heizer om10 ch05-designh good and services

10/16/2010

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55 Design of Goods and Services

Design of Goods and Services

5 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall

PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer and Render Heizer and Render Operations Management, 10e Operations Management, 10e Principles of Operations Management, 8ePrinciples of Operations Management, 8e

PowerPoint slides by Jeff Heyl

OutlineOutline

Global Company Profile: Regal MarineGoods and Services Selection


Product Strategy Options Support Competitive AdvantageProduct Life CyclesLife Cycle and StrategyProduct-by-Value Analysis

Outline Outline -- ContinuedContinuedGenerating New Products

New Product OpportunitiesImportance of New Products

Product Development


pProduct Development SystemQuality Function Deployment (QFD)Organizing for Product DevelopmentManufacturability and Value Engineering

Outline Outline -- ContinuedContinued

Issues for Product DesignRobust DesignModular Design


Computer-Aided Design (CAD)Computer-Aided Manufacturing (CAM)Virtual Reality TechnologyValue Analysis

Outline Outline -- ContinuedContinuedEthics, Environmentally Friendly Design, and Sustainability

Systems and Life Cycle PerspectivesLaws and Industry Standards


yTime-Based Competition

Purchasing Technology by Acquiring a FirmJoint VenturesAlliances

Outline Outline -- ContinuedContinuedDefining a Product

Make-or-Buy DecisionsGroup Technology

Documents For Production


Documents For ProductionProduct Life-Cycle Management (PLM)

Service DesignDocuments for Services

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Outline Outline -- ContinuedContinued

Application of Decision Trees to Product DesignTransition to Production


Learning ObjectivesLearning Objectives

1. Define product life cycle2 D ib d t d l t t

When you complete this chapter you should When you complete this chapter you should be able to :be able to :


2. Describe a product development system3. Build a house of quality4. Describe how time-based competition is

implemented

Learning ObjectivesLearning Objectives

5. Describe how products and services are defined by operations management

When you complete this chapter you should When you complete this chapter you should be able to :be able to :


y p g6. Describe the documents needed for

production7. Describe customer participation in the

design and production of services8. Apply decision trees to product issues

Regal MarineRegal Marine

Global market3-dimensional CAD system

Reduced product development time


Reduced product development timeReduced problems with toolingReduced problems in production

Assembly line productionJIT

The objective of the product decision The objective of the product decision is to develop and implement a is to develop and implement a

product strategy that meets the product strategy that meets the d d f th k t l ithd d f th k t l ith

Product DecisionProduct Decision


demands of the marketplace with a demands of the marketplace with a competitive advantagecompetitive advantage

The good or service the organization provides societyTop organizations typically focus on core products

Product DecisionProduct Decision


pCustomers buy satisfaction, not just a physical good or particular serviceFundamental to an organization's strategy with implications throughout the operations function

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Product Strategy OptionsProduct Strategy Options

DifferentiationShouldice Hospital

Low cost


Low costTaco Bell

Rapid responseToyota

Product Life CyclesProduct Life Cycles

May be any length from a few hours to decades


The operations function must be able to introduce new products successfully

Product Life CyclesProduct Life Cycles

and

cash

flow Cost of development and production

Net revenue (profit)

Sales revenue


Negative cash flow

Introduction Growth Maturity Decline

Sale

s, c

ost,

a

Cash flow

Loss

Figure 5.1

Product Life CycleProduct Life CycleIntroductory PhaseIntroductory Phase

Fine tuning may warrant unusual expenses for


1. Research2. Product development3. Process modification and

enhancement4. Supplier development

Product Life CycleProduct Life Cycle

Growth PhaseGrowth Phase

Product design begins to stabilize


stabilizeEffective forecasting of capacity becomes necessaryAdding or enhancing capacity may be necessary


Maturity PhaseMaturity Phase

Competitors now establishedHigh volume innovative


High volume, innovative production may be neededImproved cost control, reduction in options, paring down of product line

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Decline PhaseDecline Phase

Unless product makes a special contribution to the


special contribution to the organization, must plan to terminate offering

Product Life Cycle CostsProduct Life Cycle Costs

Costs incurred

Costs committed

tal c

ost

100 –

80 –

60 –


Costs incurred

Ease of change

Concept Detailed Manufacturing Distribution,design design service,

prototype and disposal

Perc

ent o

f to

40 –

20 –

0 –

ProductProduct--byby--Value AnalysisValue Analysis

Lists products in descending order of their individual dollar contribution to the firm


Lists the total annual dollar contribution of the productHelps management evaluate alternative strategies

ProductProduct--byby--Value AnalysisValue Analysis

Individual Contribution ($)

Total Annual Contribution ($)

Sam’s Furniture Factory


Love Seat $102 $36,720

Arm Chair $87 $51,765

Foot Stool $12 $6,240

Recliner $136 $51,000

New Product OpportunitiesNew Product Opportunities

1. Understanding the customer

2. Economic change3 Sociological and


3. Sociological and demographic change

4. Technological change5. Political/legal change6. Market practice, professional

standards, suppliers, distributors

Importance of New ProductsImportance of New ProductsPercentage of Sales from New Products

50%

40%

30%


Industry leader

Top third

Middle third

Bottom third

Figure 5.2a

20%

10%

Position of Firm in Its Industry

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Disney AttendanceDisney AttendanceFigure 5.2b

50

40

tors

Magic Kingdom

Disney-HollywoodEpcot

Animal Kingdom


30

20

10

0

Mill

ions

of v

isit

‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07

Cisco Product RevenueCisco Product RevenueFigure 5.2c

35

30

25

ars

Other

RoutersSwitches


20

15

10

5

0

Bill

ions

of d

olla

‘02 ‘03 ‘04 ‘05 ‘06 ’07 ‘08

Product Development Product Development SystemSystem

Functional Specifications

Customer Requirements

Ability

Ideas

Figure 5.3


Scope of product

development team

Scope for design and engineering

teams

Evaluation

Introduction

Test Market

Design Review

Product Specifications

Quality Function Quality Function DeploymentDeployment

1. Identify customer wants2. Identify how the good/service will satisfy

customer wants3 R l t t t t d t h


3. Relate customer wants to product hows4. Identify relationships between the firm’s hows5. Develop importance ratings6. Evaluate competing products7. Compare performance to desirable technical

attributes

QFD House of QualityQFD House of Quality

How to satisfycustomer wants

Interrelationships

itive

m

ent

What the

Customer importance

ratings


Relationshipmatrix

Com

peti

asse

ssm

Technicalevaluation

Target values

What the customer

wants

Weighted rating

House of Quality ExampleHouse of Quality Example

Your team has been charged with designing a new camera for Great Cameras, Inc.


The first action is to construct a House of Quality

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Customerimportance

rating

What the customer

wants

What the Customer

Wants

RelationshipMatrix

TechnicalAttributes and

Evaluation

How to SatisfyCustomer Wants

Interrelationships

Ana

lysi

s of

Com

petit

ors


rating(5 = highest)

Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color correction 1

House of Quality ExampleHouse of Quality ExampleWhat the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Ana

lysi

s of

Com

petit

ors

uire

men

ts

ents


Low

ele

ctric

ity re

qu

Alu

min

um c

ompo

n

Aut

o fo

cus

Aut

o ex

posu

re

Pain

t pal

let

Ergo

nom

ic d

esig

n



Wants

RelationshipMatrix


Evaluation


Interrelationships

Ana

lysi

s of

Com

petit

ors

High relationshipMedium relationshipLow relationship


Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1

Relationship matrix


Wants

RelationshipMatrix


Evaluation


Interrelationships

Ana

lysi

s of

Com

petit

ors

rem

ents

nts

Relationships between the things we can do


Low

ele

ctric

ity re

quir

Alu

min

um c

ompo

nen

Aut

o fo

cus

Aut

o ex

posu

re

Pain

t pal

let

Ergo

nom

ic d

esig

n


Wants

RelationshipMatrix


Evaluation


Interrelationships

Ana

lysi

s of

Com

petit

ors

Lightweight 3Easy to use 4


Weighted rating

Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 9 27 27 32 25


Com

pany

A

Com

pany

B

How well do competing products meet customer wants

What the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Ana

lysi

s of

Com

petit

ors


C C

G PG PF GG PP P

Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 5

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Wants

RelationshipMatrix


Evaluation


Interrelationships

Ana

lysi

s of

Com

petit

ors

Target per 1

0,00

0ki

ng5 - 37© 2011 Pearson Education, Inc. publishing as Prentice Hall

gvalues(Technical attributes)

Technical evaluation

Company A 0.7 60% yes 1 ok GCompany B 0.6 50% yes 2 ok FUs 0.5 75% yes 2 ok G

0.5

A

75%

2’ to

∞

2 ci

rcui

ts

Failu

re 1

pPa

nel r

an


Completed House of Quality

Lightweight 3Easy to use 4R li bl 5

Low

ele

ctric

ity re

quire

men

ts

Alum

inum

com

pone

nts

Auto

focu

s

Auto

exp

osur

e

Pain

t pal

let

Ergo

nom

ic d

esig

n

Com

pany

A

Com

pany

B

G PG PF G


Quality Reliable 5Easy to hold steady 2Color correction 1Our importance ratings

F GG PP P

Target values(Technical attributes)

Technical evaluation

Company A 0.7 60% yes 1 ok G

Company B 0.6 50% yes 2 ok F

Us 0.5 75% yes 2 ok G

0.5

A75

%2’

to ∞

2 ci

rcui

tsFa

ilure

1 p

er 1

0,00

0Pa

nel r

anki

ng

22 9 27 27 32 25

House of Quality SequenceHouse of Quality SequenceDeploying resources through the organization in response to customer requirements

Quality l


Figure 5.4

Prod

uctio

n pr

oces

s

plan

House 4

Spec

ific

com

pone

nts

Production process

House 3

Des

ign

char

acte

ristic

s

Specific components

House 2

Cus

tom

er

requ

irem

ents

Design characteristics

House 1

Organizing for Product Organizing for Product DevelopmentDevelopment

Historically – distinct departmentsDuties and responsibilities are defined


Difficult to foster forward thinkingA Champion

Product manager drives the product through the product development system and related organizations

Organizing for Product Organizing for Product DevelopmentDevelopment

Team approachCross functional – representatives from all disciplines or functions


Product development teams, design for manufacturability teams, value engineering teams

Japanese “whole organization” approach

No organizational divisions

Manufacturability andManufacturability andValue EngineeringValue Engineering

Benefits:1. Reduced complexity of products2. Reduction of environmental impact3 Addi i l d di i f d


3. Additional standardization of products4. Improved functional aspects of product5. Improved job design and job safety6. Improved maintainability (serviceability) of

the product7. Robust design

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Cost Reduction of a Bracket Cost Reduction of a Bracket via Value Engineeringvia Value Engineering

5 - 43© 2011 Pearson Education, Inc. publishing as Prentice HallFigure 5.5

Issues for Product Issues for Product DevelopmentDevelopment

Robust designModular designComputer aided design (CAD)


Computer-aided design (CAD)Computer-aided manufacturing (CAM)Virtual reality technologyValue analysisEnvironmentally friendly design

Robust DesignRobust Design

Product is designed so that small variations in production or assembly do not adversely affect


assembly do not adversely affect the productTypically results in lower cost and higher quality

Modular DesignModular Design

Products designed in easily segmented componentsAdds flexibility to both production


y pand marketingImproved ability to satisfy customer requirements

Using computers to design products and prepare engineering documentation

Computer Aided Design Computer Aided Design (CAD)(CAD)


documentationShorter development cycles, improved accuracy, lower costInformation and designs can be deployed worldwide

Design for Manufacturing and Assembly (DFMA)

Solve manufacturing problems during the design stage

3-D Object Modeling

Extensions of CADExtensions of CAD


3 D Object ModelingSmall prototype development

CAD through the internetInternational data exchange through STEP

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ComputerComputer--Aided Aided Manufacturing (CAM)Manufacturing (CAM)

Utilizing specialized computers and program to control

f t i i t


manufacturing equipmentOften driven by the CAD system (CAD/CAM)

1. Product quality2. Shorter design time

Benefits of CAD/CAMBenefits of CAD/CAM


3. Production cost reductions4. Database availability5. New range of capabilities

Virtual Reality TechnologyVirtual Reality Technology

Computer technology used to develop an interactive, 3-D model of a product from the basic CAD dataAll l t ‘ ’ th fi i h d


Allows people to ‘see’ the finished design before a physical model is builtVery effective in large-scale designs such as plant layout

Value AnalysisValue Analysis

Focuses on design improvement during productionSeeks improvements leading either


p gto a better product or a product which can be produced more economically with less environmental impact

Ethics, Environmentally Ethics, Environmentally Friendly Designs, and Friendly Designs, and

SustainabilitySustainabilityIt is possible to enhance productivity and deliver goods and services in an environmentally and ethically


environmentally and ethically responsible mannerIn OM, sustainability means ecological stabilityConservation and renewal of resources through the entire product life cycle


SustainabilitySustainabilityDesign

Polyester film and shoes


ProductionPrevention in production and packaging

DestructionRecycling in automobiles

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SustainabilitySustainability


The Ethical ApproachThe Ethical Approach

View product design from a systems perspective

Inputs processes outputs


Inputs, processes, outputsCosts to the firm/costs to society

Consider the entire life cycle of the product

The Ethical ApproachThe Ethical ApproachGoals1. Developing safe end environmentally

sound practices2. Minimizing waste of resources


2. Minimizing waste of resources3. Reducing environmental liabilities4. Increasing cost-effectiveness of

complying with environmental regulations

5. Begin recognized as a good corporate citizen

Guidelines for Environmentally Guidelines for Environmentally Friendly DesignsFriendly Designs

1. Make products recyclable2. Use recycled materials


3. Use less harmful ingredients4. Use lighter components5. Use less energy6. Use less material

Laws and Industry Laws and Industry StandardsStandards

For Design …For Design …

Food and Drug Administration


Food and Drug AdministrationConsumer Products Safety CommissionNational Highway Safety AdministrationChildren’s Product Safety Act


For Manufacture/Assembly …For Manufacture/Assembly …Occupational Safety and Health


Occupational Safety and Health AdministrationEnvironmental Protection AgencyProfessional ergonomic standardsState and local laws dealing with employment standards, discrimination, etc.

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For Disassembly/Disposal …For Disassembly/Disposal …

Vehicle Recycling Partnership


Vehicle Recycling PartnershipIncreasingly rigid laws worldwide

TimeTime--Based CompetitionBased Competition

Product life cycles are becoming shorter and the rate of technological change is


increasingDeveloping new products faster can result in a competitive advantage

Product Development Product Development ContinuumContinuumEXTERNAL DEVELOPMENT STRATEGIES

AlliancesJoint ventures

Purchase technology or expertiseby acquiring the developer

Figure 5.6


InternalInternal Cost of product development SharedSharedLengthyLengthy Speed of product development Rapid and/Rapid and/

or Existingor ExistingHighHigh Risk of product development SharedShared

INTERNAL DEVELOPMENT STRATEGIESMigrations of existing products

Enhancements to existing productsNew internally developed products

Acquiring TechnologyAcquiring TechnologyBy Purchasing a Firm

Speeds developmentIssues concern the fit between the acquired organization and product and the host


Through Joint VenturesBoth organizations learnRisks are shared

Through AlliancesCooperative agreements between independent organizations

Defining The ProductDefining The Product

First definition is in terms of functionsRigorous specifications are developed during the design phase


developed during the design phaseManufactured products will have an engineering drawingBill of material (BOM) lists the components of a product

Engineering drawingShows dimensions, tolerances, and materialsShows codes for Group Technology

Product DocumentsProduct Documents


Shows codes for Group TechnologyBill of Material

Lists components, quantities and where usedShows product structure

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Monterey Jack CheeseMonterey Jack Cheese(a) U.S. grade AA. Monterey cheese shall conform to the following

requirements:(1) Flavor. Is fine and highly pleasing, free from undesirable flavors and

odors. May possess a very slight acid or feed flavor.(2) Body and texture. A plug drawn from the cheese shall be reasonably

firm. It shall have numerous small mechanical openings evenly distributed throughout the plug. It shall not possess sweet holes,


yeast holes, or other gas holes.(3) Color. Shall have a natural, uniform, bright and attractive appearance.(4) Finish and appearance—bandaged and

paraffin-dipped. The rind shall be sound, firm, and smooth providing a good protection to the cheese.

Code of Federal Regulation, Parts 53 to 109, General Service Administration

Engineering DrawingsEngineering Drawings


Figure 5.8

Bills of MaterialBills of MaterialBOM for Panel Weldment

NUMBER DESCRIPTION QTYA 60-71 PANEL WELDM’T 1

A 60-7 LOWER ROLLER ASSM. 1R 60-17 ROLLER 1R 60-428 PIN 1


P 60-2 LOCKNUT 1A 60-72 GUIDE ASSM. REAR 1R 60-57-1 SUPPORT ANGLE 1A 60-4 ROLLER ASSM. 102-50-1150 BOLT 1A 60-73 GUIDE ASSM. FRONT 1A 60-74 SUPPORT WELDM’T 1R 60-99 WEAR PLATE 102-50-1150 BOLT 1 Figure 5.9 (a)

Bills of MaterialBills of MaterialHard Rock Cafe’s Hickory BBQ Bacon Cheeseburger

DESCRIPTION QTYBun 1Hamburger patty 8 oz.Cheddar cheese 2 slicesBacon 2 stripsBBQ onions 1/2 cupHickory BBQ sauce 1 oz


Hickory BBQ sauce 1 oz.Burger set

Lettuce 1 leafTomato 1 sliceRed onion 4 ringsPickle 1 slice

French fries 5 oz.Seasoned salt 1 tsp.11-inch plate 1HRC flag 1

Figure 5.9 (b)

Parts grouped into families with similar characteristicsCoding system describes

Group TechnologyGroup Technology


Coding system describes processing and physical characteristicsPart families can be produced in dedicated manufacturing cells

Group Technology SchemeGroup Technology Scheme(a) Ungrouped Parts

(b) Grouped Cylindrical Parts (families of parts)

Grooved Slotted Threaded Drilled Machined


Figure 5.10

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1. Improved design2. Reduced raw material and purchases3. Simplified production planning and

control

Group Technology BenefitsGroup Technology Benefits


control4. Improved layout, routing, and

machine loading5. Reduced tooling setup time, work-in-

process, and production time

Documents for ProductionDocuments for Production

Assembly drawingAssembly chart


Route sheetWork orderEngineering change notices (ECNs)

Assembly DrawingAssembly Drawing

Shows exploded view of productDetails relative l ti t


locations to show how to assemble the product

Figure 5.11 (a)

Assembly ChartAssembly Chart1

2

3

4

5

R 209 Angle

R 207 Angle

Bolts w/nuts (2)

R 209 Angle

R 207 Angle

SA1

SA

A1

A2

Leftbracket

assembly

Rightbracket

Identifies the point of production where components flow into subassemblies and ultimately into the


5

6

7

8

9

10

11

Bolt w/nut

R 404 Roller

Lock washer

Part number tag

Box w/packing material

Bolts w/nuts (2)2 A2

A3

A4

A5

assembly

Poka-yoke inspection

Figure 5.11 (b)

ultimately into the final product

Route SheetRoute SheetLists the operations and times required to produce a component

Setup OperationProcess Machine Operations Time Time/Unit

1 Auto Insert 2 Insert Component 1 5 4


1 Auto Insert 2 Insert Component 1.5 .4Set 56

2 Manual Insert Component .5 2.3Insert 1 Set 12C

3 Wave Solder Solder all 1.5 4.1components to board

4 Test 4 Circuit integrity .25 .5test 4GY

Work OrderWork OrderInstructions to produce a given quantity of a particular item, usually to a schedule

Work OrderIt Q tit St t D t D D t


Item Quantity Start Date Due Date

Production DeliveryDept Location

157C 125 5/2/08 5/4/08

F32 Dept K11

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Engineering Change Notice Engineering Change Notice (ECN)(ECN)

A correction or modification to a product’s definition or documentation


Engineering drawingsBill of material

Quite common with long product life cycles, long manufacturing lead times, or

rapidly changing technologies

Configuration ManagementConfiguration Management

The need to manage ECNs has led to the development of configuration management systems


A product’s planned and changing components are accurately identified and control and accountability for change are identified and maintained

Product LifeProduct Life--Cycle Cycle Management (PLM)Management (PLM)

Integrated software that brings together most, if not all, elements of product design and manufacture

P d t d i


Product designCAD/CAM, DFMAProduct routingMaterialsAssemblyEnvironmental

Service DesignService DesignService typically includes direct interaction with the customer

Increased opportunity for customizationReduced productivity


Cost and quality are still determined at the design stage

Delay customizationModularizationReduce customer interaction, often through automation

Service DesignService Design


Figure 5.12

Service DesignService Design


Figure 5.12

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Moments of TruthMoments of TruthConcept created by Jan Carlzon of Scandinavian AirwaysCritical moments between the customer and the organization that


customer and the organization that determine customer satisfactionThere may be many of these momentsThese are opportunities to gain or lose business

MomentsMoments--ofof--Truth Truth Computer Company HotlineComputer Company Hotline

• The technician was sincerely concerned and apologetic about my problem

• He asked intelligent questions that allowed me

Experience Enhancers

• Only one local number needs to be dialed

• I never get a busy signal

Standard Expectations

• I had to call more than once to get throughA recording spoke to me

Experience Detractors


Figure 5.13

to feel confident in his abilities

• The technician offered various times to have work done to suit my schedule

• Ways to avoid future problems were suggested

Best

• I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem

• A timely resolution to my problem is offered

• The technician is able to explain to me what I can expect to happen next

Better

• A recording spoke to me rather than a person

• While on hold, I get silence, and wonder if I am disconnected

• The technician sounded like he was reading a form of routine questions

• The technician sounded uninterested

• I felt the technician rushed me

Documents for ServicesDocuments for Services

High levels of customer interaction necessitates different documentation


Often explicit job instructions for moments-of-truthScripts and storyboards are other techniques

First Bank Corp. DriveFirst Bank Corp. Drive--up up Teller Service GuidelinesTeller Service Guidelines

Be especially discreet when talking to the customer through the microphone.Provide written instructions for customers who must fill out forms you provide.Mark lines to be completed or attach a note with


Mark lines to be completed or attach a note with instructions.Always say “please” and “thank you” when speaking through the microphone.Establish eye contact with the customer if the distance allows it.If a transaction requires that the customer park the car and come into the lobby, apologize for the inconvenience.

Application of Decision Application of Decision Trees to Product DesignTrees to Product DesignParticularly useful when there are a series of decisions and outcomes which lead to other decisions and


which lead to other decisions and outcomes

Application of Decision Application of Decision Trees to Product DesignTrees to Product Design

1. Include all possible alternatives and states of nature - including “doing

ProceduresProcedures


g gnothing”

2. Enter payoffs at end of branch3. Determine the expected value of

each branch and “prune” the tree to find the alternative with the best expected value

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(.6) Low sales

(.4)

High sales

Decision Tree ExampleDecision Tree ExamplePurchase CAD

Hire and train engineers


(.6)

Low sales

(.4)

High sales

Do nothing

Figure 5.14

(.6) Low sales

(.4)

High sales



$2,500,000 Revenue- 1,000,000 Mfg cost ($40 x 25,000)

- 500,000 CAD cost$1,000,000 Net

$800,000 Revenue- 320,000 Mfg cost ($40 x 8,000)- 500,000 CAD cost- $20,000 Net loss


(.6)

Low sales

(.4)

High sales

Do nothing

Figure 5.14

EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(- $20,000)

(.6) Low sales

(.4)

High sales




- 500,000 CAD cost$1,000,000 Net


$388,000


(.6)

Low sales

(.4)

High sales

Do nothing

Figure 5.14

EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(- $20,000)= $388,000

(.6) Low sales

(.4)

High sales


$388,000

Hire and train engineers$365 000


- 500,000 CAD cost$1,000,000 Net



(.6)

Low sales

(.4)

High sales

$365,000

Do nothing $0

$0 Net

$800,000 Revenue- 400,000 Mfg cost ($50 x 8,000)- 375,000 Hire and train cost

$25,000 Net


- 375,000 Hire and train cost$875,000 Net

Figure 5.14

Transition to ProductionTransition to ProductionKnow when to move to production

Product development can be viewed as evolutionary and never completeProduct must move from design to

d i i i l


production in a timely mannerMost products have a trial production period to insure producibility

Develop tooling, quality control, trainingEnsures successful production

Transition to ProductionTransition to ProductionResponsibility must also transition as the product moves through its life cycle

Line management takes over from designThree common approaches to managing


pp g gtransition

Project managersProduct development teamsIntegrate product development and manufacturing organizations

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