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3. In general, the designs of both goods and services follow a similar path. The critical
differences lie in the detailed product and process design phases.
4. The design of a service cannot be done independently from the “process” by which the
service is delivered.
5. The process by which a service is created and delivered is, in essence, the service itself.
6. The design of a manufactured good focuses primarily on its physical characteristics.
7. Prototype testing is an important step in the initial choice of a customer benefit package.
8. Service design must be addressed from two perspectives—the service delivery system and
the service encounter.
9. Quality function deployment (QFD) is focused primarily on developing a viable quality
control plan.
10. Customer requirements that are expressed in a customer’s own words are called the
“voice of the customer.”
11. The roof of the House of Quality shows the relationship matrix structure between the
voice of the customer and the technical features.
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12. The bottom of the House of Quality shows the interrelationships between any pair of
technical features.
13. Japan’s Genichi Taguchi argued that any variation within the specification limits is equally
good in terms of quality and long-run cost.
14. Suppose that a manufacturing specification of a dimension is 1.0 ± 0.05. The permissible
range of variation from 0.95 to 1.05 is called the tolerance.
15. The goal-post model of conforming to specifications by specifying a nominal dimension
and a tolerance is the basis for calculating the Taguchi loss function.
16. In the Taguchi loss function, as one deviates further from the target value, the loss
increases in a linear fashion.
17. Reliability is formally expressed as a probability between 0 and 1.
18. Reliability does not apply to service processes.
19. To find the reliability of a complex system, one must first convert the parallel components
into equivalent series components.
20. While improving reliability by adding redundant components, the costs decrease.
21. A parallel system has no redundancy.
22. The simpler the product design, the better the chance of high process efficiency.
23. One way of ensuring design for manufacturability (DFM) is through product simplification.
24. Design for manufacturability (DFM) includes practices such as designing for recycling and
disassembly.
25. A service-encounter design focuses on the interaction, directly and indirectly, between the
service provider(s) and a customer.
26. In designing a service-delivery system, a good job and process design can usually overcome
a poor location.
27. The servicescape refers to the place where a service is located.
28. A kiosk at an airport that allows passengers to check their baggage would be an example of
a lean servicescape environment.
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29. Estate planning is an example of a low-contact system.
30. Package sorting is an example of a low-contact system.
31. Low-customer-contact areas of an organization are sometimes described as the “front
room or front office.”
32. Customer-contact requirements might be either technical or behavioral in nature.
33. Service guarantees are offered after a customer experiences a service.
34. Ensuring that a hotel staff at the front desk addresses a guest by name is an example of a
servicescape requirement.
35. Service recovery is the process of correcting a service upset and satisfying a customer.
36. Implicit service guarantees are always in writing.
37. The customer benefit package at LensCrafters is weighted more toward the primary good,
which is eyewear.
Case Study Questions (To reward students who attend class, listen and learn, and take good
class notes on the case discussion and/or student team presentation.)
1. Which of the following statements in Tom’s Auto Service case study is TRUE?
a. The customer survey results indicate the facilities were in disrepair and not so
clean.
b. The customer survey results indicate the employees needed more (better)
service management training.
c. The reliability of the service-delivery system was computed in class to be 92.5
percent.
d. The customer survey results indicate the servicescape was in disrepair and not
well designed.
Problems for Manual Grading, Take-Home Exams and Partial Credit (Also, review the OM
Instructor’s Manual for end–of-chapter questions/problems)
1. Summarize the process of designing goods and services, and explain where the process
differs between goods and services.
2. Explain the concept of quality function deployment (QFD). What is the final step in building
a House of Quality?
3. Describe the Taguchi loss function. Contrast it to the goal-post model.
4. Explain the concept of reliability.
5. Describe the market introduction/deployment step of an integrated framework for goods
and service design.
6. Explain the concept of Design for Manufacturability (DFM).
7. Discuss the concept of Design for Environment (DfE).
8. A critical part has a manufacturing specification of 0.315 cm ± 0.010. If this measurement is
larger than 0.325 or smaller than 0.305, the product fails at a cost of $130. Determine the
Taguchi loss function.
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9. Assume the specifications for a part (in inches) are 4.00 ± 0.37, and the Taguchi loss
function is estimated to be L(x) = 8,300 (x − T)2. Determine the estimated loss if the quality
characteristic under study takes on a value of 4.50 inches.
10. A quality characteristic has a specification (in cm) of 0.400 ± 0.03. If the value of the quality
characteristic exceeds 0.400 by the tolerance of 0.030 on either side, the product will require
a $180.00 repair. What is the appropriate Taguchi loss function?
11. A quality characteristic has a manufacturing specification (in cm) of 0.100 ± 0.05. Historical
data indicate that if the quality characteristic takes on values larger than 0.15 cm or smaller
than 0.05 cm, the product fails and a cost of $65 is incurred. Based on this data, answer the
questions below.
a.
b.
b.
12. The manufacture of a product requires five sequential steps. The reliability of each of the
steps is 0.97, 0.88, 0.95, 0.92, and 0.98, respectively. What is the reliability of the
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manufacturing process (system)?
13. An ATM machine provides four sequential steps in processing a transaction. Over the last
quarter, the reliability of each of these steps was 0.92, 0.97, 0.95, and 0.96. What is the overall
reliability of the machine? How much can reliability be improved if the reliability of the fourth
step is increased to 0.99?
14. In a two-component parallel system, the overall reliability is 0.9984. If the reliability of the
first component is 0.9880, determine the reliability of the second component.
15. The system reliability for a three-component series system is 0.70. If the individual
reliabilities of two of the components are 0.96 and 0.93, determine the reliability of the third
component.
16. Given the diagram below, determine the system reliability based on the individual
component reliabilities: A = 0.94, B = 0.92, C = 0.96, and D = 0.95.
A
B
C
D
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17. Determine the system reliability if the individual component reliabilities are A = 0.92, B =
0.94, C = 0.95, D = 0.80, and E = 0.86, where A, B, and C are series components, D and E are
parallel components.
18. An analysis of the current mortgage loan process found that the overall system reliability
of a part of the total process consisting of three stages was low. After much analysis, the
process manager decided to add redundancy to this part of the process. So, clerks A and B
checked one another’s work as well as clerks C and D in the new process. Consider each pair to
be parallel. A study found that all clerks performed at an average reliability of 0.85. What is
the reliability of the new process with more redundancy?
19. What is the system reliability if components A and B were redundant parts providing the
same function in parallel with a reliability of 0.82, and components C and D were also
redundant parts with reliability of 0.95?
20. A ground wave radar unit developed by a defense contractor has four critical components.
If any one component should fail, the radar unit would be rendered ineffective. The
component reliabilities are 0.982, 0.946, 0.913, and 0.969 respectively. Based on this data,
answer the questions below.
a.
What is the system reliability?
b.
If the reliability of the third component is changed from 0.913 to 0.950, what does the
system reliability become?
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c.
If the company decides to build in system redundancy for the third component, what
does the third component’s reliability become?
d.
What is the system reliability with redundancy for the third component?
21. A company is developing a new rocket for NASA and is concerned about the reliability of
the fuel pump system. The fuel pump system has four fuel pumps (none are redundant), each
with a failure probability of 0.001 over a two-hour period. Based on this data, answer the
questions below.
a.
b.
22. To create and deliver a service, four steps are required and based on collecting
information on errors per step, the following reliabilities have been determined: Step 1 = 0.92,
Step 2 = 0.88, Step 3 = 0.94, and Step 4 = 0.84. What is the reliability of the total service
system?
23. Discuss the concept of servicescape.
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24. Briefly describe any four elements of a service-delivery system.
25. Explain service-encounter design. List the principal issues of service-encounter design.
26. What is customer contact? Differentiate between high-customer-contact systems and low-
customer-contact systems. Provide examples of each.
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27. Explain the importance of service recovery.