OM 300 Test 2

OM 300 Test 2 - OM 300 Test 1 Chapter 3 Learning Objectives...

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OM 300 Test 1: Chapter 3 Learning Objectives Define product design and its strategic impact on organization Describe steps to develop a product design Using break-even analysis as a tool in selecting between alternative products Identity different types of processes and explain their characteristics Understand how to use a process flowchart Understand how to use process performance metrics Understand current technology advancements and how they impact process and product design Understand issues impacting the design of service operations Product Design Product design – the process of defining all of the companies product characteristics o Product design must supp0ort product manufacturability (the ease with which a product can be made) o Product design defines a product’s characteristics of; appearance, materials, dimensions, tolerances, and performance standards Design of Services versus Goods Service design is unique in that the service and entire service concept are being designed o must define both the service and concept - e.g. promptness, friendliness, ambiance o Product and service design must match the needs and preferences of the targeted customer group Product design and process selection affects o Product quality o Product cost o Customer satisfaction o Overall manufacturability – the ease with which the product can be made The Product Design Process Step 1 - Idea Development
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o Someone thinks of a need and a product/service design to satisfy it o e.g. customers, marketing, engineering, competitors, benchmarking, reverse engineering Step 2 - Product Screening o Every business needs a formal/structured evaluation process o e.g. fit with facility and labor skills, size of market, contribution margin, break-even analysis, return on sales Step 3 – Preliminary Design and Testing o Technical specifications are developed, prototypes built, testing starts Step 4 – Final Design o Final design based on test results, facility, equipment, material, & labor, skills defined, suppliers identified Product Screening Tool – Break-Even Analysis Computes the quantity of goods company needs to sell to cover its costs Q BE = F/ (SP - VC) o Q BE – Break even quantity o F – Fixed costs o SP – selling price/unit o VC – Variable cost Break-even analysis also includes calculating o Total cost – sum of fixed and variable cost Total cost = F + (VC)*Q o Revenue – amount of money brought in from sales Revenue = (SP) * Q Q = number of units sold Break-Even Analysis: Graphical Approach Compute quantity of goods that must be sold to break-even Compute total revenue at an assumed selling price Compute fixed cost and variable cost for several quantities Plot the total revenue line and the total cost line
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OM 300 Test 2 - OM 300 Test 1 Chapter 3 Learning Objectives...

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