1. What is the production manager’s task in the short run? Long-run?

Short run-use existing facilities in the best way through proper maintenance, inventory control,
production scheduling,

-vary input as by purchasing fewer materials

-production efficient by multishift operations, overtime, improved work methods

-temporarily add capacity by hiring another company to do the part of the work

Long run search for ways to improve existing facilities and to modify or expand them as needed, variable
production capacity-market survey ,strategy, financial budget

2. Three types of transformation processes

 Synthetic- basic parts combined to form a finished product-appliance from steel

 Analytic- basic material broken down into one or more final products- refining of iron into building
materials
 Temporal and spatial -storage-time, transportation service-place

3. The steps in the purchasing cycle

 Requisitions- purchase request to buyer- type, n of items needed

 Value Analysis- lowest cost way to satisfy request
 Supplier Selection- purchasing agent obtains quotes on prices and delivery times
 Order placement- purchase order
 Order Monitoring- check orders on schedule
 Order Delivery- purchase is recorded and payment is made

4. Four key trade-offs in production management

 Inventory control- large/high holding cost/, small/high ordering & stockout costs/
 Production Scheduling- schedule A’s order first upset B
 Maintenance- frequent/high maintenance cost/, infrequent/high breakdown cost/
 Casual Quality control- careful/high quality control cost/, casual/high costumer dissat, servicing,
replacement cost/

5. Three costs associated with inventory control

 Holding costs- ware house rental

 Ordering costs-paperwork and management time
 Stockout costs- when firm runs out of inventory

6. Seven steps in the production planning and control process

 Routing- movement of mechanical part in operation

 Loading- time of each machine performing
 Scheduling- when operation is to be performed at machine
 Dispatching-preparing, issuing work orders
 Follow Up- keeping track of completed work, and delays
 Corrective action- scheduling overtime, shifting work to other machines
 Replanning- development of new routing, loading, scheduling
7. Two analytical tools for production planning and control

 Schedule charts-when each series of job is performed at each machine, station, department
 PERT and Critical Path- minimize project delays through effective scheduling of activites

8. Control Chart

Past outputs of our production process and determine their average characteristics and the typical
variation around these averages. Also probability that various devations may have occurred by chance
alone.

9. Three forms of maintenance

 Corrective- fixing machine that is not working properly

 Preventive- designing, inspecting, servicing machinery so that breakdowns are less likely to occur
 Predictive-employing monitoring instruments to estimate when machine failure is most likely to
occur

1.Key to the Marketing of convenience goods- milk, magazine

Location- nearest store, mass advertising, not by personal attention and sales technique, price when
competitior.

2. Advertising of Shopping goods- retail advertising-which brand info- manufacturer advertising,

salesperson effort

3. difference btw industrial and consumer goods- buyers of industrial goods are not final consumers,
production of their g&s

4. Market development stage to Rapid growth stage

change, check on product quality, public reaction, modify selling and promotion strategy

5. How profitable during maturity stage

basic goal-hold on to market share, proft can still be made if econ is strong and p is selling well.Sales
slump- recession, taste change- can wipe out profits entirely.

6. Intro to new product and product life cycle

high profits are not min the maturity stage. The firm should have another product ready for the market
to keep the firm in business as it movies into the profitable stages of its life cycle.

7. Brand name- identifies the seller and establish control over buyer

Generate repeat sales and make it easier to introduce new products

8. Attributes easier to sell new product

-lower price, greater convenience in use, more dependable perf, easier to buy in time, place,credit,
positive noticeable consumption, new appearance, new markets

Attributes harder
 -complex methods of use, unfamilliar use, benefits, hihg risk of costly errors, negative apperance

9. The six-stage model of Developing new products

1. Idea Generation
2. Product Evaluation
3. Economic analysis
4. Product development
5. Test Marketing
6. Commercialization

10. Why some products fail and other succeed?

Failure- inadequate market analysis, product defects, lack of marketing, higher cost

Better performance of product, different from others- feature improvements

1. Distribution channel- organized network of ind and bus-intermediaries- through which g&s flow
from producers to end users. Dynamic- Consumer tastes and preferences change rapidly, and
new selling and transportation opportunity every day.
2. Roles of wholesaler and retailer
Contact potential customers, cut transportation costs, stimulate demand, maintain inventory, relay
market information-Cannot afford entire channel of distribution, only know about production not
wholesaling, retailing

3. How wholesale differ from retailer?

Wholesaler sells products to retailers – do not deal with final costumer.

4. Limited-service wholesalers-Although they perform the functions of contacting and

transportation, they have small sales force on customers- rarely provide market info to suppliers
or credit and managerial services to customer

5. Merchandise agents- do not buy merchandise(do no take title to it) and hold it for resale. They
are paid a fee for bringing buyer and seller together.

6. Distribution-

Intensive-product available to many stores- convenience goods

Extensive- few stores- specialty goods
Selective-btw- several stores- shopping goods
7. Physical distribution and marketing- reducing product delivery time, improving order cycle
consistency- length of time btw placing order and delivery of merchandise to buyer

1. Role of price
Comparison value with other products
Stimulation – signal as produce, buy more?
Rationing-scarce resource, income, expected utility
2. Pricing objectives- max profit, achieve target return on investment, target market share and
matching competition
8. Promotional pricing- mark down- at that time- clothing, loss leader- stimulate other products-
grocery
9. 3/10, net 30- payment is due on 3o days, discount 2 percent if paid within 1p days

Price skimming-pricing new product at artificial High price before competition

Penetration pricing-Opp-Low price to attract may buyers- price conscious

Channel of production-

Middleman, production management