4.2 Design Process

Product (good) design is the process of defining all the features and characteristics of just about anything you can think of, from fast foods restaurants to GM's cars or HP's DeskJet printer. Consumers respond to a product's appearance, color, texture, and performance. All of its features, summed up, are the product's design. Someone came up with the idea of what this product will look like, taste like, or feel like so that it will appeal to you. This is the purpose of product design. Product design defines a product's characteristics, such as its appearance, the materials it is made of, its dimensions and tolerances, and its performance standards.

Service design, where the product is intangible, the design elements are equally important, but they have an added dimension. Service design is unique in that both the service and the entire service concept are being designed. The service concept is based on meeting customer needs. The service design, however, adds the aesthetic and psychological benefits of the product. These are the service elements of the operation, such as promptness and friendliness. They also include the ambiance, image, and "feel-good" elements of the service.

The product Design Process:

Certain steps are common to the development: idea generation, product screening, preliminary design and testing, and final design.

4.2 Design Process

These steps are shown in Figure 4-1 that the arrows show a circular process. Product designs are never finished, but are always updated with new ideas.

Figure 4-1
Management analyzes operations, marketing, and financial factors and then makes the final decision. Fortunately, we have decision-making tools to help us evaluate new product ideas. A popular one is break-even analysis, which we look at next.

4.2 Design Process

To make a profit, we have to sell above the break-even point. Since revenue equals total cost at the break-even point, we can use the previous equation to compute the value of the break-even quantity:

Total cost = total revenue
F+ (VC)Q = (SP)Q Solving for Q, we get the following equation QBE = F/(SP-VC)
Note that we could also find the break-even point by drawing the graph and fining where the total cost and revenue lines cross.

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