Om-Sess 2 Product Design and Decision Making Tools
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
Assume the graph looked like this
Sales
Contribution
Introduction
Growth
Decline
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 more on
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
Assume the graph looked like this
Sales
Contribution
Introduction
Growth
Decline
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 more on