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Subject: Production Management


Topic: Product Design

Fill in the blanks
1. Measuring ones performance against the best-in-class is called _____________.
2. ___________ is a software system that uses computer graphics to assist in the
creation, modification, and analysis of design.
3. __________Is reducing the number of parts, assemblies, or options in a
4. __________Is a new approach to design that involves the simultaneous design
of products and processes by a design team.
5. A __________ can withstand variations in environmental and operating
True or False
6. In general terms, only one in twenty ideas ever become a product.
7. Creating a preliminary design for a new product is part of the last stage of the
feasibility study.
8. The profitability that a product will perform on a given trial is determined by
examining the reliability of the of each component part and using the lowest
9. Standardization refers to reducing the number of parts in a product.
10.One of the risks of standardization is losing the products market advantage
of variety of uniqueness.
11.Concurrent design increases the length of cost of the design process.
12.Taguchi methods for robust design concentrate on quality of conformance
rather than on quality of design.
13.Robust design yields a product or service designed to withstand variations.
14.Superior quality is derived from a robust design.
15.Consistent mistakes are difficult to correct.
16.Taguchi insists that all parts within the tolerances are the same quality.
17.CAD assists in the creation of product design.
18.The ultimate design-to-manufacturing connection is CAD/CAM.
19.The communication aspects of CAD may be more important than its
processing capabilities.
20.The service concept involves creating a service package that includes only
sensual and psychological benefits.

Problem Solving
1. SOM Engineering designs and constructs air conditioning and heating
systems for hospitals and clinics. Currently the companys staff is overloaded
with design work. There is a major design project due in 8 weeks. The penalty
for completing the design late is $14,000 per week, since any delay will cause
the facility to open later than anticipated, and cost the client significant
revenue. If the company uses its inside engineers to complete the design, it
will have to pay them overtime for all work. Page has estimated that it will
cost $12,000 per week (wages and overhead), including late weeks, to have
company engineers complete the design. SOM is also considering having an
outside engineering firm do the design. A bid of $92,000 has been received
for the completed design. Yet another option for completing the design is to
conduct a joint design by having a third engineering company complete all
electromechanical components of the design at a cost of $56,000. Page
would then complete the rest of the design and control systems at an
estimated cost of $30,000.
SOM has estimated the following probabilities of completing the project
within various time frames when using each of the three options. Those
estimates are shown in the following table:
Probability of Completing the Design
Internal Engineers
--External Engineers
Joint Design


What is the best decision base on an expected monetary value criterion? (Note:
You want the lowest EMV because we are dealing with costs in this problem.)