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7) The hierarchy of components, their description, and the quantity of each required to make one unit of a
product are documented on:
A) a group technology listing.
B) a route sheet.
C) a bill of material.
D) an engineering drawing.
E) a work order.
8) Group technology requires that:
A) each component be identified by a coding scheme that specifies size, shape, and the type of
processing.
B) a specific series of engineering drawings be prepared.
C) all bills of material be prepared using the same format.
D) engineering change notices be linked to each of the bills of material and engineering notices.
E) the final products be standardized.
9) A drawing that shows the dimensions, tolerances, materials, and finishes of a component is a(n)
________.
10) A listing of the hierarchy of components, their description, and the quantity of each required to make
one unit of product is the ________.
Section 7 Documents for Production
1) A work order is a list of the hierarchy of components, their description, and the quantity of each
required to make one unit of the product.
2) An assembly drawing lists the operations necessary to produce the component.
3) An assembly chart shows an exploded view of the product, usually a three-dimensional or isometric
drawing.
4) Which of the following shows in schematic form how a product is assembled?
A) an engineering drawing
B) an assembly routing
C) an assembly chart
D) a route sheet
E) a process sheet
5) A route sheet provides a(n):
A) exploded view of the product.
B) instruction to make a given quantity of a particular item.
C) schematic showing how the product is assembled.
D) sequence of operations necessary to produce the component.
E) set of detailed instructions about how to perform a task.
6) An assembly drawing:
A) shows, in schematic form, how the product is assembled.
B) shows an exploded view of the product.
C) lists the operations, including assembly and inspection, necessary to produce the component with the
material specified in the bill of material.
D) provides detailed instructions on how to perform a given task.
E) describes the dimensions and finish of each component.
7) An assembly chart:
A) shows graphically how the product is assembled.
B) shows an exploded view of the product.
C) lists the operations, including assembly and inspection, necessary to produce the component with the
material specified in the bill of material.
D) provides detailed instructions on how to perform a given task.
E) describes the dimensions and finish of each component.
8) A process sheet is a type of:
A) assembly drawing.
B) assembly chart.
C) route sheet.
D) work order.
E) bill of material.
9) Which of the following documents lists the operations necessary to produce the component with the
material specified in the bill of material?
A) an engineering drawing
B) an assembly drawing
C) a route sheet
D) an assembly chart
E) an operations chart
10) A restaurant kitchen contains a wall poster that shows, for each sandwich on the menu, a sketch of the
ingredients and how they are arranged to make the sandwich. This is an example of a(n):
A) assembly drawing.
B) route sheet.
C) bill of material.
D) work order.
E) assembly chart.
11) A document for production that gives the instruction to make a given quantity of a particular item,
usually to a given schedule, is a(n):
A) work order.
B) route sheet.
C) bill of information.
D) assembly chart.
E) value analysis.
12) An exploded view of the product is a(n) ________.
13) How does configuration management manifest itself when you ask for service on your automobile?
14) Briefly explain how product life-cycle management (PLM) impacts product design.
Section 8 Service Design
1) The customer may participate in the design of, and in the delivery of, services.
2) The moment-of-truth is the crucial moment between the service provider and the customer that
exemplifies, enhances, or detracts from the customer's expectations.
3) According to PCN analysis, the consumer's process domain typically includes the set of activities at the
beginning of the process chain.
4) According to PCN analysis, firms intending to provide a value offering that focuses on customization
should be positioned more toward the consumer's process domain.
5) Which of the following is NOT a service design technique used to increase service efficiency?
A) increase customer interaction
B) delay customization
C) automation
D) modularization
E) limit the options
6) What type of analysis focuses on the ways in which processes can be designed to optimize interaction
between firms and their customers?
A) PCN
B) BOM
C) OI
D) DFMA
E) PLM
7) According to PCN analysis, service operations exist only within the area(s) of:
A) independent processing.
B) independent processing and surrogate interaction.
C) independent processing and direct interaction.
D) surrogate interaction and direct interaction.
E) independent processing, surrogate interaction, and direct interaction.
8) According to PCN analysis, which process region includes process steps in which one participant is
acting on another participant's resources, such as their information, materials, or technologies?
A) independent processing
B) surrogate interaction
C) direct interaction
D) resource processing
E) process domain interaction
9) The ________ is the crucial moment between the service provider and the customer that exemplifies,
enhances, or detracts from the customer's expectations.
10) Within PCN analysis, a(n) ________ is a sequence of steps that accomplishes an identifiable purpose
(of providing value to process participants).
11) Identify the methods of service design that can increase service efficiency and limit customer
interaction.
12) Identify and briefly describe the three process regions from PCN analysis.
Section 9 Application of Decision Trees to Product Design
1) The expected value of each course of action in a decision tree is determined by starting at the beginning
of the tree (the left-hand side) and working toward the end of the tree (the right).
2) The role of decision trees in product design is to:
A) rank products in descending order of their dollar contribution to the firm.
B) better understand the customers' wants.
C) calculate the expected value of each course of action.
D) calculate the value of quality function deployment.
E) calculate the value of the moment of truth.
3) Payoffs, alternatives, and expected monetary values are terms associated with:
A) virtual reality.
B) product life-cycle management.
C) quality function deployment.
D) decision trees.
E) make-or-buy analysis.
4) In analyzing product design decisions, decision trees determine the ________ of each course of action.
5) JDI, Inc. is trying to decide whether to make or buy a part (#J-45FPT). Purchasing the part would cost
$1.50 each. If they design and produce it themselves, it will result in a per unit cost of $0.75. However, the
design investment would be $50,000. Further, they realize that for this type of part, there is a 30% chance
that the part will need to be redesigned at an additional cost of $50,000. Regardless of whether they make
or buy the part, JDI will need 100,000 of these parts. Using decision trees analysis and EMV, what should
JDI do? Show the decision tree.
6) Tri-products is trying to decide whether to make or buy an accessory item for one of their products. It
is projected that this item will sell for $10 each. If the item is outsourced, there is virtually no cost other
than the $6 per unit that they would pay their supplier. Internally, they have two choices. Process A
requires an investment of $120,000 for design and equipment, but results in a $4 per unit cost. Process B
requires only a $100,000 investment, but its per unit cost is $5. Regardless of whether the item is
subcontracted or produced internally, there is a 50% chance that they will sell 50,000 units, and a 50%
chance that they will sell 100,000 units. Draw the decision tree appropriate to the alternatives and
outcomes stated. Using the decision tree and EMV, what is their best choice?
7) A company manufactures specialty pollution-sensing devices for the offshore oil industry. One
particular device has reached maturity, and the company is considering whether to replace it with a
newer model. Technologies have not changed dramatically, so the new device would have similar
functionality to the existing one, but would be smaller and lighter in weight. The firm's three choices are:
(1) keep the old model, (2) design a replacement device with internal resources, (3) and purchase a new
design from a firm that is one of its suppliers. The market for these devices will be either "receptive" or
"neutral" of the replacement model. The financial estimates are as follows: Keeping the old design will
yield a profit of $6 million dollars. Designing the replacement internally will yield $10 million if the
market is "receptive," but a $3 million loss if the market is "neutral." Acquiring the new design from the
supplier will profit $4 million under "receptive," $1 million under "neutral." The company feels that the
market has a 70 percent chance of being "receptive" and a 30 percent chance of being "neutral." Draw the
appropriate decision tree. Calculate expected value for all courses of action. What action yields the
highest expected value?
8) A swim club is designing a new pool to replace its old pool. The new pool would need to last for 10
years since the club is planning on relocating after 10 years. A concrete shell would cost $100,000 and last
for all 10 years. Another option is to install a vinyl liner that would cost only $75,000 to install. However,
the vinyl is not guaranteed to last for all 10 years, and it has a 33% chance of breaking down. Repair of the
vinyl would cost $40,000 and would extend the life of the vinyl liner to the 10-year mark. If both options
are acceptable to the swim club, which one minimizes their cost?
9) A company producing apps for a social networking site is deciding which path to pursue. The first is to
create an app that has universal appeal but faces a crowded market. This app, A, would have sales of
100,000 copies at $1 each under ideal conditions, but under tough conditions would have sales of only
60,000 copies at $.80 each. The other app, B, would have sales of 500,000 units at $.50 each under ideal
conditions but sales would be reduced to 10,000 units at $.50 each under tough conditions. If ideal and
rough conditions occur with the same frequency, which app should the company produce? Note: both
apps cost the same amount to develop.
10) A company is deciding if it should design an advertising system for use on Twitter©. The first option
is to skip out on designing, with no net costs or gains. The second option is System A, which would result
in additional sales of either $50,000 under good conditions or $10,000 under bad conditions. The final
choice is System B, which would increase sales by $20,000 under both good and bad conditions. Suppose
that good conditions are twice as likely as bad conditions. Which option should the company pursue if
developing a system costs $25,000?
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11) A company looking for venture capitalist funding is deciding on the design of its operating system
(OS) for its new phone. The first option is to simply buy the OS from another company. This would result
in sales of either 10,000 units if the market is not crowded with similar phones, or sales of only 3,000 units
if the market is crowded. If the company decides to design its own OS, the phone would have sales of
70,000 units if the OS was popular, but sales of only 2,000 if the OS was a failure. Suppose that to recoup
the cost of designing their own OS the company would need to sell twice as many phones as when they
simply buy the OS for the profit from the scenarios to be equal. Which option should the company choose
if the probability that the market is crowded is 50% and the probability that the OS is popular is 75%?
12) A company is deciding if it should design a product in-house or outsource the design. If outsourced,
the cost for a low bidder would be $40,000, and the cost for an expensive bidder would be $100,000. To
design in-house would require overtime for an already stretched design team with total costs of $70,000.
If all three designs (in-house, low bid, high bid) are equal in quality and the likelihood of finding a low
bidder is 60% (meaning that 40% of the time the firm will have to hire the expensive bidder), should the
company outsource design or do it in-house?
Section 10 Transition to Production
1) Transition to production refers to the act of moving a product to production from what?
A) inventory
B) the supplier
C) the market
D) development
E) the wholesaler
