assignment 2 product process service design r(1)

Gaither/Frazier 9e Review and Discussion Questions Chapter 4

POM : HOME ASSIGNMENT-2Product, Process, and Service Design

PART-1 : REVIEW AND DISCUSSION QUESTIONS(DISTRIBUTE 19 QUESTIONS BETWEEN ODD AND EVEN AS BEFORE)

Date of Issue : 27 Feb 2012, Date of Submission : 05 Mar 2012

1. Name and describe the steps in developing new products. What are the key differences between a prototype and a production design?

2. Explain three ways that U.S. companies are getting new products to market faster.

3. Explain the meaning of designing products for ease of production. Why is this important?

4. Explain the meaning of designing products for quality. Why is this important?

5. Compare developing new products and developing new services. How are they alike? How are they different?

6. Why might positioning strategies for products change over time? What is the significance of this concept to operations strategy?

7. Discuss the role of process design in operations strategy.

8. Describe the relationship between process design and product design. What is simultaneous engineering? What are its advantages?

9. What are the steps in process design? What inputs are required for process design? What are the outputs of process design?

10. Explain how these factors affect process design decisions: a. nature of product demand, b. degree of vertical integration, c. product and volume flexibility, d. degree of automation, e. product quality.

11. Explain why product-focused systems are sometimes called: a. continuous production, b. production or assembly lines.

a. Continuous production--because materials tend to move continuously during production, without in-process inventories.

b. Production or assembly lines--this type of production is perhaps thought of most often when we visualize product-focused systems. Components are assembled along systems of line flow production.

Explain the difference between: a. discrete unit manufacturing and process manufacturing, b. process-focused production and process manufacturing.

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12. Explain why process-focused production is sometimes called: a. intermittent production, b. job shops.

13. Under what conditions would a manager want to form manufacturing cells in a job shop? What is a family of parts?

14. As the number of product designs increases and as the batch sizes decrease, what happens to: a. production cost per unit, b. product flexibility. Give some reasons why this relationship exists.

15. Briefly explain how you would decide between two different process designs. What factors would you consider? What analysis tools would you use?

16. Explain what is meant by annual breakeven quantity for a process. How is this related to risk?

17. Describe an assembly chart and a process chart. How are they different? Explain how they are used in process design.

18. Name and describe three classes of production processes for services. Give an example for each class.

19. What steps can be taken in designing production processes for services that would make this activity more quantifiable and more objective? Discuss the difficulties that could be encountered in following these steps.

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POM : ASSIGNMENT-2Product, Process, and Service Design

PART-2 : PROBLEMS(ANSWER ALL 5 QUESTIONS)

Date of Issue : 27 Feb 2012, Date of Submission : 05 Mar 2012

1. Southwestern University currently has 950 students in its MBA program. The present program is a lockstep approach that its students refer to as the "assembly line." In this system students "flow" through the program, each taking the same courses as every other student and in the same sequence. Martha Alief, the dean, estimates that the annual fixed cost of the MBA program is $900,000 and the variable cost per student per year is $1,000. Ms. Alief is considering a faculty proposal for modifying the MBA program to improve its academic standards. The suggested changes would allow students flexibility in selecting courses and the sequence in which the courses are taken. Under the new program, Ms. Alief estimates that the annual fixed cost would be only $500,000, but the variable cost per student per year would be $1,600. If the school receives budget allocations of $2,000 per MBA student:

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a. What is the present surplus or deficit of the MBA program? b. What enrollment is required in the present program in order to balance the

budget? c. How many students would need to be in the proposed MBA program for Ms.

Alief to be indifferent between the two programs if only budget factors are considered?

d. How many MBA students would be required in the proposed program in order for its total annual cost to be the same as in the present program?

2. A food products manufacturer is conducting a study to investigate how to increase its production capacity. Three alternatives are being considered: (1) enlarge and enhance existing processes, (2) build a new factory with new irradiation and vac-poly packaging (IVP) processes, or (3) build a small new factory with new processes to be used in tandem with its existing factory. The firm has prepared these estimates:

(1) (2) (3)Enlarge/ Build NewEnhance New FactoryPresent Factory and OldProcesses (IVP) Factory

Annual prod. volume (cases) 1,500,000 1,500,000 1,500,000Annual fixed costs $1,600,000 $2,200,000 $1,800,000Variable cost per case $3.051 $2.645 $2.898

a. On the basis of annual cost, rank the alternatives from most desirable to least

desirable.

b. Based on annual cost, if 1,800,000 cases of products were produced in a year, rank the alternatives from most desirable to least desirable.

c. Based on your findings in Parts a and b above, discuss the importance of accurate forecasting of production levels in decisions among production processing alternatives. What practical ways can you suggest for including the uncertainty present in forecasts in analyses such as you have done in this problem?

d. What factors other than annual cost should be considered in this decision?

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3. Grey’s Manufacturing produces machined parts for the shipbuilding industry in Boston. Its factory is now a conventional process-focused job shop with departments built around the kinds of machining needed by the parts. After an engineering study, Grey’s management is considering a proposal to take one family of parts from the job shop and place it in a new manufacturing cell. The demand for this family of parts remains rather stable from year to year, and the orders for these parts are in moderate-sized batches. The cost of operating the job shop is expected to remain unchanged. The decision will hinge on whether the parts in the family can be manufactured more economically in a job shop or in a cellular manufacturing setting.

Present ProposedJob Cellular

Shop ManufacturingAnnual production volume 80,000 80,000 (parts in family)Annual fixed costs $25,000 $220,000Variable cost per part $10.40 $7.80

a. Should the manufacturing-cell proposal be accepted?b. What would the annual cost savings be if the proposal is accepted?c. At what volume of parts would Grey’s management be indifferent toward the

proposal?d. What other considerations would affect the decision to accept the proposal?

4 A company needs to replace an old machine that is used to produce its primary product. The selling price of the product will be Rs 219 per unit. Two different machines could produce the product are being considered. Machine A would have an annual fixed cost of Rs 9,500 and a variable cost per unit of Rs119. Machine B would have an annual fixed cost of Rs 7,900 and a variable cost per unit of Rs 128.

a. Compute the annual break-even quantity for each macine.b. Based on the annual cost, at what annual volume would the company be

indifferent to purchasing machine A or B?

5. A city is considering changing the way it bills customers for their electricity use. Rather than billing them based on monthly meter readings, the new proposal would bill them for a flat monthly rate of $300. Without the flat rate, customers’ monthly cost of service is normally distributed, with a mean of $270 and a standard deviation of $40.

a. What is the probability that customers will spend more than the flat monthly rate of $300?

b. What is the expected monthly profit per customer from the flat rate proposal?

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assignment 2 product process service design r(1)

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