Deck 6: Goods and Service Design

Question 1

In the context of service-encounter design, _____ simply means giving people authority to make decisions based on what they feel is right, to have control over their work, to take risks and learn from mistakes, and to promote change.

A) deployment
B) flexibility
C) empowerment
D) credence

Answer 1

C

Question 2

The final step in using the House of Quality involves identifying those technical features that meet any of the following criteria EXCEPT:

A) the strongest relationship to customer requirements.
B) the highest quality.
C) poor competitive performance.
D) strong selling points.

Answer 2

B

Question 3

Assume the specifications for a television remote control part (in inches) are 5.00 ± 0.10, and the Taguchi loss function is estimated to be L(x) = 5,500 (x - T)². Determine the estimated loss per part if the quality characteristic (i.e., actual process performance) under study takes on a value of 4.91 inches.

A) More than $30 but less than or equal to $50
B) More than $50 but less than or equal to $70
C) More than $70 but less than or equal to $90
D) More than $90

Answer 3

A

Question 4

In a design specification 25 ± 1.5, the value 25 is called the _____???, while ± 1.5 is called the _____.

A) nominal; reliability
B) average; tolerance
C) average; nominal
D) nominal; tolerance

Question 5

Which of the following steps is NOT the same for both goods and services?

A) Detailed goods, services, and process design
B) Customer benefit package design and configuration
C) Market introduction/deployment
D) Marketplace evaluation

Question 6

Assume the specifications for a part (in inches) are 5.00 ± 0.37, and the Taguchi loss function is estimated to be L(x) = 9,300 (x - T)². Determine the estimated loss if the quality characteristic under study takes on a value of 5.50 inches.

A) $4,650.00
B) $3,441.00
C) $9,300.00
D) $2,325.00

Question 7

A quality characteristic has a specification (in cm) of 0.40 ± 0.03. If the value of the quality characteristic exceeds 0.40 by the tolerance of 0.030 on either side, the product will require a $180.00 repair. What is the appropriate Taguchi loss function?

A) L(x) = 200,000 (0.43 − 0.37)²
B) L(x) = 2,000 (0.43 − 0.37)²
C) L(x) = 200 (0.43 − 0.37)²
D) L(x) = 200,000 (x − 0.40)²

Question 8

Prior to designing and configuring a customer benefit package, a firm should understand and develop its:

A) detailed goods, services, and process design.
B) process and service encounter design.
C) strategic mission and competitive priorities.
D) marketplace evaluation.

Question 9

In design specification terminology, permissible variation is called the:

A) nominal.
B) buffer.
C) tolerance.
D) leeway.

Question 10

A quality characteristic has a manufacturing specification (in cm) of 0.20 ± 0.05. Historical data indicate that if the quality characteristic takes on values larger than 0.25 cm or smaller than 0.15 cm, the product fails and a cost of $75 is incurred. Based on this data, answer the question below. The Taguchi loss function is _____.

A) L(x) = 75 (x - 0.05)²
B) L(x) = 30,000 (x - 0.20)²
C) L(x) = 30,000 (0.15 − 0.25)²
D) L(x) = 1,500 (0.15 − 0.25)²

Question 11

In the House of Quality, the interrelationship between any pair of technical features is found in the:

A) voice of the customer.
B) relationship matrix.
C) roof.
D) basement.

Question 12

A quality characteristic has a manufacturing specification (in cm) of 0.200 ± 0.05. Historical data indicate that if the quality characteristic takes on values larger than 0.25 cm or smaller than 0.15 cm, the product fails and a cost of $75 is incurred. Given the Taguchi loss function that was computed and actual process performance of this quality characteristic of 0.135, what is the economic loss per part?

A) More than $50 but less than or equal to $100
B) More than $100 but less than or equal to $200
C) More than $200 but less than or equal to $300
D) More than $300

Question 13

Which of the following is NOT one of the six customer attributes that impact the design and configuration of a customer benefit package?

A) Time
B) Information
C) Exchange
D) Reliability

Question 14

Taguchi's loss function is most closely associated with:

A) design failure-mode-and-effects analysis.
B) reliability calculation.
C) tolerance design.
D) prototype testing.

Question 15

The fundamental planning tool used to implement quality function deployment (QFD) is the:

A) voice of the customer.
B) technical requirement relationship matrix.
C) market and competitive evaluation rating matrix.
D) House of Quality.

Question 16

Building a House of Quality begins by identifying the:

A) competitive evaluation.
B) marketplace evaluation.
C) voice of the customer.
D) design of a customer benefit package.

Question 17

In design specification terminology, the target dimension is called the:

A) nominal.
B) exceptional.
C) bull's-eye.
D) tolerance.

Question 18

A critical part has a manufacturing specification (in cm) of 0.325 ± 0.010. Based on historic information, if this measurement is larger than 0.335 or smaller than 0.315 the product fails at a cost of $120. Determine the Taguchi loss function.

A) L(x) = 1,200,000 (0.325 − 0.315)²
B) L(x) = 1,200,000 (x − 0.325)²
C) L(x) = 1,200 (x − 0.325)²
D) L(x) = 1,200 (0.325 − 0.315)²

Question 19

The process by which a model (real or simulated) is constructed to test a product's performance under actual operating conditions is called:

A) quality function deployment.
B) value engineering.
C) detailed product design.
D) prototype testing.

Question 20

Which of the following is NOT supported by Japan's Genichi Taguchi?

A) Tolerance optimization
B) Goal-post model
C) Quadratic loss function
D) Monetary expression of variation

Question 21

A bank provides four sequential services to its customers. Over the last quarter, the reliability of each of these services was 92%, 97%, 95%, and 90%. What is their overall reliability?

A) 0.9700
B) 0.9350
C) 0.7630
D) 0.7400

Question 22

In a two-component parallel system, the overall reliability is 0.9994. If the reliability of the first component is 0.9890, determine the reliability of the second component.

A) Equal to or greater than 0.60 but less than 0.70
B) Equal to or greater than 0.70 but less than 0.80
C) Equal to or greater than 0.80 but less than 0.90
D) Greater than 0.90

Question 23

Which of the following is NOT a principal dimension of the servicescape?

A) Ambient condition
B) Process and job design
C) Spatial layout and functionality
D) Signs, symbols, and artifacts

Question 24

Which of the following is NOT an important element in the definition of reliability?

A) Probability
B) Time
C) Redundancy
D) Operating conditions

Question 25

A system design consisting of several parallel components that function independently of each other and where the system fails only if all the parallel components fail is an example of _____.

A) simplification
B) redundancy
C) deployment
D) sustainability

Question 26

To create and deliver a service, four steps are required and based on collecting information on errors per step, the following reliabilities have been determined: Step 1 = 0.92, Step 2 = 0.88, Step 3 = 0.94, and Step 4 = 0.84. The reliability of the total service system is:

A) less than 0.60.
B) equal to or greater than 0.60 but less than 0.70.
C) equal to or greater than 0.70 but less than 0.80.
D) equal to or greater than 0.80 but less than 0.90.

Question 27

If a redundant component is added to a system, the overall value of system reliability will:

A) increase.
B) decrease.
C) stay the same.
D) become unstable.

Question 28

The manufacture of a product requires five sequential steps. The reliability of each of the steps is 0.97, 0.88, 0.95, 0.92, and 0.99, respectively. What is the reliability of the manufacturing process (system)?

A) Less than 0.60
B) Equal to or greater than 0.60 but less than 0.70
C) Equal to or greater than 0.70 but less than 0.80
D) Equal to or greater than 0.80 but less than 0.90

Question 29

If the individual reliabilities are denoted by p₁, p₂, . . ., p_n, which of the following best represents the system reliability R_p of an n-component parallel system?

A) Rp = 1 - (1 + p₁) (1 + p₂) (1 + p₃) . . . (1 + p_n)
B) Rp = 1 - (1 - p₁) (1 - p₂) (1 - p₃) . . . (1 - p_n)
C) Rp = (p₁) (p₂) (p₃) . . . (p_n)
D) Rp = (p₁) + (p₂) + (p₃) + . . . (p_n)

Question 30

Given the diagram below that represents a cell phone circuit, determine the cell phone system reliability for this part of the total operating system if the individual component reliabilities are: A = 0.92, B = 0.90, C = 0.88, and D = 0.88.

A) More than 0.8000 but less than or equal to 0.8500
B) More than 0.8500 but less than or equal to 0.9000
C) More than 0.9000 but less than or equal to 0.9500
D) More than 0.9500

Question 31

Given the diagram below, determine the system reliability if the individual component reliabilities are: A = 0.96, B = 0.90, C = 0.98, and D = 0.94.

A) Equal to or greater than 0.92 but less than 0.94
B) Equal to or greater than 0.94 but less than 0.96
C) Equal to or greater than 0.96 but less than 0.98
D) Greater than 0.98

Question 32

Which of the following is NOT correct regarding product or process simplification?

A) Reduces flexibility
B) Reduces opportunity for error
C) Speeds up flow time
D) Improves reliability

Question 33

A new and improved fertilizer was produced in a fertilizer plant, which consisted of three stages A, B, and C. Compute the total system reliability (R_S), given the individual reliabilities: A = 0.97, B = 0.99, and C = 0.99.

A) Less than 0.70
B) More than 0.70 and less than 0.80
C) More than 0.80 and less than 0.90
D) More than 0.90

Question 34

Which of the following is NOT a concept or dimension of the servicescape?

A) Signs, symbols, and artifacts
B) Ambient conditions
C) Transaction processing
D) Spatial layout and functionality

Question 35

Which one of the following statements is TRUE of a servicescape?

A) Fresh flowers in a medical office are an example of ambient conditions for a servicescape.
B) Employee uniforms are not part of a servicescape.
C) An example of an elaborate servicescape is a Federal Express mail drop-off box.
D) An example of a lean servicescape is a hospital.

Question 36

A machine provides four sequential steps in processing a transaction. Over the last quarter, the reliability of each of these steps was 0.92, 0.98, 0.95, and 0.90. The total system reliability is:

A) less than 0.60.
B) equal to or greater than 0.60 but less than 0.70.
C) equal to or greater than 0.70 but less than 0.80.
D) equal to or greater than 0.80 but less than 0.90.

Question 37

_____ is the explicit consideration of environmental concerns during the design of goods, services, and processes and includes such practices as designing for recycling and disassembly.

A) Environmental analysis
B) Design failure-mode-and-effects analysis (DFMEA)
C) Quality Function Deployment (QFD)
D) Design for Environment (DfE)

Question 38

An ATM machine provides four sequential steps in processing a transaction. Over the last quarter, the reliability of each of these steps was 0.92, 0.97, 0.95, and 0.90. What is the overall reliability of the machine?

A) Less than 0.60
B) Equal to or greater than 0.60 but less than 0.70
C) Equal to or greater than 0.70 but less than 0.80
D) Equal to or greater than 0.80 but less than 0.90

Question 39

The system reliability for a three-component series system is 0.80. If the reliabilities of two of the components are 0.92 and 0.99, determine the reliability of the third component.

A) Less than 0.60
B) Equal to or greater than 0.60 but less than 0.70
C) Equal to or greater than 0.70 but less than 0.80
D) Equal to or greater than 0.80 but less than 0.90

Question 40

To improve system reliability, one option is to:

A) use better components.
B) use more components in series.
C) use quality function deployment.
D) eliminate redundancy.

Question 41

High-customer-contact systems would most commonly be found in:

A) distribution systems.
B) process designs.
C) front office operations.
D) back office operations.

Question 42

A servicescape includes all of the following principal dimensions EXCEPT _____.

A) ambient condition
B) tolerance design
C) spatial layout and functionality
D) signs, symbols, and artifacts

Question 43

The process by which a service is created and delivered is, in essence, the service itself.

Question 44

A(n) _____ is a promise to reward and compensate a customer if a service upset occurs during the service experience.

A) service guarantee
B) customer-contact requirement
C) service recovery
D) empowerment

Question 45

Identify an element that is NOT a principal dimension of a servicescape.

A) Spatial layout and functionality
B) Signs, symbols, and artifacts
C) Facility location
D) Ambient conditions

Question 46

A(n) _____ is included in service provider publications and advertisements.

A) artifact
B) service-encounter design
C) explicit service guarantee
D) service-upset clause

Question 47

In the context of the integrative case study of LensCrafters, which of the following statements is TRUE?

A) Each store has a visible low contact area.
B) LensCrafters' employees do not need service management skills.
C) Each store has a totally unique servicescape and layout that varies by location.
D) Low cost makes a long drive to LensCrafters worthwhile.

Question 48

Which of the following statements is TRUE of the LensCrafters case study?

A) LensCrafters's peripheral product is an eyewear.
B) Each store has very different layout and servicescape.
C) The fitting stations are in a high-contact area.
D) Low cost makes a long drive to a LensCrafters store worthwhile.

Question 49

The design of a manufactured good focuses primarily on its physical characteristics.

Question 50

The design of a service cannot be done independently from the "process" by which the service is delivered.

Question 51

Identify a TRUE statement about the integrative case study of LensCrafters.

A) LensCrafters primary product is physical goods (i.e., eyewear).
B) Each store has a unique servicescape and layout.
C) The manufacturing process is integrated into the service facility.
D) Low cost makes a long drive to LensCrafters worthwhile.

Question 52

Which of the following is an example of high-customer-contact systems?

A) Distribution systems
B) Construction services
C) Estate planning
D) Package sorting

Question 53

Which of the following is NOT an important factor in service-encounter design?

A) Facility location
B) Customer-contact behavior and skills
C) Service-provider selection, development, and empowerment
D) Service recovery and guarantees

Question 54

The decision of what goods and services to offer and how to position them in the marketplace is mainly an operational decision.

Question 55

Which of the following is NOT a principal issue in service-encounter design?

A) Process and job design
B) Customer-contact behavior and skills
C) Service-provider selection, development, and empowerment
D) Recognition and reward

Question 56

Service-encounter design includes all of the following principal elements EXCEPT _____.

A) technology and information support systems
B) customer-contact behavior and skills
C) service-provider selection, development, and empowerment
D) service recovery and guarantees

Question 57

The design of a customer benefit package (CBP) focuses on the operational choices that a firm must make in order to provide the CBP.

Question 58

Objectives of service guarantees include all of the following EXCEPT:

A) building brand image.
B) reducing customer risk.
C) forcing operational improvement.
D) allowing reduced pricing.

Question 59

In general, the designs of both goods and services follow a similar path. The critical differences lie in the detailed product and process design phases.

Question 60

Customer contact, for the purpose of classifying a system as being high-contact or low-contact, is measured by:

A) the percentage of a service provider's workday spent with customers.
B) the percentage of time a customer must be in the system relative to the total time it takes to provide a service.
C) the number of service encounters occurring in a given span of time.
D) the number of different service providers required to serve one customer.

Question 61

To find the reliability of a complex system, one must first convert the parallel components into equivalent series components.

Question 62

Quality function deployment (QFD) is focused primarily on developing a viable quality control plan.

Question 63

The goal-post model of conforming to specifications by specifying a nominal dimension and a tolerance is the basis for calculating the Taguchi loss function.

Question 64

Reliability does not apply to service processes.

Question 65

Japan's Genichi Taguchi argued that any variation within the specification limits is equally good in terms of quality and long-run cost.

Question 66

Suppose that a manufacturing specification of a dimension is 1.0 ± 0.05. The permissible range of variation from 0.95 to 1.05 is called the tolerance.

Question 67

A service-encounter design focuses on the interaction, directly and indirectly, between the service provider(s) and a customer.

Question 68

Reliability is formally expressed as a probability between 0 and 1.

Question 69

Prototype testing is an important step in the initial choice of a customer benefit package.

Question 70

The roof of the House of Quality shows the relationship matrix structure between the voice of the customer and the technical features.

Question 71

In the Taguchi loss function, as one deviates further from the target value, the loss increases in a linear fashion.

Question 72

One way of ensuring design for manufacturability (DFM) is through product simplification.

Question 73

A parallel system has no redundancy.

Question 74

The bottom of the House of Quality shows the interrelationships between any pair of technical features.

Question 75

While improving reliability by adding redundant components, the costs decrease.

Question 76

Design for manufacturability (DFM) includes practices such as designing for recycling and disassembly.

Question 77

In designing a service-delivery system, a good job and process design can usually overcome a poor location.

Question 78

The simpler the product design, the better the chance of high process efficiency.

Question 79

Customer requirements that are expressed in a customer's own words are called the "voice of the customer."

Question 80

Service design must be addressed from two perspectives-the service delivery system and the service encounter.