Assignment Day 4 Question 5. 9 Prepare a product-by-value analysis for the following products, and given the position in its life cycle, identify the issues likely to confront the operations manager, and his or her possible actions. Product Alpha has annual sales of 1,000 units and a contribution of $2,500; it is in the introductory stage. Product Bravo has annual sales of 1,500 units and contribution of $3,000; it is in the growth stage. Product Charlie has annual sales of 3,500 units and a contribution of $1 ,750; it is in the decline stage.
Sort descending this list by looked at the individual dollar contribution and total annual dollar contribution. Product Bravo Product Alpha Product Charlie Contribution $3,000 $2,500 $1,750 Annual sales 1,500 units 1,000 units 3,500 units Life cycle Growth Introduction Decline Sales Look at the table and graph, product Charlie at decline stage of life cycle and know this product will be end in the certain period from now. The products are not up to date, not suitable for this era (technology era). Thus, the customers turn to the competitor products because they come out with new and fresh idea.
Therefore, this product must produce in the small quantity while it has the demand and also as organization responsibility for certain people that can’t adapt new 1 | P a GE products. Besides that the organization must plan to terminate offering. For product Alpha, it seat at the introduction of life cycle, so for this product, it didn’t have any problem to produce in a large quantity if it get the good response from customers but if the response from customer is bad or not well, produce the product in the small quantity.
Because, these products are new in market, not all customers know about it and also still need some changes. Additionally in this stage, should to do ore on research, product development, process modification and enhancement and supplier development. In addition, the advertising to introduce or promote this product to customer must do it well. Furthermore, the life cycle of product Bravo is growth. In this stage, the product is become stable, because the customers already know about the products.
Thus, by add more on quantities to accommodate the raise in product demand. Last but not least, the advertising also must do for create the demand. Question 5. 11 The product design group of Floors Electric Supplies, Inc. , has determined that it needs to design a new series of switches. It must decide on one of three design strategies. The market forecast is for 200,000 units. The better and more sophisticated the design strategy and the more time spent on value engineering, the less will be the variable cost. The chief of engineering design, Dry.