Through market research and competitor analysis Nebraska Toaster Company has found a market for toaster oven...
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Through market research and competitor analysis Nebraska Toaster Company has found a market for toaster oven new product that is not currently being produced by competitors. This new toaster can toast bagels or regular toast bread or grill sausages. It will be targeted for a consumer group of young family households. The customer requirements and important features to the consumer have been identified and the Nebraska Toaster Company will focus on these for the toaster oven design. The criteria are: Nebraska Toaster Company wants to competitively match the price toaster oven to basic toasters; the competitive market price is $20.00. Nebraska Toaster Company wants to earn a profit of 20 % of sales price. Relevant cost information for the company follows in Table 1. Most of the life cycle activities are done inside the firm, but shipping is outsourced. Value Chain Table 1 Life Cycle and Value Chain Analysis Life Cycle R&D Manufacturing Selling Shipping General Adm. Total Target $ 4.00 Toasts properly Size (25%) 9.00 Speed of toasting Toaster capacity Appearance Easy to clean (56%) 1.60 (10%) Inside Current Gap $ 4.20 $ 0.20 12.00 1.80 0.70 3.00 0.20 0.50 (3%) $ 15.10 $ 18.70 $ 3.60 (94%) 0.20 Target $0.90 (6%) $ 0.90 (6%) Outside Current Gap $ 1.00 $0.10 $ 1.00 S 0.10 Target $ 4.00 (25%) 9.00 (56%) 1.60 (10%) 0.90 (6%) 0.50 (3%) $16.00 Total Current Gap $4.20 $0.20 12.00 1.80 3.00 0.20 1.00 0.10 0.70 0.20 $19.70 $3.70 The toaster company through value engineering and continuous improvement plans to determine a way to reach the target cost by looking at the products life cycle and its value chain activities to determine where to reduce costs. Step 1-- Product Functional Cost analysis Nebraska Toaster Company plans to implement functional analysis to target areas of cost reduction. Here the company breakdowns the current $12.00 manufacturing costs (from Table 1 "Manufacturing" row and "Total Current" column) for the toaster oven by the components' estimated costs and functions performed. The result is in Table 2. Table 2 Product Functional Cost Analysis Component Heating Unit Display Light Lever Spring Coil Temperature Control Timer Body Design Crumb and Grease Catcher TOTAL Function Toast bagels or grill sausages Indicates the process of toasting or grilling Lowers bagels or sausages into toaster & initiates toasting or grilling Pops up bagels or sausages when toasted or grilled Controls degree of toasting or grilling Holds bagels or sausages Catches crumbs and greases & is removable for cleaning Current Cost Table 3 Customer Requirement Analysis $2.40 1.60 0.60 0.60 0.60 5.10 1.10 $12.00 % of Cost 100% 20 13 5 5 5 43 9 The Nebraska Toaster Company plans to rank the features of the new bagel toaster according to customer preferences and requirements, in Step 2. Step 2 -- Customer Requirement Analysis Nebraska Toaster Company selected a customer focus group to rank the six most important characteristics or requirements as shown in Table 3. Customer Requirements Toasts and grills properly Size Speed of teasting or grilling Toaster oven capacity Appearance Easy to clean TOTAL Customer Ranking Ranking is from 1-5, 5 the most important 5 3 3 2 1 4 Relative Ranking % Raw Score 18 5 3 3 2 I 4 28 17 17 11 5 22 100 The customers rank the criteria -- toast or grill properly, cleaning, and size -- as the most important relative to the other customer characteristics or requirements. The next process compares the customer requirement features to the component functions. Step 3 -- Quality Function Development Analysis Nebraska Toaster Company engineers assessed the new toaster oven product's functional performance as shown in Table 4. Table 4 Quality Functional Performance Assessment Components or Functions Customer Requirements Toasts properly Size Speed of toasting Toaster capacity Appearance Easy to clean Required: Heating Unit 50% 50% 70% 30% 50% Display Light 20% Lever Spring Coil 20% 5% I 20% Temp. Control & Timer 10% 10% Body Design 50% 20% 60% 80% 45% Crumb Catcher 5% 5% Total 100% 100% 100% 100% 100% 100% 1. Calculate the target cost for the toaster 2. Using the information above, develop a ranking of product functions that gives the company the importance and value of each component relative to the features that create value to the customer. Through market research and competitor analysis Nebraska Toaster Company has found a market for toaster oven new product that is not currently being produced by competitors. This new toaster can toast bagels or regular toast bread or grill sausages. It will be targeted for a consumer group of young family households. The customer requirements and important features to the consumer have been identified and the Nebraska Toaster Company will focus on these for the toaster oven design. The criteria are: Nebraska Toaster Company wants to competitively match the price toaster oven to basic toasters; the competitive market price is $20.00. Nebraska Toaster Company wants to earn a profit of 20 % of sales price. Relevant cost information for the company follows in Table 1. Most of the life cycle activities are done inside the firm, but shipping is outsourced. Value Chain Table 1 Life Cycle and Value Chain Analysis Life Cycle R&D Manufacturing Selling Shipping General Adm. Total Target $ 4.00 Toasts properly Size (25%) 9.00 Speed of toasting Toaster capacity Appearance Easy to clean (56%) 1.60 (10%) Inside Current Gap $ 4.20 $ 0.20 12.00 1.80 0.70 3.00 0.20 0.50 (3%) $ 15.10 $ 18.70 $ 3.60 (94%) 0.20 Target $0.90 (6%) $ 0.90 (6%) Outside Current Gap $ 1.00 $0.10 $ 1.00 S 0.10 Target $ 4.00 (25%) 9.00 (56%) 1.60 (10%) 0.90 (6%) 0.50 (3%) $16.00 Total Current Gap $4.20 $0.20 12.00 1.80 3.00 0.20 1.00 0.10 0.70 0.20 $19.70 $3.70 The toaster company through value engineering and continuous improvement plans to determine a way to reach the target cost by looking at the products life cycle and its value chain activities to determine where to reduce costs. Step 1-- Product Functional Cost analysis Nebraska Toaster Company plans to implement functional analysis to target areas of cost reduction. Here the company breakdowns the current $12.00 manufacturing costs (from Table 1 "Manufacturing" row and "Total Current" column) for the toaster oven by the components' estimated costs and functions performed. The result is in Table 2. Table 2 Product Functional Cost Analysis Component Heating Unit Display Light Lever Spring Coil Temperature Control Timer Body Design Crumb and Grease Catcher TOTAL Function Toast bagels or grill sausages Indicates the process of toasting or grilling Lowers bagels or sausages into toaster & initiates toasting or grilling Pops up bagels or sausages when toasted or grilled Controls degree of toasting or grilling Holds bagels or sausages Catches crumbs and greases & is removable for cleaning Current Cost Table 3 Customer Requirement Analysis $2.40 1.60 0.60 0.60 0.60 5.10 1.10 $12.00 % of Cost 100% 20 13 5 5 5 43 9 The Nebraska Toaster Company plans to rank the features of the new bagel toaster according to customer preferences and requirements, in Step 2. Step 2 -- Customer Requirement Analysis Nebraska Toaster Company selected a customer focus group to rank the six most important characteristics or requirements as shown in Table 3. Customer Requirements Toasts and grills properly Size Speed of teasting or grilling Toaster oven capacity Appearance Easy to clean TOTAL Customer Ranking Ranking is from 1-5, 5 the most important 5 3 3 2 1 4 Relative Ranking % Raw Score 18 5 3 3 2 I 4 28 17 17 11 5 22 100 The customers rank the criteria -- toast or grill properly, cleaning, and size -- as the most important relative to the other customer characteristics or requirements. The next process compares the customer requirement features to the component functions. Step 3 -- Quality Function Development Analysis Nebraska Toaster Company engineers assessed the new toaster oven product's functional performance as shown in Table 4. Table 4 Quality Functional Performance Assessment Components or Functions Customer Requirements Toasts properly Size Speed of toasting Toaster capacity Appearance Easy to clean Required: Heating Unit 50% 50% 70% 30% 50% Display Light 20% Lever Spring Coil 20% 5% I 20% Temp. Control & Timer 10% 10% Body Design 50% 20% 60% 80% 45% Crumb Catcher 5% 5% Total 100% 100% 100% 100% 100% 100% 1. Calculate the target cost for the toaster 2. Using the information above, develop a ranking of product functions that gives the company the importance and value of each component relative to the features that create value to the customer.
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a The target cost for the toaster is 1600 Show your working please 1600 20 x 800... View the full answer
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