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Agenda of Week VI. Forecasting and Design
Forecasting control
Qualitative methods
Quantitative methods
Forecasting methodsForecasting methodsReview of week 5Review of week 5
1 2
Moving average
Exponential smoothing
Associate forecast
Purposes : Understanding the techniques of forecasting Introducing the product and service design
DesignDesign
3
Definition
Necessities
Approaches
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Review of Week V. Forecasting
Purposes : Understanding the process and techniques of forecasting
Forecasting controlForecasting control Forecasting methodsForecasting methods
21
Qualitative methods
Quantitative methodsAveraging
MAD
MSE
MAPE
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Weighted Moving Average
The most recent values in a time series are given more weight in computing a
forecast The choice of weights, w, is somewhat arbitrary and involves some trial and error
Ft wn At n wn 1At (n 1) ... w1At 1
where
wt weight for period t, wt 1 weight for period t 1, etc.
At the actual value for period t, At 1 the actual value for period t 1, etc.
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Exponential Smoothing
A weighted averaging method that is based on the previous forecast plus a
percentage of the forecast error
Ft Ft 1 (At 1 Ft 1)
where
Ft Forecast for period t
Ft 1 Forecast for the previous period
= Smoothing constant
At 1 Actual demand or sales from the previous period
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Associative Forecasting Techniques
Home values may be related to such factors as home and property size, location, number
of bedrooms, and number of bathroomsAssociative techniques are based on the development of an equation that summarizes the effects
of predictor variables Predictor variables - variables that can be used to predict values of the variable of interest
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Simple Linear Regression
Regression - a technique for fitting a line to a set of data points Simple linear regression - the simplest form of regression that involves a linear
relationship between two variablesThe object of simple linear regression is to obtain an equation of a straight line that minimizes
the sum of squared vertical deviations from the line (i.e., the least squares criterion)
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Chapter 4
Product and Service Design
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Reasons Design or Re-Design
The driving forces for product and service design or redesign are market opportunities or threats:
Economic Social and Demographic Political, Liability, or Legal Competitive Cost or Availability Technological
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Key Questions
Is there a demand for it? Market size Demand profile
Can we do it? Manufacturability - the capability of an organization to produce an item at an acceptable profit
Serviceability - the capability of an organization to provide a service at an acceptable cost or profit
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Key Questions (contd.)
What level of quality is appropriate? Customer expectations Competitor quality Fit with current offering
Does it make sense from an economic standpoint? Liability issues, ethical considerations, sustainability issues, costs and profits
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Legal Considerations
Legal ConsiderationsProduct liability
The responsibility a manufacturer has for any injuries or damages caused by as faulty product
Some of the concomitant costsLitigationLegal and insurance costsSettlement costsCostly product recallsReputation effects
Uniform Commercial CodeUnder the UCC, products carry an implication of merchantability and fitness
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Normative Behavior
Produce designs that are consistent with the goals of the organizatione.g., Do not compromise on quality, or cut corners, even in areas that are not
apparent to the customer
Give customers the value they expect
Make health and safety a concernDo not place employees, customers, or third parties at risk because of faulty
products and services
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Sustainability
SustainabilityUsing resources in ways that do not harm ecological systems that support
human existence
Key aspects of designing for sustainabilityLife cycle assessmentReduction of costs and materials usedRe-using parts of returned productsRecycling
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Life Cycle Assessment (LCA)
LCA The assessment of the environmental impact of a product or service throughout its useful life
Focuses on such factors as Global warming Smog formation Oxygen depletion Solid waste generation
LCA procedures are part of the ISO 14000 environmental management procedures
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Reduce: Costs and Materials
Value analysisExamination of the function of parts and materials in an effort to reduce the
cost and/or improve the performance of a productCommon questions used in value analysis
Could a less expensive part of material be used?
Is the function necessary?
Can the function of two or more parts be performed by a single part?
Can a part be simplified?
Could product specifications be relaxed?
Could standard parts be substituted for non-standard parts?
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Re-Use: Remanufacturing
Remanufacturing Refurbishing used products by replacing worn-out or defective components
Can be performed by the original manufacturer or another company
Design for disassembly (DFD)Designing a product to that used products can be easily taken apart
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Recycle
RecyclingRecovering materials for future use
Applies to manufactured partsAlso applies to materials used during production
Why recycle?Cost savingsEnvironmental concernsEnvironmental regulations
Design for recycling (DFR)Product design that takes into account the ability to disassemble a used product to recover the recylcable parts
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Product or service life stages
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Standardization
Standardization Extent to which there is an absence of variety in a product, service, or process
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Designing for Mass Customization
Mass customization A strategy of producing basically standardized goods or services, but incorporating some
degree of customization in the final product or service
Facilitating TechniquesDelayed differentiation
Modular design
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Delayed Differentiation
Delayed Differentiation The process of producing, but not quite completing, a product or service until customer
preferences are known
It is a postponement tactic
Produce a piece of furniture, but do not stain it; the customer chooses the
stain
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Modular Design
Modular DesignA form of standardization in which component parts are grouped into modules that are easily replaced or interchanged
Advantageseasier diagnosis and remedy of failures
easier repair and replacement
simplification of manufacturing and assembly
DisadvantagesLimited number of possible product configurations
Limited ability to repair a faulty module; the entire module must often be scrapped
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Reliability
Reliability The ability of a product, part, or system to perform its intended function under a prescribed set of conditions
FailureSituation in which a product, part, or system does not perform as intended
Normal operating conditionsThe set of conditions under which an item’s reliability is specified
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Robust Design
Robust design A design that results in products or services that can function over a broad range of
conditions
Pertains to product as well as process designConsider the following automobiles:
Ferrari 599 Toyota Avalon
» Which is design is more robust?
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Degree of Newness
Product or service design changes:Modification of an existing product or serviceExpansion of an existing product line or service offeringClone of a competitor’s product or serviceNew product or service
The degree of change affects the newness of the product or service
to the market and to the organizationRisks and benefits?
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Concurrent Engineering
Concurrent engineering Bringing engineering design and manufacturing personnel together early in the design
phaseAlso may involve marketing and purchasing personnel
Views of suppliers and customers may also be sought
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Component Commonality
When products have a high degree of similarity in features and
components, a part can be used in multiple products
Benefits:Savings in design timeStandard training for assembly and installationOpportunities to buy in bulk from suppliersCommonality of parts for repairFewer inventory items must be handled
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The House of Quality
Relationshipmatrix
Design requirements
Specificationsor
target values
Correlationmatrix
Competitiveassessment
Customerrequirements
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Kano Model
Basic qualityRefers to customer requirements that have only limited effect on customer satisfaction if present, but lead to dissatisfaction if absent
Performance qualityRefers to customer requirements that generate satisfaction or dissatisfaction in proportion to their level of functionality and appeal
Excitement qualityRefers to a feature or attribute that was unexpected by the customer and causes excitement
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Service Design Definitions
Service Something that is done to, or for, a customer
Service delivery system The facilities, processes, and skills needed to provide a service
Product bundle The combination of goods and services provided to a customer
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Service Design
Begins with a choice of service strategy, which determines the nature and focus of
the service, and the target market Key issues in service design
Degree of variation in service requirements
Degree of customer contact and involvement