Problems 5.1-5.3 relate to Goods and Services Selectionthe life cycle, identify a reasonable operations strategy foreach:... 5.1ing products, and given the position in its life cycle, identify theissues likely to confront the operations manager and his or herpossible actions. Product Alpha has annual sales of 1,000 unitsand a contribution of $2,500; it is in the introductory stage.Prepare a product-by-value analysis for the follow-COMPANYCONTRIBUTION(%: TOTAL ANNUALCONTRIBUTIONPRODUCTCONTRIBUTION(% OF SELLINGPRICE)DIVIDED BY TOTALANNUAL SALES)POSITION INLIFE CYCLEProduct Bravo has annual sales of 1,500 units and a contribu-PRODUCTtion of $3,0003; it is in the growth stage. Product Charlie hasannual sales of 3,500 units and a contribution of $1,750; it is inthe decline stage.Smart watch3040IntroductionTablet3050GrowthHandcalculator• 5.2Given the contribution made on each of the5010Declinethree products in the following table and their position in

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... 5.1 ing 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 S2,500%; it is in the introductory stage. Prepare a product-by-value analysis for the follow- Product Bravo has annual sales of 1,500 units and a contribu- tion of $3,000; it is in the growth stage. Product Charlie has annual sales of 3,500 units and a contribution of S1,750; it is in the decline stage.

... 5.1 ing 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 S2,500%; it is in the introductory stage. Prepare a product-by-value analysis for the follow- Product Bravo has annual sales of 1,500 units and a contribu- tion of $3,000; it is in the growth stage. Product Charlie has annual sales of 3,500 units and a contribution of S1,750; it is in the decline stage.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 12E: The following series of statements or phrases are associated with product life-cycle viewpoints....

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The following series of statements or phrases are associated with product life-cycle viewpoints. Identify whether each one is associated with the marketing, production, or customer viewpoint. Where possible, identify the particular characteristic being described. If the statement or phrase fits more than one viewpoint, label it as interactive. Explain the interaction. a. Sales are increasing at an increasing rate. b. The cost of maintaining the product after it is purchased. c. The product is losing market acceptance and sales are beginning to decrease. d. A design is chosen to minimize post-purchase costs. e. Ninety percent or more of the costs are committed during the development stage. f. The length of time that the product serves the needs of a customer. g. All the costs associated with a product for its entire life cycle. h. The time in which a product generates revenue for a company. i. Profits tend to reach peak levels during this stage. j. Customers have the lowest price sensitivity during this stage. k. Describes the general sales pattern of a product as it passes through distinct life-cycle stages. l. The concern is with product performance and price. m. Actions taken so that life-cycle profits are maximized. n. Emphasizes internal activities that are needed to develop, produce, market, and service products.
(Appendix 11A) Balanced Scorecard The following list gives a number of measures associated with the Balanced Scorecard: a. Number of new customers b. Percentage of customer complaints resolved with one contact c. Unit product cost d. Cost per distribution channel e. Suggestions per employee f. Warranty repair costs g. Consumer satisfaction (from surveys) h. Cycle time for solving a customer problem i. Strategic job coverage ratio j. On-time delivery percentage k. Percentage of revenues from new products Required: 1. Classify each performance measure as belonging to one of the following perspectives: financial, customer, internal business process, or learning and growth. 2. Suggest an additional measure for each of the four perspectives.
Classify each of the following performance measures into the balanced scorecard perspective to which it relates: financial perspective, internal operations perspective, learning and growth perspective, or customer perspective. A. Number of improved products B. Time from packaging to delivery or display C. Production costs D. Number of customer suggestions E. Sales mix revenues F. Number of repeat customers
Final Price and Profit Equations This exercise will help you identify and understand what goes into determining both the final price for a purchased product as well as the equation for the profit on a product. Among all marketing and operations factors in a business firm, price has a unique role. It is the place where all other business decisions come together. The price must be "right"—in the sense that customers must be willing to pay it; it must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product; and it must earn a profit for the company. Small changes in price can have big effects on both the number of units sold and company profit. Read the case below and answer the questions that follow. You are shopping for a new printer to take back to college with you. You decide on the PIXMA iP100 due to its superior photo print quality and are now looking for the best price. Different stores have different deals, plus the…
Final Price and Profit Equations This exercise will help you identify and understand what goes into determining both the final price for a purchased product as well as the equation for the profit on a product. Among all marketing and operations factors in a business firm, price has a unique role. It is the place where all other business decisions come together. The price must be "right"—in the sense that customers must be willing to pay it; it must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product; and it must earn a profit for the company. Small changes in price can have big effects on both the number of units sold and company profit. Read the case below and answer the questions that follow. You are shopping for a new printer to take back to college with you. You decide on the PIXMA iP100 due to its superior photo print quality and are now looking for the best price. Different stores have different deals, plus the…
Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Sentence Appropriate term for completing sentence a. Advertising costs are usually viewed as (period, product) costs. b. Feedback is often used to (improve, direct) operations. c. Payments of cash or the commitment to pay cash in the future for the purpose of generating revenues are (costs, expenses). d. A product, a sales territory, a department, or an activity to which costs are traced is called a (direct cost, cost object). e. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). f. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.
1. Customer profitability analysis allows managers to do which of the following? a. Identify the closest competitor. b. Sell to higher end customers. c. Manage each customer's costs-to-serve. d. Focus solely on service calls. 2. What is the focus of operational control? a. Long-term operating performance. b. The profitability of the company. c. The activities of company executives. d. Short-term operating performance. 3. The objectives of management control of the manager include: a. Cost, quality, and functionality. b. Management by objectives. c. Management by exception. d. Motivation, incentive, and fairness. 4. Cost allocation of costs for shared services in an organization is intended to remind managers of: a. The cost and value of using shared resources. b. How much capacity a firm has. c. Manufacturing cycle time. d. Variable costing income calculations. 5. The method for directly measuring the value of a firm's equity is: a. Market value. b. Sales multiple. c. Earnings-based…
b. activity-based costing d. c. flexible manufacturing. d. speed-to-market. 29. The ability to deliver a product or service faster than the competition is termed: just-in-time. statistical quality control. a. b. 30. A set of policies, procedures and approaches to business to produce long-term success is termed a: critical success factor. c. mission. d. strategy. a. b. competitive position. Exercises Exercise 1: Ethics and the Manager Raymond Diaz was recently hired as assistant controller of RD Chem Inc., which processes chemicals for use in fertilizers. Diaz was selected for this position because of his past experience in chemical processing. During his first month on the job, Diaz made a point of getting to know the people responsible for the plant operations and learning how things are done at RD Chem. During a conversation with the plant supervisor, Diaz asked about the company procedures for handling toxic waste materials.The plant supervisor replied that he was not involved with…
Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Appropriate term for Sentence completing sentence a. Advertising costs are usually viewed as (period, product) costs. b. Feedback is often used to (improve, direct) operations. c. Payments of cash or the commitment to pay cash in the future for the purpose of generating revenues are (costs, expenses). d. A product, a sales territory, a department, or an activity to which costs are traced is called a (direct cost, cost object). e. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). f. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.
Describing the balanced scorecard and identifying key performance indicators for each perspective Consider the following key performance indicators, and classify each indicator according to the balanced scorecard perspective it addresses. Choose from the financial perspective, customer perspective, internal business perspective, and the learning and growth perspective. a. Number of customer complaints b. Number of information system upgrades completed c. Residual income d. New product development time e. Employee turnover rate f. Percentage of products with online help manuals g. Customer retention h. Percentage of compensation based on performance i. Percentage of orders filled each week j. Gross margin growth k. Number of new patents l. Employee satisfaction ratings m. Manufacturing cycle time (average length of production process) n. Earnings growth o. Average machine setup time p. Number of new customers q. Employee promotion rate r. Cash flow from operations s. Customer…
Describing the balanced scorecard and identifying key performance indicators for each perspective Consider the following key performance indicators, and classify each according to the balanced scorecard perspective it addresses. Choose from a financial perspective, customer perspective, internal business perspective, or learning and growth perspective. Number of employee suggestions implemented Revenue growth Number of on-time deliveries Percentage of salesforce with access to real-time inventory levels Customer satisfaction ratings Number of defects found during the manufacturing Number of warranty claims Return on investment Variable cost per unit Percentage of market share Number of hours of employee training Number of new products developed Yield rate (number of units produced per hour) Average repair time Employee satisfaction Number of repeat customers
Below are four levels of ERP value realization: a. printing invoices b. production and inventory management + a. c. accounting and finance information integration + a. + b. d. company-wide resource integration Please explain the progress/improvement a company makes from level a. to b., from b. to c., and from c. to d.