area33

8/10/2019 area33

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Quiz: Product Design – Process Selection

1. Product design and process selection directly affect

a. How the product is transported

b. How the product is storedc. Product cost***d. How accounts receivable is handlede. How orders are entered

2. Studying the practices of companies considered “best in class” and comparing theperformance of our company against their performance is

a. ompetitionb. opyingc. !rustrationd. "enchmar#ing***e. $otching

%. "enchmar#ing can result in the company

a. &nowing where it ran#sb. 'mproving its own processes***c. 'gnoring its strong pointsd. (eciding to switch industriese. )edefining its mission

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. 'n the product life cycle+ products in the stage are notwell defined and neither is their mar#et.

a. (evelopmentb. 'ntroductory***c. ,rowth

d. -aturitye. (ecline

. 'n the stage of the product life cycle+ the product ta#eshold and both the product and the mar#et continue to be refined.

a. (evelopmentb. 'ntroductoryc. ,rowth***d. -aturitye. (ecline

/. 'n the stage of the product life cycle+ demand for theproduct levels off and there are usually no design changes.

a. (evelopmentb. 'ntroductory

c. ,rowthd. -aturity***e. (ecline

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0. 'n the product life cycle+ finally there is an in demand+because of new technology+ better product design+ or mar#et saturation.

a. (evelopmentb. 'ntroductoryc. ,rowth

d. -aturitye. (ecline***

3. 4he product life cycle can be 5uite short for certain products+ such as

a. 6 particular model of computer printer***b. 6 particular type of facial tissuec. 6 particular type of roofing nailsd. $o. 2 pencilse. 6 particular type of flour

7. 8hich of the following is a problem with the old approach to design+ which wascalled the “over the wall” approach9

a. 't is very productiveb. 't creates a team atmospherec. 't ta#es longer than when product and process design are done simultaneously***

d. :veryone wor#s together when problems with the product are discoverede. osts cannot be passed on to customers

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1;. 8hich type of operation is used to produce many different products with varyingprocess re5uirements in lower volumes9

a. 'ntermittent***b. )epetitivec. ontinuous

d. (ownstreame. ,ateway

11. 8hich of the following is characteristic of continuous operations9

a. Produce many different products with varying processing re5uirementsb. apital intensive***c. 8or#ers need to be able to perform different tas#s depending on the processing

needs of the productd. ,eneral purpose e5uipmente. <olume of goods produces directly tied to number of customer orders

12. !or continuous operations+ resources are organi=ed in a line flow to

a. Handle customer orders 5uic#lyb. -a#e it easier for management to supervise wor#ersc. :fficiently accommodate production of the product***

d. Simplify cost accountinge. onserve floor space

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1%. 6 common difference between intermittent and continuous operations is

a. 8age ratesb. Si=e of the productsc. 'nfluence of unionsd. Source of raw materials

e. (egree of product standardi=ation***

1. 4he classes that you are ta#ing at the university use a process.

a. Pro>ectb. "atch***c. ?ined. ontinuouse. )ecycle

1. 8hat type of process is designed to produce a large volume of a standardi=edproduct for mass production+ such as automobiles9

a. Pro>ect processesb. "atch processesc. ?ine processes***d. ontinuous processes

e. )ecycle processes

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1/. 8hich type of process would be least li#ely to produce goods for inventory ratherthan for a specific customer re5uest9

a. Pro>ect***b. "atchc. ?ine

d. ontinuouse. )emanufacturing

10. 8hat type of operations focus on products in the early stage of the life cycle9

a. ontinuousb. (ownstreamc. ,atewayd. 'ntermittent***e. )ecycle

13. @nce a manufacturing company has an intermittent operation in place+ it is a poorstrategic decision to pursue production of a product in the samefacility.

a. Highly standardi=ed***b. onsumerAoriented

c. :lectronicd. Heavy dutye. ustomi=ed

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17. 4he decision of how a manufacturing company will compete in the mar#etplace+ inother words its + is largely affected by the type of operationit has in place.

a. -issionb. (istribution strategy

c. orporate organi=ationd. @perational focuse. ompetitive priorities***

2;. 8ith respect to competitive priorities+ intermittent operations compete more oncompared to continuous operations.

a. ost and featuresb. (urability and costc. 6vailability and reliabilityd. !leBibility and delivery***e. (urability and features

21. 'ntermittent operations group their resources based on

a. )e5uirements of the productb. Similar operations or functions***

c. Shape of the shop floord. 6bilities of the labor forcee. 4he number of machines

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22. ompared to intermittent operations+ continuous operations

a. Have higher material handling costsb. Have greater efficiency***c. Have slower processing ratesd. Have more fleBibility

e. 6re less speciali=ed

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Homework: Product Design – Process Selection

1. 8hat does the productAprocess matriB tell us9

Products and processes are closely interrelated and both go through lifeAcycle stages. 4he stage inthe lifecycle of the product will determine the process.

2. How does the production volume affect brea#Aeven analysis9

6 brea#Aeven analysis ta#es into account the production volume and the relevant cost of producing thevolume by the available alternative processes. 't calculates the relative profit or loss of thealternative processes+ thus helping to decide which alternative to choose for a certain volume ofproduction.

%. 6 boo# publisher has fiBed costs of C%;;+;;; and variable costs per boo# of C3.;;.4he boo# sells for C2%.;; per copy.

a. How many boo#s must be sold to brea# even9

! D P A < * "rea#Aeven where ! D fiBed cost+ P D price+ and < D variable cost

C%;;+;;; D C2%.;; A C3.;; * "rea#Aeven

"rea#Aeven D 2;+;;; boo#s

b. 'f the fiBed cost increased+ would the new brea#Aeven point be higher or lower9

8hy9

Higher E Higher numerator+ fiBed contribution margin PA<

c. 'f the variable cost per unit decreased+ would the new brea#Aeven point be higheror lower9 8hy9

?ower E Higher contribution margin+ fiBed numerator

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Exercise: Product Design – Process Selection Biddy’s Bakery

"iddyFs "a#ery was founded by :li=abeth -c(oogle in 173. $ic#named “"iddy+” :li=abeth started thehomeAstyle ba#ery in incinnati+ @hio as an alternative to commercially available ba#ed goods. 4he missionof "iddyFs "a#ery was to produce a variety of ba#ed goods with oldAfashioned style and taste. 4he goodsproduced included a variety of pies and ca#es+ and were sold to the general public and local restaurants.

4he operation was initially started as a hobby by :li=abeth and a group of her friends. -any of the

recipes they used had been passed down for generations in their families. 4he small production and salesfacility was housed in a miBed commercial and residential area on the first floor of “"iddyFs” home.:li=abeth “"iddy” and three of her friends wor#ed in the facility from / am to 2 pm ma#ing and sellingthe pies. 4he operation was arranged as a >ob shop with wor# stations set up to perform a variety oftas#s as needed. -any of the customers placed advanced orders and "iddyFs "a#ery too# pride inaccepting special re5uests. 4he "a#eryFs specialty was the -c(oogle Pie+ a rich chocolate confection in acoo#ie crust.

Meeting a!acity "eeds'nitially sales were slow and there were periods when the business operated at a loss. However+ after

a few years "iddyFs "a#ery began to attract a loyal customer following. Sales continued to grow slowly

but steadily. 'n 177+ a first floor storage area was eBpanded to accommodate the growing business.However+ "iddyFs "a#ery 5uic#ly outgrew its current capacity. 'n -ay of 2;;; :li=abeth decided topurchase the ad>acent building and move the entire operation into the much larger facility. 4he newfacility had considerably more capacity than needed+ but the eBpectation was that business wouldcontinue to grow. Gnfortunately+ by the end of 2;;; :li=abeth found that he sales eBpectations had notbeen met and she was paying for a facility with unused space.

#etting Management $d%ice:li=abeth #new that her operations methods+ though traditional+ were sound. 6 few years ago she had

called upon a team of business students from a local university for advice+ a part of their course pro>ect.4hey had offered some suggestions+ but were most impressed with the efficient manner in which she ran

her operation. )ecalling this eBperience she decided to contact the same university for another team ofbusiness students to help her with her predicament.

6fter considerable analysis the team of business students came up with their plan "iddyFs "a#eryshould primarily focus on production of the -c(oogle Pie in large volumes+ with ma>or sales to go to a localgrocery store. 4he team of business students discussed this option with a local grocery store chain thatwas pleased with the prospect. Gnder the agreement "iddyFs "a#ery would focus its production on the-c(oogle Pie+ which would be delivered in set 5uantities to one store location twice a wee#. 4he volumeof pies re5uired would use up all of the current eBcess capacity and ta#e away most of the capacity fromproduction of other pies.

:li=abeth was confused. 4he alternative being offered would solve her capacity problems+ but itseemed that the business would be completely different though she did not understand how or why. !orthe first time in managing her business she did not #now what to do.

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Exercise: Product Design – Process Selection Biddy’s Bakery

1. 8hat is the mission statement for "iddyFs "a#ery9

<ariety of ba#ed goods

@ldAfashioned style and taste

2. 8hat core competencies does "iddyFs "a#ery possess9

)ecipes from generations in their families :li=abeth and her group of friends

?oyal customer following

Special re5uests

%. 8hat is wrong with the proposal made by the team of business students9 8hy9

?arge volume of -c(oogle Pie going to local grocery store

-ismatch with current operations

. 8hat type of operation does "iddyFs "a#ery currently have in place9 8hat type ofoperation is needed to meet the proposal made by the team of business students9:Bplain the differences between these two operations in terms of product variety+type of e5uipment used+ and labor.

<ariety :5uipment ?abor

Iob Shop High ,eneral purpose S#illed

6ss. ?ine ?ow Special purpose ?ess

. 8hat would you advise :li=abeth9 8hy9

8hat business is :li=abeth in9

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