants. C) calculate the expected value of each course of action. D) calculate the value of quality function deployment. E) calculate the value of the moment of truth.

C) calculate the expected value of each course of action.

Reducing the complexity of a product and improving a product's maintainability are activities of: A) product lifecycle management (PLM). B) product-by-value analysis. C) manufacturability and value engineering. D) organizing for product development. E) design for destruction (DFD).

C) manufacturability and value engineering.

Boeing's 737 airplane and Hewlett-Packard's printer business are examples of using enhancements and migrations of existing products to build on a ________. A) product template B) product pulpit C) product platform D) product dais E) product foundation

C) product platform

A process sheet is a type of: A) assembly drawing. B) assembly chart. C) route sheet. D) work order. E) bill of material.

C) route sheet.

Regal Marine: A) no longer builds boats with any wooden parts. B) has replaced all human labor with robots. C) treats the product design decision as critical to its success. D) gets its competitive advantage by being the low-cost producer of boats designed by others. E) designs several new boats each year, but contracts other firms for their manufacture.

C) treats the product design decision as critical to its success.

Regal Marine's use of ________ has reduced product development time and reduced problems with tooling and production.

CAD or Computer-aided Design

How does configuration management manifest itself when you ask for service on your automobile?

Configuration management is used by every automobile manufacturer to track all of the changes between and during a model year. To be specific about the part that is needed, the VIN (vehicle identification number) is often used.

Which of the following is TRUE regarding computer-aided design? A) It is too expensive to use in most manufacturing and design settings. B) It is an obsolete technology. C) It results in longer development cycles for virtually all products. D) It is the use of computers to interactively design products and prepare engineering documentation. E) It is the use of information technology to control machinery.

D) It is the use of computers to interactively design products and prepare engineering documentation.

________ is used to rank a company's products to determine which products represent the best use of the firm's resources, or, perhaps, to determine which products are to be eliminated. A) Value analysis B) Value engineering C) Financial analysis D) Product-by-value analysis E) Product cost justification

D) Product-by-value analysis

The Japanese method of organizing for product design features: A) teams. B) product managers (champions). C) distinct departments with assigned tasks. D) a single organization without subdivision or individual teams. E) none of the above.

D) a single organization without subdivision or individual teams.

Payoffs, alternatives, and expected monetary values are terms associated with: A) virtual reality. B) product life-cycle management. C) quality function deployment. D) decision trees. E) make-or-buy analysis.

D) decision trees.

Value analysis takes place: A) when the product is selected and designed. B) during the initial stages of production when something needs to be done to assure product success. C) when the product is first conceived. D) during the production process when it is clear that the new product is a success. E) when the product cost is very low.

D) during the production process when it is clear that the new product is a success.

A product's life cycle is divided into four stages, which are: A) introduction, growth, saturation, and maturity. B) introduction, growth, stability, and decline. C) introduction, maturity, saturation, and decline. D) introduction, growth, maturity, and decline. E) incubation, growth, maturity, and decline.

D) introduction, growth, maturity, and decline.

Which of the following product development strategies has the highest product development risk? A) acquiring the developer B) alliances C) joint ventures D) new internally developed products E) purchasing technology

D) new internally developed products

The analysis tool that lists products in descending order of their individual dollar contribution to the firm is: A) decision tree analysis. B) Pareto analysis. C) breakeven analysis. D) product-by-value analysis. E) product life cycle analysis.

D) product-by-value analysis.

At which stage of the product life cycle is product strategy likely to focus on improved cost control? A) introduction B) growth C) maturity D) saturation E) inflation

D) saturation

A route sheet provides a(n): A) exploded view of the product. B) instruction to make a given quantity of a particular item. C) schematic showing how the product is assembled. D) sequence of operations necessary to produce the component. E) set of detailed instructions about how to perform a task.

D) sequence of operations necessary to produce the component.

According to PCN analysis, service operations exist only within the area(s) of: A) independent processing. B) independent processing and surrogate interaction. C) independent processing and direct interaction. D) surrogate interaction and direct interaction. E) independent processing, surrogate interaction, and direct interaction.

D) surrogate interaction and direct interaction.

Identify and briefly describe the three process regions from PCN analysis.

Direct interactionincludes process steps that involve interaction between participants. Surrogate interactionincludes process steps in which one participant is acting on another participant's resources, such as their information, materials, or technologies. Independent processing includes steps in which the participant is acting on resources where it has maximum control.

Which of the following represents an opportunity for generating a new product? A) understanding the customer B) demographic change, such as decreasing family size C) changes in professional standards D) economic change, such as rising household incomes E) All of the above are such opportunities.

E) All of the above are such opportunities.

Which of the following is TRUE concerning advantages of CAD? A) It provides accurate information flows to other departments. B) Most product costs are determined at the design stage. C) Design options are easier to review before final commitments are made. D) Virtually all products have their development cycle shortened. E) All of the above are true.

E) All of the above are true.

Manufacturability and value engineering has which of the following benefits? I. Reduced complexity of the product II. Reduction of environmental impact III. Additional standardization of components IV. Robust design V. Improved job design and safety A) I, III, V B) II, IV C) I, III, IV D) IV E) I, II, III, IV, V

E) I, II, III, IV, V

Operations managers must be able to anticipate changes in which of the following? A) product mix B) product opportunities C) the products themselves D) product volume E) all of the above

E) all of the above

Quality function deployment (QFD): A) determines what will satisfy the customer. B) translates customer desires into the target design. C) is used early in the design process. D) is used to determine where to deploy quality efforts. E) all of the above

E) all of the above

3-D printing is an extension of: A) modular design. B) quality function deployment. C) robust design. D) concurrent engineering. E) computer-aided design.

E) computer-aided design.

(T/F)A work order is a list of the hierarchy of components, their description, and the quantity of each required to make one unit of the product.

FALSE

(T/F)According to PCN analysis, the consumer's process domain typically includes the set of activities at the beginning of the process chain.

FALSE

(T/F)An assembly chart shows an exploded view of the product, usually a three-dimensional or isometric drawing.

FALSE

(T/F)An assembly drawing lists the operations necessary to produce the component.

FALSE

(T/F)Computer-aided design (CAD) refers to the use of specialized computer programs to direct and control manufacturing equipment.

FALSE

(T/F)In the maturity stage of the product life cycle, operations managers will be particularly concerned with adding capacity or enhancing existing capacity to accommodate the increase in product demand.

FALSE

(T/F)Modular design exists only in tangible products; it makes no sense in services.

FALSE

(T/F)Regal Marine's attempts to keep in touch with customers and respond to the marketplace are made impossible because consumer tastes change and maritime engineering improves.

FALSE

(T/F)The enhancement of existing products is an external product development strategy.

FALSE

(T/F)The expected value of each course of action in a decision tree is determined by starting at the beginning of the tree (the left-hand side) and working toward the end of the tree (the right).

FALSE

(T/F)The four phases of the product life cycle are incubation, introduction, growth, and decline.

FALSE

Identify at least three general benefits derived from CAD.

Faster development, better products, and accurate flow of information to other departments.

The ________ is a part of the quality function deployment process that utilizes a planning matrix to relate customer "wants" to "how" the firm is going to meet those "wants."

House of quality

Identify the methods of service design that can increase service efficiency and limit customer interaction.

Limit the options, delay customization, modularization, automation, and focusing design on the moment of truth.

Discuss the advisability of using modular assemblies in manufacturing. (What are the advantages and disadvantages?) To what extent can these arguments be applied to service products?

Modules are easily segmented components. They add flexibility to production and marketing. They allow mix-and-match of components (customization at point of customer contact). Use of modules usually means fewer parts, less design and tooling expense. Disadvantages include using a module in a product for which a more specific component would have been better. It also may be possible that a module is more expensive than a product-specific version would be because it has to function properly for multiple products. Modules do exist in services, as in fast-food meals built to customer specification.

Briefly explain how product life-cycle management (PLM) impacts product design.

PLM is an umbrella of software programs that attempts to bring together many phases of product design and manufacture. PLM products often start with product design (CAD/CAM); move on to design for manufacture and assembly (DFMA); and then into product routing, materials, layout, assembly, maintenance and even environmental issues.

________ lists products in descending order of the individual dollar contribution to the firm.

Product-by-value analysis

What is quality function deployment (QFD)?

QFD refers to both (1) determining what will satisfy the customer and (2) translating those customer desires into the target design.

________ is a process for determining customer requirements and translating them into attributes that each functional area can understand and act upon.

Quality function deployment or QFD

________ provides a format allowing the electronic transmittal of three-dimensional data.

Standard for the exchange of product data or STEP

(T/F) According to PCN analysis, firms intending to provide a value offering that focuses on customization should be positioned more toward the consumer's process domain.

TRUE

(T/F)3M's goal is to produce 30% of its profit from products introduced in the last 4 years.

TRUE

(T/F)Group technology enables the grouping of parts into families based on similar processing requirements.

TRUE

(T/F)Product strategy may focus on developing a competitive advantage via differentiation, low cost, rapid response, or a combination of these.

TRUE

(T/F)Quality function deployment refers to both (1) determining what will satisfy the customer and (2) translating those customer desires into a target design.

TRUE

(T/F)Rapidly developing products and moving them to the market is part of time-based competition.

TRUE

(T/F)Relatively few new product ideas, perhaps only 1 in 250, become successfully marketed products.

TRUE

(T/F)Robust design ensures that small variations in production or assembly do not adversely affect the product.

TRUE

(T/F)The "make-or-buy" decision distinguishes between what an organization chooses to produce and what it chooses to purchase from suppliers.

TRUE

(T/F)The customer may participate in the design of, and in the delivery of, services.

TRUE

(T/F)The moment-of-truth is the crucial moment between the service provider and the customer that exemplifies, enhances, or detracts from the customer's expectations.

TRUE

(T/F)The objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage.

TRUE

Identify the external product development strategies; describe each in a sentence or two.

The external product development strategies include alliances, joint ventures, and purchase of technology or expertise by acquiring the developer. Alliances are cooperative agreements that allow firms to remain independent, but use complementing strengths to pursue strategies consistent with their individual missions. Joint ventures are combined ownership to pursue new products or markets. Purchasing technology or expertise is usually accomplished by acquiring entrepreneurial firms that have already developed the technology that fits the mission. The issue then becomes fitting the purchased organization, its technology, and its product line into the buying firm, rather than a product development issue.

"With respect to the product decision, managers must be able to accept risk and tolerate failure." Comment on why this is a necessary hazard in making new product decisions, given all the powerful tools and carefully built systems that support that decision.

The vast majority of new product ideas do not become marketable products, and most marketable products are failures. Perhaps hundreds of designs accompany each success.

Is it possible for a product's life cycle stage to affect its product strategy? In particular, describe how one product in growth and another in maturity might have different product strategies.

There is no reason for the strategy to be static through the life cycle stages. Organizations often treat new products differently than older ones, in terms of support for changes, aggressiveness in pursuit of market, etc. In particular, growth is associated with stabilization of design, and with ensuring that sufficient capacity exists. Maturity is a time for high-volume operations and cost control.

Aggressive new product development requires that organizations build structures internally that contain what features?

They should have open communication with customers, innovative product development cultures, aggressive R&D, strong leadership, formal incentives, and training.

What is time-based competition?

Time-based competition is competition that is based on time. It involves rapid development of products and moving them to market. Often, the first company into production may have its product adopted as the "standard."

What is the objective of the product decision?

To develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage.

Identify factors that influence new product opportunities.

Understanding the customer, economic change, sociological and demographic change, technological change, political/legal change, and other changes brought about through market practice, professional standards, suppliers, and distributors.

________ reviews successful products for improvement during the production process.

Value analysis

Explain the difference between value analysis and value engineering.

Value engineering is concerned with reducing cost and improving function in a preproductionsetting, while value analysis, with similar aims, takes place duringproduction, when the product has shown that it will succeed. Techniques are similar.

An exploded view of the product is a(n) ________.

assembly drawing

An exploded view of the product is a(n) ________. Answer: assembly drawing

assembly drawing

A listing of the hierarchy of components, their description, and the quantity of each required to make one unit of product is the ________.

bill of material

The use of information technology to control machinery is called ________.

computer-aided manufacturing or CAM

A drawing that shows the dimensions, tolerances, materials, and finishes of a component is a(n) ________.

engineering drawing

In analyzing product design decisions, decision trees determine the ________ of each course of action.

expected value or EMV

In the ________ phase of the product life cycle, the product design has begun to stabilize.

growth

Products or services designed in easily segmented components are known as ________ designs.

modular

The ________ is the crucial moment between the service provider and the customer that exemplifies, enhances, or detracts from the customer's expectations.

moment of truth

Within PCN analysis, a(n) ________ is a sequence of steps that accomplishes an identifiable purpose (of providing value to process participants).

process chain

Boeing's 737 airplane and Hewlett-Packard's printer business are examples of using enhancements and migrations of existing products to build on a(n) ________.

product platform

If a design can be produced to requirements even when the production process has unfavorable conditions, the design is said to be ________.

robust

Rapidly developing products and moving them to the market is referred to as ________.

time-based competition

Identify the 7 steps involved in building the house of quality.

(1) Identify customer wants. (2) Identify how the good/service will satisfy customer wants. (3) Relate customer wants to product hows. (4) Identify relationships between the firm's hows. (5) Develop importance ratings. (6) Evaluate competing products. (7) Determine the desirable technical attributes, your performance, and the competitor's performance against these attributes.

(T/F)Apple generates almost 60% of its revenue from products launched in the past 4 years.

TRUE