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ADMS 4245 (2)
Chapter 1

CHAPTER 1.doc

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Department
Administrative Studies
Course
ADMS 4245
Professor
Peter Modir
Semester
Winter

Description
CHAPTER 1 - INTRODUCTION The economics success of a product depends on the ability to find a need and quickly create a product to satisfy those needs. Achieving these goals is not solely a marketing problem, nor is it solely a design problem or manufacturing problem; it is a PRODUCT DEVELOPMENT PROCESS • PRODUCT DEVELOPMENT: it is the set of activities beginning with the perception of a market opportunity and ending in the production, sale, and delivery of a product. • Characteristics of Successful Product Development: There are 5 dimensions that should lead to economics success; however, other performance criteria arise from the interest of other stakeholders in the enterprise, including the members of the development team, other employees and the community where it is manufactured. 1. Product Quality: How good is it? Product quality is ultimately reflected in market share and the price that customers are willing to pay 2. Product Cost: What is the manufacturing cost of the product?, which includes capital acquisition, incremental cost of production. Product cost determines how much profit accrues to the firm for a particular sales volume and a particular sales prices 3. Development time: How quickly did the team complete the development? Development time determines how responsive the firm can be to competitive forces and to technological developments as well as how quickly the firm receives the economics returns from the team’s effort 4. Development cost: how much did it cost to develop the product? This is a significant investment for a new product 5. Development Capability: are the team and the firm better able to develop future products as a result of their experience with a product development project? Development capability is an asset the firm can use to develop products more effectively and economically in the future • Who designs and develop Products?: Product development requires contribution from nearly all the functions of a firm. These are the most important functions: 1. Marketing: Helps understand the customers’ needs and typically arranges communication between firm and customers, sets target prices, and oversees the launch and promotion of product 2. Design: It plays the lead role in defining the physical form of the product to best meet customer needs. It includes engineering design such as mechanical, electrical, software, etc. Industrial design (Ergonomics) 3. Manufacturing: It is primarily responsible for designing, operating, and/or coordinating the production system to produce the new product. It also includes purchasing, distribution and installation. It might be called supply chain • Types of teams 1. Project team: Few products are developed by a single individual. Project team is the collection of individuals developing a product. This team usually has a single team leader, who could be drawn from any of the functions listed above. The project team can be divided in to 2:  1) Core Team: in order to work together effectively, the core team usually remains small enough to meet in a conference room (team leader, marketing, design (mechanical, industr
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