Professional Documents
Culture Documents
Design of Goods and Services
Design of Goods and Services
and Services 5
PowerPoint presentation to accompany
Heizer, Render, Munson
Operations Management, Twelfth Edition, Global Edition
Principles of Operations Management, Tenth Edition, Global Edition
Customer Requirements
Functional Specifications
Introduction
Evaluation
► Assembly drawing
► Assembly chart
► Route sheet
► Work order
► Engineering change notices (ECNs)
Figure 5.12
(.4)
High sales
(.6)
Low sales
Do nothing
Figure 5.13
Copyright © 2017 Pearson Education, Ltd. 5 - 22
Example
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
(.4)
High sales= (.4)($1,000,000) + (.6)(– $20,000)
EMV (purchase CAD system)
(.6)
Low sales
Do nothing
Figure 5.13
Copyright © 2017 Pearson Education, Ltd. 5 - 24
Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
(.4)
High sales= (.4)($1,000,000) + (.6)(– $20,000)
EMV (purchase CAD system)
= $388,000
(.6)
Low sales
Do nothing
Figure 5.13
Copyright © 2017 Pearson Education, Ltd. 5 - 25
Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
$365,000
$2,500,000 Revenue
(.4) – 1,250,000 Mfg cost ($50 x 25,000)
– 375,000 Hire and train cost
High sales
$875,000 Net
$800,000 Revenue
(.6) – 400,000 Mfg cost ($50 x 8,000)
– 375,000 Hire and train cost
Low sales
$25,000 Net
Do nothing $0