Deck 3: Product Design and Development

Question 1

A product design resulting in a price more than customers might reasonably expect to pay is an example of?

A) Poor internal fit
B) Poor external fit
C) Poor internal and external fit
D) Neither poor internal nor poor external fit

Answer 1

B

Question 2

Product design involves making decisions about all of the following except?

A) Characteristics of goods and services
B) Pricing of goods and services
C) Features of goods and services
D) Performance of goods and services

Answer 2

B

Question 3

A product from which industry would likely be most affected by shortening product life cycles?

A) Furniture
B) Soda
C) Consumer electronics
D) Grocery goods

Answer 3

C

Question 4

Customers are ____________ to be involved in a service process than in a process related to goods.

A) Less likely
B) More likely
C) Neither less nor more likely
D) There is no way to assess this likelihood

Question 5

Internal fit, when concerning product design, involves?

A) Condition of the market
B) Desires of customers
C) Operational capabilities/policies of the firm
D) Pricing strategies

Question 6

Design of goods involves all of the following except?

A) Available of processing equipment
B) Availability of land
C) Availability of factory workers
D) Availability of marketing personnel

Question 7

A unique expertise or skill set that cannot be easily reproduced or imitated by other companies is referred to as a ___________.

A) Core credo
B) Core competency
C) Core concept
D) Core cost-center

Question 8

A fast-food restaurant's ability to quickly provide inexpensive food might be referred to as a?

A) Service recovery effort
B) Process mapping
C) Design acquisition
D) Core competency

Question 9

Poor goods and services designs can lead to all of the following except?

A) Costs due to warranty repairs
B) Costs due to product returns
C) Lost customers
D) Enhanced brand equity

Question 10

In many industries, more than ____________ of revenues are generated from new products introduced during the previous year.

A) 10%
B) 20%
C) 40%
D) 75%

Question 11

Which of the following combinations of success and failure related to modifying corporate core competencies is correct?

A) Blockbuster successful, Netflix successful
B) Blockbuster successful, Netflix failure
C) Blockbuster failure, Netflix successful
D) Blockbuster failure, Netflix failure

Question 12

All of the following are leading to shortened product life cycles except?

A) Decreased competition
B) Changing tastes
C) Cheaper materials
D) Technology changes

Question 13

Firms can improve their core competencies over time by all of the following except?

A) Maintaining the "status quo"
B) Additional training
C) Use of technology
D) Continued management support

Question 14

The automotive industry __________ contract manufacturers for components.

A) Is forbidden from using
B) Relies heavily on
C) Rarely uses
D) At one time was reliant on

Question 15

Product life cycles are, in general?

A) Lengthening
B) Shortening
C) Neither lengthening nor shortening
D) It is impossible to determine how or if product life cycles are changing

Question 16

The process of making decisions about the characteristics, features, and performance of a company's goods and services refers to?

A) Product placement
B) Product procurement
C) Product decisions
D) Product design

Question 17

Apple's Newton device was an example of?

A) Poor internal fit
B) Poor external fit
C) Poor internal and external fit
D) Neither poor internal nor poor external fit

Question 18

When a firm does not have core competencies in an area needed to produce certain products, it may choose to rely upon a(n)?

A) Dependent manufacturer
B) Allied manufacturer
C) Contract manufacturer
D) Conscripted manufacturer

Question 19

Strategic fit requires alignment of product design with?

A) External fit
B) Internal fit
C) Both external and internal fit
D) Neither external nor internal fit

Question 20

A hotel relying on another firm to provide housekeeping services is likely utilizing a?

A) Delivered service
B) Contract service
C) Secondary service
D) Composite service

Question 21

A firm estimates that it will receive cash flows from a new product of $150,000 in Year 1, $220,000 in Year 2, and $150,000 in Year 3. If a discount rate of 7% is assumed, what is the NPV of this product's cash flows?

A) $454,788
B) $556,400
C) $520,000
D) NPV cannot be determined from the information given

Question 22

QFD, in a product development context, refers to?

A) Quick foundational development
B) Quality function deployment
C) Quiet following distance
D) Quadratic finite difference

Question 23

Which question is not associated with the product when conducting product screening?

A) What unmet needs will this product satisfy?
B) What is the expected product life?
C) How will we distribute the product?
D) What are our product's competitive strengths?

Question 24

Which ordering of the first three stages of the product development process is correct?

A) Analyze and screen $\rightarrow$ Generate ideas $\rightarrow$ Develop concept
B) Generate ideas $\rightarrow$ Analyze and screen $\rightarrow$ Develop concept
C) Generate ideas $\rightarrow$ Develop concept $\rightarrow$ Analyze and screen
D) Develop concept $\rightarrow$ Analyze and screen $\rightarrow$ Generate ideas

Question 25

Product screening issue categories include all of the following except?

A) The Customer
B) The Product
C) The Competition
D) The Financials

Question 26

Reaching out to universities, suppliers, customers, and others in a move toward research collaboration is referred to as?

A) Net casting
B) Research distribution
C) Entrepreneurial marketing
D) Open innovation

Question 27

Which question is not associated with the financials when conducting product screening?

A) Who is the competition?
B) What are the barriers to entry for this product?
C) Are the preliminary product design specifications established?
D) What is the expected profit?

Question 28

Which question is not associated with the competition when conducting product screening?

A) Who is the competition?
B) What is the break-even point?
C) Can we sustain a competitive advantage?
D) How will we compete?

Question 29

The practice of copying what others do best is referred to, in a product design context, as?

A) Benchmarking
B) Emulation
C) Reproduction
D) Querying

Question 30

The "roof" of the house of quality indicates what?

A) Design target values
B) Correlations between a product's technical characteristics
C) A competitive comparison between the firm and competitors
D) Feature importance weighting

Question 31

The relationships between customer requirements, product attributes, and design specification can be captured by what tool?

A) Foundation of design
B) Villa of excellence
C) Edifice of engineering
D) House of quality

Question 32

A firm estimates that it will receive cash flows from a new product of $25,000 in Year 1, $22,000 in Year 2, and $19,000 in Year 3. If a discount rate of 8% is assumed, what is the NPV of this product's cash flows?

A) $71,280
B) $57,092
C) $66,000
D) NPV cannot be determined from the information given

Question 33

A firm estimates that it will receive cash flows from a new product of $1,000 in Year 1, $800 in Year 2, and $700 in Year 3. If a discount rate of 9% is assumed, into what range below will the NPV be?

A) Less than $2500
B) Between $2500 and $2800
C) Between $2800 and $3100
D) More than $3100

Question 34

The alignment of product designs with the capabilities of design engineers and the wishes of the customer is achieved through which technique?

A) QFD
B) QDF
C) QBD
D) QDB

Question 35

What set of scientific techniques and insights is sometimes used by firms to attempt to better understand the subconscious minds of consumers?

A) Neural networks
B) Mind-melding
C) Neuroscience
D) Telepathy

Question 36

A firm estimates that the net present value of future cash flows from a new product will be $125,000. The firm estimates that they will spend $135,000 on product development and research. Based on these figures, what should the firm do?

A) Develop the product
B) Not develop the product
C) Release the product to market immediately
D) Cannot be determined from the information given

Question 37

Which ordering of the last three stages of the product development process is correct?

A) Test product $\rightarrow$ Design product and processes $\rightarrow$ Introduce product to market
B) Design product and processes $\rightarrow$ Introduce product to market $\rightarrow$ Test product
C) Introduce product to market $\rightarrow$ Test product $\rightarrow$ Design product and processes
D) Design product and processes $\rightarrow$ Test product $\rightarrow$ Introduce product to market

Question 38

A typical financial measurement of the value of a new product idea is?

A) Net present return
B) Net equitable distribution
C) Net present value
D) Net deductible allowances

Question 39

The first stage of the product development process is?

A) Product and process design
B) Idea generation
C) Concept development
D) Screening and analysis

Question 40

Which Excel function is used to calculate net present value?

A) NPER
B) NPV
C) PMT
D) PRICEDISC

Question 41

Production on a limited basis to determine if production equipment can reliably manufacture the product at full scale is referred to as?

A) Rapid prototyping
B) Pilot manufacturing
C) Reliability engineering
D) Grassroots campaigning

Question 42

DFMA, in the context of product design, refers to?

A) Design for manufacture and assembly
B) Design for modification and assignment
C) Design for minimum activity
D) Design for molding and actualization

Question 43

ESI, in the context of concurrent engineering, refers to?

A) Early salesforce initiative
B) Early supplier involvement
C) Early supplier improvement
D) Early salesforce involvement

Question 44

A firm determines that its IRR for a new product is 12%. For which discount rate does it make sense to develop the product?

A) 9%
B) 13%
C) 15%
D) 20%

Question 45

Concurrent engineering team member participation is likely to lead to what types of changes to the numbers of product design, processing and operating problems?

A) Fewer problems
B) More problems
C) Same number of problems
D) Impossible to determine how the frequency of problems may change

Question 46

Sustainability can give firms a competitive advantage in all of the following ways except?

A) Lower costs
B) Product design elements desired by customers
C) Increased product returns
D) Better productivity

Question 47

Concurrent engineering approaches may create cross-functional teams that are likely to include all of the following except?

A) Engineering
B) Executives
C) Marketing
D) Operations

Question 48

All of the following are associated with concurrent engineering except?

A) Linear product and process design phases
B) Fewer product design, processing, and operating problems
C) A high level of autonomy granted to the development teams
D) Cross-functional new product development teams

Question 49

On a service blueprint, the line that delineates between the activities that the customer sees and those not seen by customers is called the?

A) Line of demarcation
B) Line of separation
C) Line of delineation
D) Line of visibility

Question 50

A firm that modifies a product design to utilize fewer parts and a "snap-in" design rather than screws is likely using which concept?

A) Reliability engineering
B) Concurrent engineering
C) Design for environment
D) Design for manufacture and assembly

Question 51

Inviting supplier representatives to participate on new product design teams is a practice that is often known as?

A) Early concurrent involvement
B) Early partner cooperation
C) Early distributor cooperation
D) Early supplier involvement

Question 52

A company that chooses to use "off-the-shelf" parts and less expensive materials may be engaging in what product design practice?

A) Sales engineering
B) Value engineering
C) Discount engineering
D) Quality engineering

Question 53

Value engineering is?

A) Reducing new product cost by use of readily available parts
B) Use of cheaper materials and simpler designs
C) Both reducing new product cost by use of readily available parts and use of cheaper materials and simpler designs
D) Neither reducing new product cost by use of readily available parts nor use of cheaper materials and simpler designs

Question 54

Simultaneous design of products and their manufacturing and support processes is referred to as?

A) Roundtable design
B) Leveraged engineering
C) Double design
D) Concurrent engineering

Question 55

Environmental impacts of products may include all of the following except?

A) How to dispose of items at end of product life
B) Energy consumed during product's life
C) Ease of product assembly
D) Marketing costs associated with the product

Question 56

The Japanese name for concurrent engineering practices is?

A) Soku system
B) Salamander system
C) Sashimi system
D) Sushi system

Question 57

A firm plans to spend $50,000 on the development of a new product. Using the NPV formula with an IRR of 9% yields $65,651. An IRR of 10% yields $55,980, and an IRR of 11% yields $50,000. What is the estimated IRR of this new product development?

A) 9%
B) 10%
C) 11%
D) Cannot be determined from the information given

Question 58

Final product testing is likely to involve feedback from all of the following except?

A) Test markets
B) Employees
C) Widespread release to customers
D) Suppliers

Question 59

Reducing the number of parts used and relying on the use of existing part designs are related to a concept referred to as?

A) DCMA
B) DBMA
C) DFMA
D) DAMA

Question 60

A service blueprint displays which of the following?

A) Activities between the service provider and customer
B) Noncontact activities that do not involve the customer
C) Both activities between the service provider and customer and noncontact activities that do not involve the customer
D) Neither activities between the service provider and customer nor noncontact activities that do not involve the customer

Question 61

Modern packaging of products can be used to fight counterfeiting/tampering and?

A) Enhance product returnability
B) Enhance product manufacturing
C) Enhance product traceability
D) Enhance product life cycle

Question 62

A firm is trying to determine which of two products it should launch. Product A has an expected life of three years. It will bring in cash flows of $11,000 in each of the three years. Product B has an expected life of two years. It will bring in cash flows of $15,000 in each of the two years. Assume a discount rate of 8%. Which product should the firm, based on NPV alone, select?

A) Product A
B) Product B
C) Product A and B are equivalent
D) NPV for the products cannot be calculated with the information given.

Question 63

Surveys suggest that approximately what percentage of consumers prefer to buy products from companies that are perceived as helping the environment?

A) 10%
B) 25%
C) 50%
D) 80%

Question 64

The massive adoption of cell phone technology has led to or driven all of the following except?

A) Mobile broadband adoption
B) Wearable technology
C) Personal health monitoring
D) Decrease in photos taken by consumers

Question 65

A firm is trying to determine which of two products it should launch. Product A has an expected life of three years. It will bring in cash flows of $10,000 in each of the three years. Product B has an expected life of two years. It will bring in cash flows of $15,000 in each of the two years. Assume a discount rate of 8%. Which product should the firm, based on NPV alone, select?

A) Product A
B) Product B
C) Product A and B are equivalent
D) NPV for the products cannot be calculated with the information given.

Question 66

A hardware store decides to place bins near the store entrances for customers to leave used (burned-out) light bulbs. The store is likely concerned with which element of sustainability?

A) Product rebates
B) Product disposal
C) Design for manufacture and assembly
D) Design for environment

Question 67

A firm is trying to determine which of two products it should launch. Product A has an expected life of three years. It will bring in cash flows of $11,000 in each of the three years. Product B has an expected life of two years. It will bring in cash flows of $15,500 in each of the two years. Assume a discount rate of 8%. Which product should the firm, based on NPV alone, select?

A) Product A
B) Product B
C) Product A and B are equivalent
D) NPV for the products cannot be calculated with the information given.

Question 68

A firm is trying to determine if it should launch a product. The product has an expected life of three years. It will bring in cash flows of $10,000 in each of the three years. The company estimates that it will invest $24,000 in product research and development costs. Assume a discount rate of 8%. Based on NPV, what should the firm do?

A) Launch the product because NPV is greater than the amount to be invested
B) Not launch the product because NPV is greater than the amount to be invested
C) Launch the product because the amount to be invested is greater than NPV
D) Not launch the product because the amount to be invested is greater than NPV

Question 69

The use of stand-up packages instead of rigid containers can reduce store shelf footprints by approximately?

A) 1%
B) 5%
C) 10%
D) 25%

Question 70

A firm is trying to determine if it should launch a product. The product has an expected life of three years. It will bring in cash flows of $10,000 in each of the three years. The company estimates that it will invest $28,000 in product research and development costs. Assume a discount rate of 8%. Based on NPV, what should the firm do?

A) Launch the product because NPV is greater than the amount to be invested
B) Not launch the product because NPV is greater than the amount to be invested
C) Launch the product because the amount to be invested is greater than NPV
D) Not launch the product because the amount to be invested is greater than NPV

Question 71

Workplace designs are changing. New workspaces are characterized by all of the following except?

A) Elimination of perimeter offices
B) Use of employee breakout areas
C) Open workspaces
D) Increased emphasis on corporate hierarchy in office design

Question 72

A firm is trying to determine if it should launch a product. The product has an expected life of five years. It will bring in cash flows of $10,000 in each of the first three years and then $5,000 in the last two years. The company estimates that it will invest $30,000 in product research and development costs. Assume a discount rate of 8%. Based on NPV, what should the firm do?

A) Launch the product because NPV is greater than the amount to be invested
B) Not launch the product because NPV is greater than the amount to be invested
C) Launch the product because the amount to be invested is greater than NPV
D) Not launch the product because the amount to be invested is greater than NPV

Question 73

The use of stand-up packages instead of rigid containers can reduce container weight by approximately?

A) 95%
B) 75%
C) 50%
D) 25%

Question 74

A firm is trying to determine if it should launch a product. The product has an expected life of five years. It will bring in cash flows of $10,000 in each of the first three years and then $5,000 in the last two years. The company estimates that it will invest $35,000 in product research and development costs. Assume a discount rate of 8%. Based on NPV, what should the firm do?

A) Launch the product because NPV is greater than the amount to be invested
B) Not launch the product because NPV is greater than the amount to be invested
C) Launch the product because the amount to be invested is greater than NPV
D) Not launch the product because the amount to be invested is greater than NPV

Question 75

A firm is trying to determine if it should launch a product. The product has an expected life of three years. It will bring in cash flows of $10,000 in each of the three years. The company estimates that it will invest $20,000 in product research and development costs. What is the estimated IRR for this product? Choose the IRR value that is closest to the amount invested.

A) 20%
B) 21%
C) 22%
D) 23%

Question 76

A firm is trying to determine if it should launch a product. The product has an expected life of three years. It will bring in cash flows of $5,000 in the first year, $4,000 in the second year, and $3,000 in the third year. The company estimates that it will invest $9,500 in product research and development costs. What is the estimated IRR for this product? Choose the IRR value that is closest to the amount invested.

A) 7%
B) 14%
C) 21%
D) 28%

Question 77

A firm is trying to determine if it should launch a product. The product has an expected life of three years. It will bring in cash flows of $10,000 in the first year, $9,000 in the second year, and $7,500 in the third year. The company estimates that it will invest $20,000 in product research and development costs. What is the estimated IRR for this product? Choose the IRR value that is closest to the amount invested.

A) 5%
B) 12%
C) 15%
D) 16%

Question 78

Sleeve labels are a trend that are replacing what?

A) Adhesive labels on containers
B) Bar codes
C) Radio-frequency identification tags
D) Anti-tamper devices

Question 79

A firm is trying to determine if it should launch a product. The product has an expected life of three years. It will bring in cash flows of $10,000 in the first year, $11,000 in the second year, and $8,000 in the third year. The company estimates that it will invest $20,000 in product research and development costs. What is the estimated IRR for this product? Choose the IRR value that is closest to the amount invested.

A) 12%
B) 22%
C) 32%
D) 42%

Question 80

Evaluating a product's carbon footprint, energy usage, air acidification impact, and water contamination profile occurs during what type of assessment?

A) End cycle
B) Life cycle
C) Product cycle
D) Planning cycle