1. To reach your goal you must take the first step

2. There is only one boss. The CUSTOMER! And he can fire anyone in the company from the chairman on down, simply by spending his money somewhere else. SAM WALTON

3. 96 % don’t complain about rude or discourteous service. 90 % will not buy again or come back. Each will tell at least 9 other people. 13% will tell more than 20 people. 96 % don’t complain about rude or discourteous service. 90 % will not buy again or come back. Each will tell at least 9 other people. 13% will tell more than 20 people. Tales of Unhappy Customers

4. Product Life Cycle AnnualSales AnnualProfits ProductPlanning Introduction Growth Maturity Decline

5. Step 1 Idea Generation Step 1 Idea Generation The Planning Process 20 -25 new ideas for every new product 20 -25 new ideas for every new product

6. Step 1 Idea Generation Step 1 Idea Generation The Planning Process Step 2 Screening Step 2 Screening Discard most ideas during screening Discard most ideas during screening

7. Threshold is 800 - reject alternative Preference Matrix Performance Criterion Weight Score Weighted Score Market potential 30 8 240 Unit profit margin 20 10 200 Operations compatibility 20 6 120 Competitive advantage 15 10 150 Investment required 10 2 20 Project risk 5 4 20 750

8. Step 1 Idea Generation Step 1 Idea Generation The Planning Process Step 2 Screening Step 2 Screening Discard most ideas during screening Discard most ideas during screening

9. Step 1 Idea Generation Step 1 Idea Generation The Planning Process Step 2 Screening Step 2 Screening Step 3 Development and Testing Step 3 Development and Testing Design prototypes Conduct Market tests Design prototypes Conduct Market tests

10. Step 1 Idea Generation Step 1 Idea Generation The Planning Process Step 2 Screening Step 2 Screening Step 3 Development and Testing Step 3 Development and Testing Step 4 Final Design Step 4 Final Design Pilot production, Promotion starts Pilot production, Promotion starts

11. Step 1 Idea Generation Step 1 Idea Generation The Planning Process Step 2 Screening Step 2 Screening Step 3 Development and Testing Step 3 Development and Testing Step 4 Final Design Step 4 Final Design

12. BREAK EVEN ANALYSIS Total Revenue = Total Cost P = F + c Q ( P - c ) Q Q= F Q = F be..

13. Total annual revenues Total annual cost Fixed Cost Dollars 400 300 200 100 25% 50% 75% 100% Loss Profit Break-even quantity % of capacity

14. Total annual revenues Total annual cost Fixed Cost Dollars 400 300 200 100 Break-even quantity % capacity 25% 50% 75% 100%

15. Total Cost of B Dollars 20000 15000 10000 5000 5000 10000 15000 20000 Break-even quantity units = Q Total Cost of A $70000 + $10 x = $50000 + $12 x $20000 = 2 x $10000 = x = Breakeven

16. Product Quality Reliability: Probability that a component (or several components working together) will function properly for a given period of time.

17. Reliability Reliability of System = Combined Reliabilities of all components or mathematically, R = R x R x R 1 23 s R =.9 x.8 x.99 =.713 = 71.3% s.9.8.99

18. Reliability R =.9 +.9 (1 -.9) x.8 +.8 (1 -.8) x.99 =.94 = 94 % s.9.8.99 If the system reliability is too low, we can improve it by building in redundancy in some or all of the components..9.8

19. Product/Process Matrix ProcessFocus IntermediateStrategy ProductFocus Volume/Standardization ProcessChoice HIGH LOW

20. ProcessFocus Volume/Standardization ProcessChoice HIGH LOW More customization More resource flexibility more labor intensive less vertical integration More customization More resource flexibility more labor intensive less vertical integration

21. Product/Process Matrix ProductFocus Volume/Standardization ProcessChoice HIGH LOW More standardization more capital intensive more vertical integration More standardization more capital intensive more vertical integration