Operations Management, 11e (Heizer/Render)
Chapter 5 Design of Goods and Services
Section 1 Goods and Services Selection
1) Regal Marine’s attempts to keep in touch with customers and respond to the marketplace are made
impossible because consumer tastes change and maritime engineering improves.
2) Product strategy may focus on developing a competitive advantage via differentiation, low cost, rapid
response, or a combination of these.
3) The objective of the product decision is to develop and implement a product strategy that meets the
demands of the marketplace with a competitive advantage.
4) The four phases of the product life cycle are incubation, introduction, growth, and decline.
5) In the maturity stage of the product life cycle, operations managers will be particularly concerned with
adding capacity or enhancing existing capacity to accommodate the increase in product demand.
6) Relatively few new product ideas, perhaps only 1 in 250, become successfully marketed products.
7) 3M’s goal is to produce 30% of its profit from products introduced in the last 4 years.
8) Which of these statements regarding Regal Marine is TRUE?
A) Product design is a critical decision for the firm.
B) Regal uses a three-dimensional CAD system to shorten product development time.
C) Regal still uses some wooden parts and hand-produces some components.
D) Regal’s use of CAD has resulted in a superior product.
E) All of the above are true.
9) Regal Marine:
A) no longer builds boats with any wooden parts.
B) has replaced all human labor with robots.
C) treats the product design decision as critical to its success.
D) gets its competitive advantage by being the low-cost producer of boats designed by others.
E) designs several new boats each year, but contracts other firms for their manufacture.
10) The three major elements of the product decision are:
A) selection, definition, and design.
B) goods, services, and hybrids.
C) strategy, tactics, and operations.
D) cost, differentiation, and speed of response.
E) legislative, judicial, and executive.
11) In which stage of the product life cycle should product strategy focus on process modifications as the
product is being “fine-tuned” for the market?
A) introduction
B) growth
C) maturity
D) decline
E) incubation
12) A product’s life cycle is divided into four stages, which are:
A) introduction, growth, saturation, and maturity.
B) introduction, growth, stability, and decline.
C) introduction, maturity, saturation, and decline.
D) introduction, growth, maturity, and decline.
E) incubation, growth, maturity, and decline.
13) When should product strategy focus on forecasting capacity requirements?
A) at the introduction stage of the product life cycle
B) at the growth stage of the product life cycle
C) at the maturity stage of the product life cycle
D) at the decline stage of the product life cycle
E) at the saturation stage of the product life cycle
14) The analysis tool that lists products in descending order of their individual dollar contribution to the
firm is:
A) decision tree analysis.
B) Pareto analysis.
C) breakeven analysis.
D) product-by-value analysis.
E) product life cycle analysis.
15) At which stage of the product life cycle is product strategy likely to focus on improved cost control?
A) introduction
B) growth
C) maturity
D) saturation
E) inflation
16) ________ is used to rank a company’s products to determine which products represent the best use of
the firm’s resources, or, perhaps, to determine which products are to be eliminated.
A) Value analysis
B) Value engineering
C) Financial analysis
D) Product-by-value analysis
E) Product cost justification
17) What percentage of sales from new products is indicative of industry leaders?
A) 50%
B) 7.5%
C) 10 to 15%
D) above 75%
E) 20 to 25%
18) Regal Marine’s use of ________ has reduced product development time and reduced problems with
tooling and production.
19) In the ________ phase of the product life cycle, the product design has begun to stabilize.
20) ________ lists products in descending order of the individual dollar contribution to the firm.
21) What is the objective of the product decision?
22) What is a product-by-value analysis, and what type of decisions does it help managers make?
23) “With respect to the product decision, managers must be able to accept risk and tolerate failure.”
Comment on why this is a necessary hazard in making new product decisions, given all the powerful
tools and carefully built systems that support that decision.
24) Is it possible for a product’s life cycle stage to affect its product strategy? In particular, describe how
one product in growth and another in maturity might have different product strategies.
Section 2 Generating New Products
1) Operations managers must be able to anticipate changes in which of the following?
A) product mix
B) product opportunities
C) the products themselves
D) product volume
E) all of the above
2) Which of the following would likely cause a change in market opportunities based upon levels of
income and wealth?
A) economic change
B) sociological and demographic change
C) technological change
D) political change
E) legal change
3) Which of the following represents an opportunity for generating a new product?
A) understanding the customer
B) demographic change, such as decreasing family size
C) changes in professional standards
D) economic change, such as rising household incomes
E) All of the above are such opportunities.
4) Identify factors that influence new product opportunities.
5) Provide some examples of recent product changes, i.e. new products that are replacing older ones.
6) Aggressive new product development requires that organizations build structures internally that
contain what features?
Section 3 Product Development
1) Quality function deployment refers to both (1) determining what will satisfy the customer and
(2) translating those customer desires into a target design.
2) Which of the following is true regarding value engineering?
A) Value engineering occurs only after the product is selected and designed.
B) Value engineering creates fragile design.
C) Value engineering is oriented toward improvement of design.
D) Value engineering occurs during production when it is clear the product is a success.
E) Value engineering can save substantial amounts of product cost, but quality suffers.
3) Reducing the complexity of a product and improving a product’s maintainability are activities of:
A) product lifecycle management (PLM).
B) product-by-value analysis.
C) manufacturability and value engineering.
D) organizing for product development.
E) design for destruction (DFD).
4) Quality function deployment (QFD):
A) determines what will satisfy the customer.
B) translates customer desires into the target design.
C) is used early in the design process.
D) is used to determine where to deploy quality efforts.
E) all of the above
5) A graphic technique for defining the relationship between customer desires and product (or service) is:
A) product lifecycle management.
B) the house of quality.
C) the moment of truth.
D) the assembly drawing.
E) modular design.
6) A result of concurrent engineering in product design is:
A) speedier product development.
B) lower quality.
C) less customer demand.
D) higher costs.
E) all of the above.
7) The Japanese method of organizing for product design features:
A) teams.
B) product managers (champions).
C) distinct departments with assigned tasks.
D) a single organization without subdivision or individual teams.
E) none of the above.
8) Manufacturability and value engineering has which of the following benefits?
I. Reduced complexity of the product
II. Reduction of environmental impact
III. Additional standardization of components
IV. Robust design
V. Improved job design and safety
A) I, III, V
B) II, IV
C) I, III, IV
D) IV
E) I, II, III, IV, V
9) ________ is a process for determining customer requirements and translating them into attributes that
each functional area can understand and act upon.
10) The ________ is a part of the quality function deployment process that utilizes a planning matrix to
relate customer “wants” to “how” the firm is going to meet those “wants.”
11) Identify the benefits associated with manufacturability and value engineering.
12) What is quality function deployment (QFD)?
13) Identify the 7 steps involved in building the house of quality.
Section 4 Issues for Product Design
1) Computer-aided design (CAD) refers to the use of specialized computer programs to direct and control
manufacturing equipment.
2) Robust design ensures that small variations in production or assembly do not adversely affect the
product.
3) Modular design exists only in tangible products; it makes no sense in services.
4) Which of the following is TRUE regarding computer–aided design?
A) It is too expensive to use in most manufacturing and design settings.
B) It is an obsolete technology.
C) It results in longer development cycles for virtually all products.
D) It is the use of computers to interactively design products and prepare engineering documentation.
E) It is the use of information technology to control machinery.
5) Which of the following is TRUE concerning advantages of CAD?
A) It provides accurate information flows to other departments.
B) Most product costs are determined at the design stage.
C) Design options are easier to review before final commitments are made.
D) Virtually all products have their development cycle shortened.
E) All of the above are true.
6) What is the use of information technology to control machinery?
A) CAM
B) CAD
C) QFD
D) DFMA
E) STEP
7) Bridget’s Hamburger Stand uses only 7 ingredients but offers 15 different burgers. This process is
known as:
A) Robust design.
B) QFD.
C) Modular design.
D) CAD.
E) Value analysis.
8) Value analysis takes place:
A) when the product is selected and designed.
B) during the initial stages of production when something needs to be done to assure product success.
C) when the product is first conceived.
D) during the production process when it is clear that the new product is a success.
E) when the product cost is very low.
9) What technology “builds” products by laying down successive thin layers of plastic, metal, glass, or
ceramics?
A) CAM
B) STEP
C) 3-D printing
D) replicator
E) virtual reality
10) ________ provides a format allowing the electronic transmittal of three–dimensional data.
11) The use of information technology to control machinery is called ________.
12) If a design can be produced to requirements even when the production process has unfavorable
conditions, the design is said to be ________.
13) Products or services designed in easily segmented components are known as ________ designs.
14) ________ reviews successful products for improvement during the production process.
15) Identify at least three general benefits derived from CAD.
16) Explain the difference between value analysis and value engineering.
17) Discuss the advisability of using modular assemblies in manufacturing. (What are the advantages and
disadvantages?) To what extent can these arguments be applied to service products?
Section 5 Product Development Continuum
1) Rapidly developing products and moving them to the market is part of time-based competition.
2) The enhancement of existing products is an external product development strategy.
3) Boeing’s 737 airplane and Hewlett-Packard’s printer business are examples of using enhancements and
migrations of existing products to build on a ________.
A) product template
B) product pulpit
C) product platform
D) product dais
E) product foundation
4) Which of the following is an example of an external product development strategy?
A) new internally developed products
B) enhancements to existing products
C) alliances
D) migrations of existing products
E) All of the above are examples of internal product development strategy.
5) Which of the following product development strategies has the highest product development risk?
A) acquiring the developer
B) alliances
C) joint ventures
D) new internally developed products
E) purchasing technology
6) Rapidly developing products and moving them to the market is referred to as ________.
7) Boeing’s 737 airplane and Hewlett-Packard’s printer business are examples of using enhancements and
migrations of existing products to build on a(n) ________.
8) What is time-based competition?
9) Identify the external product development strategies; describe each in a sentence or two.
Section 6 Defining a Product
1) The “make-or-buy” decision distinguishes between what an organization chooses to produce and what
it chooses to purchase from suppliers.
2) Group technology enables the grouping of parts into families based on similar processing
requirements.
3) An engineering drawing shows the:
A) dimensions, tolerances, materials, and finishes of a component.
B) dimensions, tolerances, cost, and sales or use volume of a component.
C) materials, finishes, machining operations, and dimensions of a component.
D) cost, materials, tolerances, and lead-time for a component.
E) cost, dimensions, and machining operations for a component.
4) The dimensions, tolerances, materials, and finishes of a component are typically shown on a(n):
A) assembly chart.
B) engineering drawing.
C) bill of material.
D) assembly drawing.
E) route sheet.
5) What identifies components by a coding scheme that specifies size, shape, and the type of processing
(such as size)?
A) engineering drawing
B) group technology
C) bill of material
D) assembly drawing
E) assembly chart
6) Which of the following typically shows the hierarchy of components, their description, and the
quantity of each required to make one unit of a product?
A) an engineering drawing
B) an assembly drawing
C) a bill of material
D) an assembly chart
E) a route sheet