Class 3

Question 1

Define: Manufacturability

Answer 1

an ease of fabrication and/or assembly and an important determinator of cost, productivity, and qaulity

Question 2

Define: Standardization

Answer 2

the extent to which there is an absence of variety in a product or service

Question 3

Define: Reliability

Answer 3

The ability of a product, part, or system to perform its intended function under a prescribed set of conditions

Question 4

Define: Capacity

Answer 4

The upper limit or ceiling on the load that an operating unit can handle

Question 5

Define: Robust Design

Answer 5

Design that results in products or services that can function over a broad range of conditions

Question 6

Describe Quality Function Deployment (QFD)

Answer 6

A design approach intended to integrate the “voice of the customer” into the product and service development process

Question 7

Describe the product life cycle

Answer 7

• changing demand
• changing support requirements
• incubation ->growth ->maturity ->saturation -> decline

Question 8

Define: Mass Customization

Answer 8

A strategy of producing standardized goods or services, but incorporating some degree of customization

Question 9

Define: Delayed Differentiation

Answer 9

Producing but not quite completing a product or service until customer preferences or specifications are known

Question 10

Define: Modular design. What does it allow?

Answer 10

component parts are subdivided into modules that are easily replaced or interchanged. It allows:

• easier diagnosis and remedy of failures
• easier repair and replacement
• simplification or manufacturing and assembly
• some degree of post-manufacture customization

Question 11

Describe payoff tables

Answer 11

payoff tables list estimated payoff associated with each decision alternative and each possible future outcome

Question 12

What’s a decision tree?

Answer 12

A schematic representation of decision variables, random variables, and their payoffs

Question 13

Define Expected Value of PErfect Information (EVPI)

Answer 13

the difference between the expected payoff with perfect information and the expected payoff under risk

Question 14

What is the EVPI equation?

Answer 14

EVPI= (expected payoff under certainty) - (Expected payoff under risk)

Question 15

Define: Sensitivity analysis

Answer 15

A process for determining the range of probability for which an alternative has the best expected payoff

Question 16

What is the difference between “design capacity”, “effective capacity”, and “actual output”?

Answer 16

Design capacity- the maximum output rate or service capacity an operation, process, or facility is designed for
Effective Capacity- Design capacity minus allowances such as personal time, maintenance, and scrap
Actual Output- rate of output actually achieved

Question 17

list 6 phases in product/service design

Answer 17

1) idea generation
2) build a business case
3) identify and apply
4) design the product
5) launch
6) follow up

Question 18

list 4 key issues for design

Answer 18

1) responsive
2) customer-focused
3) forward-looking
4) time to market

Question 19

list 4 sources for design ideas with examples

Answer 19

1) Employees ex R&D, marketing
2) Customers ex focus groups
3) Competitors ex reverse engineering
4) Suppliers ex supply chain process partners

Question 20

list 6 major design issues with examples

Answer 20

1) Manufacturability- the ease of fabrication and/or assembly. An important determinator of cost, productivity, quality
ex. design for manufacturing, design for operations
2) Design Guidelines - products should be consistent with the goals and image of the company, give value, address/avoid health and safety concerns, avoid potential harm to the environment
3) Legal, Ethical, and Environmental
4) Product/service life cycles
5) Standardization - the extent to which there is an absence of variety in a product or service
6) Reliability - the ability of a product, part or system to preform its intended function under a prescribed set of conditions

Question 21

5 major advantages of standardization

Answer 21

• improved availability, more orders filled from inventory
• decreased inventory and manufacturing
• simplified forecasting and scheduling
• opportunities for long production runs and automation
• reduced design, training, handling costs

Question 22

3 major disadvantages of standardization

Answer 22

• designs may be frozen with too many imperfections remaining
• high cost of design changes increases resistance to improvements
• decreased variety results in less consumer appeal

Question 23

5 alternatives to capacity expansion in addressing capacity limitations

Answer 23

1) Make vs Buy
2) Design growth/flexibility into initial system design
3) For seasonal products consider development of complementary product or market vs simple growth of original product
4) Balance product mix by life cycle
5) Consider demand management

Question 24

What is the equation for: Efficiency?

Answer 24

Efficiency = Actual output/Effective capacity

Question 25

What is the equation for Utilization?

Answer 25

Utilization = Actual output/Design capacity

Question 26

What is the equation for Break Even Point?

Answer 26

RQ = Fixed costs + variable costs
Qbep = Fixed Cost/(Revenue - Variable Cost)

Question 27

What is the equation for quantity required for profit p?

Answer 27

quantity required for profit p = (profit + fixed cost)/ (Revenue - Variable cost)

Question 28

What is the equation for Expected Value of Perfect Information? EVPI

Answer 28

EVPI = (Expected payoff under certainty) - (Expected payoff under risk)

Question 29

Car wash open 10hr/day, 6 days/week and can theoretically was an avg of 10car/hr but loses 4hr/week to equipment maintenance and an avg of 1hr/day due to employee absenteeism. Calculate Efficiency and utilization.

Answer 29

Design capacity = 10car/hr X 6days/week = 600cars/week
Effective capacity = 600 cars/week - (4hr/week X 10cars/hr) = 600 - 40 = 500cars/week
Actual output = 560 cars/week - (1hr/day X 6days/week X 10cars/hr) = 560 - 60 = 500cars/week
Efficiency = Actual/effective = 500/560 = 89.3%
Utilization = Actual/design = 500/600 = 83.3%

Question 30

For an item with FC=$100,000 R=$25 V=$15, what is the BEP and what is the required output for a profit of $1000?

Answer 30

BEP = fixed costs/revenue-variable costs
=100,000/(25-15) = 10,000
Required Output = (profit + fixed costs)/(Revenue - Variable costs) = (1000+100,000)/(25-15) = 10,100

Question 31

Decsion analysis

Answer 31

look at last page of class 3 review