Exam 5: Design of Goods and Services

A company is deciding if it should design a product in-house or outsource the design.If outsourced,the cost for a low bidder would be $40,000,and the cost for an expensive bidder would be $100,000.To design in-house would require overtime for an already stretched design team with total costs of $70,000.If all three designs (in-house,low bid,high bid)are equal in quality and the likelihood of finding a low bidder is 60% (meaning that 40% of the time the firm will have to hire the expensive bidder),should the company outsource design or do it in-house?

A company manufactures specialty pollution-sensing devices for the offshore oil industry.One particular device has reached maturity,and the company is considering whether to replace it with a newer model.Technologies have not changed dramatically,so the new device would have similar functionality to the existing one,but would be smaller and lighter in weight.The firm's three choices are: (1)keep the old model, (2)design a replacement device with internal resources, (3)and purchase a new design from a firm that is one of its suppliers.The market for these devices will be either "receptive" or "neutral" of the replacement model.The financial estimates are as follows: Keeping the old design will yield a profit of $6 million dollars.Designing the replacement internally will yield $10 million if the market is "receptive," but a $3 million loss if the market is "neutral." Acquiring the new design from the supplier will profit $4 million under "receptive," $1 million under "neutral." The company feels that the market has a 70 percent chance of being "receptive" and a 30 percent chance of being "neutral." Draw the appropriate decision tree.Calculate expected value for all courses of action.What action yields the highest expected value?

The four phases of the product life cycle are incubation,introduction,growth,and decline.

________ reviews successful products for improvement during the production process.

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

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?

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

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):

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

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.

According to PCN analysis,the consumer's process domain typically includes the set of activities at the beginning of the process chain.

Which of the following would likely cause a change in market opportunities based upon levels of income and wealth?

What is time-based competition?

A product's life cycle is divided into four stages,which are:

The Japanese method of organizing for product design features:

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?

Which of the following product development strategies has the highest product development risk?

Which of the following documents lists the operations necessary to produce the component with the material specified in the bill of material?

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.

A swim club is designing a new pool to replace its old pool.The new pool would need to last for 10 years since the club is planning on relocating after 10 years.A concrete shell would cost $100,000 and last for all 10 years.Another option is to install a vinyl liner that would cost only $75,000 to install.However,the vinyl is not guaranteed to last for all 10 years,and it has a 33% chance of breaking down.Repair of the vinyl would cost $40,000 and would extend the life of the vinyl liner to the 10-year mark.If both options are acceptable to the swim club,which one minimizes their cost?