1. How are Made-to-Order and Made-to-Stock systems different?

Is a highly standardized
product usually produced through a make-to-order or a make-to-stock processing
strategy?

Made to order is when a product is only produced when the customer requests it, thus it takes
longer to make but can be customized to a customer's needs. Made to stock is when a business
already has the product on stock before the customer orders it.

2. List and describe the stages of the product life cycle.

- Incubation: is when a product is first launched into the market, a product in this life
cycle would be considered risky but has a lot of potential.
- Rapid Growth: The demand increases and the product becomes more popular so there
more producers start making the product, increasing the competition.
- Maturity: The product is now well established and only a few producers remain after
intense competition in the rapid growth stage. The companies that exist in the maturity
phase make a lot of money because there is less competition.
- Decline: Product begins to phase out because better options are available. Demand
declines, reducing the amount of producers.

3. What is likely to happen to the price of a product as it ages? Explain.

In the incubation phase the product's price is generally lower since there is less demand. As the
product gains more notoriety in the rapid growth phase the price goes up but remains relatively
low due to the high competition. The price then goes up during the maturity phase since the
demand is high and the competition is relatively low. During the decline phase the demand goes
down thus the price also goes down.

4. At what phase of the product life cycle are most organizations offering the product to
the customer?

During the rapid growth phase because producers realized that there is a market for the product
but competition has not yet weeded out some of the producers.

5. What is productivity and how is it measured? When calculating productivity, do higher

or lower results indicate improvement?

Productivity is a measurement of value creation, calculated as a ratio of the value of output to

input (P= Outputs/Inputs). When calculating productivity the higher the results indicate
improvement.
6. In a machine shop, eight employees repaired 90 engines during a 5-day workweek.
What is the productivity per employee day? (See Noteshaper Quick Start Question 14)

90 engines/ 40 employee days = 2.25 engines per employee day.

7. Lanark Farms sells fresh strawberries, growing the fruit both in open fields and within
long clear plastic hoop tents, known as its “tunnel operation”. The outputs and inputs for
each of the options are presented below. What is the multifactor productivity (in dollars)
for each option?

Option A: 45,000 / 29,000 = $1.55

Option B: 40,000 / 31,000 = $1.29

8. How much more or less productive is the Plastic Hoops method compared to the Open
Field method? [ Hint, (B- A)/A ]

(1.29 - 1.55)/1.55 = 0.29

0.29 * 100 = 29%
Plastic hoops method is 29% less productive than the open field method.

9. How much more or less productive is the Open Field method compared to the Plastic
Hoops method? [ Hint, (A- B)/B ]

(1.55 - 1.29)/1.29 = 0.20

0.20 * 100 = 20%
Open field method is 20% more productive than the plastic hoops method.