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Lecture 2

PRODUCT AND PRODUCTION SYSTEM

SHAH MD ASHIQUZZAMAN NIPU


ASSISTANT PROFESSOR
IPE, MPE, AUST
Product and Production

 A product is a set of attributes offered to consumers to fulfill their


needs or requirements.

 Production is the processes and methods employed to transform


tangible inputs (raw materials, semi-finished goods) and intangible
inputs (ideas, information, knowledge) into goods or services.
Types of
Product
Product Life Cycle

 As consumers, we buy millions of products every year. And


just like us, these products have a life cycle. Older, long-
established products eventually become less popular, while
in contrast, the demand for new, more modern goods
usually increases quite rapidly after they are launched. The
product life cycle has 4 very clearly defined stages,
Product Life Cycle (cont…)
Product Life Cycle (cont…)

Product Cycle: A description of the presence or behavior of a product in the marketplace over time
The phases of the product cycle (five)-
 Development stage: In the development stage, there are no sales the product is being
created and is not available.
 Introduction stage: The introduction stage starts with the first sale and then sales begin to
grow.
 Growth stage: This is the period of rapid growth in sales for the product.
 Maturity stage: This phase is characterized by growth as well, but the sales growth is
decelerating. Sales volume reaches its maximum at the end of the maturity stage.
 Decline stage: This phase represents the period of declining sales they may still be very
high, but they are declining.
Product Life Cycle (cont…)

For many products, the product cycle has shortened/elongated - In the field of Laptop computers there is
the need to have the fastest, lightest, and smallest laptop with the longest battery life making the existing
one obsolete and shorten the life.
For ballpoint pen for example has a longer product cycle. The need to write is addressed by the almost
unchanging technology inside of the pen. This product could possibly never become obsolete, this
would mean that the product cycle could never end.
 The production
system can be
viewed as a
framework or skeleton Production System
of activities within
which the creation of
value can occur.
 At one end of the
production system
are the inputs and at
the other end are
outputs.
 Connecting the inputs
and outputs are a
series of operations or
processes, storages
and inspections.
System Concepts of Production

System concept of Production:

Raw Materials

Output
Input
Labors Transformation/ Goods/
conversion process Services
Equipment

Capital

Feedback Information
Schematic Representation of Production System
Types of Production System

◼ Based on Product-Process Type


◼ Based on Materials Flow
◼ Based on Customer Order Policy
◼ Based on Lot Size or Batch Size
Types of Production System

◼ Based on Product-Process type


 Discrete Manufacturing
◼ Products and its parts are separately identifiable, can be
counted, disassembled
◼ Input: Parts/Components
◼ Example: TV, Shirt
 Process Manufacturing
◼ Products are not separately identifiable, cannot be counted
until packetized
◼ Input: Ingredients
◼ Example: Chemical, Food products such as Lotions, Juice
Types of Production System (cont…)

◼ Based on Materials Flow


 Intermittent/Discontinuous Flow Manufacturing
◼ Jobs pass through the production process in lots
(batches) and move one step to the next step as a
group
◼ Example: Tailor shop, Job shop

 Continuous Flow Manufacturing


◼ Materials flow continuously through the production
system without interruption
◼ Example: Sugar Production, Oil Refining
Types of Production System (cont…)

◼ Based on Customer Order Policy


 Make-to-Stock (MTS)
◼ Example: TV, Pencil, Refrigerator
 Make-to-Order (MTO)
◼ Example: Tailor shop, Furniture
 Assemble-to-Order (ATO)
◼ Example: Computer
 Engineer-to-Order (ETO)
◼ Example: Building, Formula One Racing Car
Types of Production System (cont…)

◼ Based on Lot Size or Batch Size


 Job Shop
◼ Product variation – high
◼ Lot Size – small
 Batch Production
◼ Product variation – low
◼ Lot Size – large
 Mass Production
◼ Quantity produced – huge
◼ Involves “Economies of Scale”

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