Design of Goods and Services
Problem 1:
You wish to compete in the super premium ice cream market. The task is to determine the wants of the super premium market and the attributes/hows to be met by their firm. Use the house of quality concept. Market research has revealed that customers feel four factors are significant in making a buying decision. A “rich” taste is most important followed by smooth texture, distinct flavor, and a sweet taste. From a production standpoint, important factors are the sugar content, the amount of butterfat, low air content, and natural flavors.
Problem 2:
Prepare a bill-of-material for a ham and cheese sandwich.
Problem 3:
Prepare an assembly chart for a ham and cheese sandwich.
Problem 4:
Michael’s Engineering, Inc. manufactures components for the ever-changing notebook computer business. He is considering moving from a small custom design facility to an operation capable of much more rapid design of components. This means that Michael must consider upgrading his CAD equipment.
Option 1 is to purchase two new desktop CAD systems at $100,000 each.
Option 2 is to purchase an integrated system and the related server at $500,000. Michael’s sales manager has estimated that if the market for notebook computers continues to expand, sales over the life of either system will be $1,000,000. He places the odds of this happening at 40%. He thinks the likelihood of the market having already peaked to be 60% and future sales to be only $700,000. What do you suggest Michael do and what is the EMV of this decision?
Process Strategy
Problem 1:
Jackson Custom Machine Shop has a contract for 130,000 units of a new product. Sam Jumper, the owner, has calculated the cost for three process alternatives. Fixed costs will be: for general-purpose equipment (GPE), $150,000; flexible manufacturing (FMS), $350,000; and dedicated automation (DA), $950,000. Variable costs will be: GPE, $10; FMS, $8; and DA, $6. Which should he choose?
Problem 2:
Solve Problem 1 graphically Problem 3: Using either your analytical solution found in Problem 1, or the graphical solution found in Problem 2, identify the volume ranges where each process should be used. Problem 4: If Jackson Custom Machine is able to convince the customer to renew the contract for another one or two years, what implications does this have for his decision?