PROBLEM 1. TARGET COSTING & QFD. SHOTGUN WEDDING PICS TABLE 1 Criteria Fast Service Getting Good Photos Quality of Photo Finishing Quality of Photo Books Customer Rating 40 120 80 60 300 $ TABLE 2 Activities Planning Meeting Take Photos Prepare Proofs Prepare Photo Book Average Cost 1,000 2,000 700 1,300 5,000 $ TABLE 3 Activity/ Criteria Planning Meeting Take Photos Prepare Proofs Prepare Photo Book Fast Service 30% 5% 35% 30% 100% Good Photos 40% 60% 0% 0% 100% Finishing 0% 0% 50% 50% 100% Book Quality 35% 15%! 0%- 50%- 100% PROBLEM 1. TARGET COSTING; QUALITY / FUNCTION DEPLOYMENT (VALUE ANALYSIS). (15%) Shotgun Wedding Pics (SWP) specializes in preparing wedding pictures, including a large book of photos for the wedding couple. Each couple works directly with a single SWP photographer who helps the couple plan the photos to be made on the wedding day. The standard fee for each wedding is $6,000 which includes all of the firm's services including the book of wedding photos. SWP is experiencing increased competition, especially based on price competition, from recently formed photography firms. SWP wants to protect its reputation and to continue to grow its business, and for this purpose has decided to use Quality Function Deployment (QFD) to better understand the cost and value trade-offs in its business. As a first step, SWP defined the four key buying criteria that couples use in choosing and evaluating photographers - fast service, getting great photos at the wedding, the quality of the photo finishing (color, clarity, etc.), and the quality of the photo book. A select sample of prior customers were asked to rate these criteria and, on a 300-point scale, provided scores of 40, 120, 80, and 60, respectively. The SWP accounting records showed that the average weekly cost of $5,000 could be traced to four activities: (1) planning meeting in which the couple and the photographer determined what types of photos were desired, set dates for the photography and proofs, etc., (2) photography on the wedding day, (3) preparation of proofs from which the couple would select the photos to be used in the book, and (4) the preparation of the final photos and the wedding photo book. The average costs of the four activities were $1,000, $2,000, $700, and $1,300, respectively. As a final step, SWP managers, photographers, and staff worked together to determine an estimate of the contribution of each of the four activities to achieving the four buying criteria. The result is as follows: Activity/Criteria Fast Service Great Photos Finishing Quality Book Quality Planning Meetinge 30% 40% 0% 35% Take Photos 5% 60% 15% Prepare Proofs 35% 0% 50% 0% Prepare Photo Book 30% 0% 50% 50% 100% 100% 100% 100% 0% REQUIRED: Use the Excel worksheet provided with the exam to provide support for answering the following questions. Be sure to write your answers in the boxes below each question. 1. Using the information provided in the tables in the related worksheets, compute: a) the importance index for each component of the product, b) the cost index of each component, and c) the value index of each component. Put your answers in the box below. Importance Index - Cost Index - Value Index - PROBLEM 1. TARGET COSTING & QFD. SHOTGUN WEDDING PICS TABLE 1 Criteria Fast Service Getting Good Photos Quality of Photo Finishing Quality of Photo Books Customer Rating 40 120 80 60 300 $ TABLE 2 Activities Planning Meeting Take Photos Prepare Proofs Prepare Photo Book Average Cost 1,000 2,000 700 1,300 5,000 $ TABLE 3 Activity/ Criteria Planning Meeting Take Photos Prepare Proofs Prepare Photo Book Fast Service 30% 5% 35% 30% 100% Good Photos 40% 60% 0% 0% 100% Finishing 0% 0% 50% 50% 100% Book Quality 35% 15%! 0%- 50%- 100% PROBLEM 1. TARGET COSTING; QUALITY / FUNCTION DEPLOYMENT (VALUE ANALYSIS). (15%) Shotgun Wedding Pics (SWP) specializes in preparing wedding pictures, including a large book of photos for the wedding couple. Each couple works directly with a single SWP photographer who helps the couple plan the photos to be made on the wedding day. The standard fee for each wedding is $6,000 which includes all of the firm's services including the book of wedding photos. SWP is experiencing increased competition, especially based on price competition, from recently formed photography firms. SWP wants to protect its reputation and to continue to grow its business, and for this purpose has decided to use Quality Function Deployment (QFD) to better understand the cost and value trade-offs in its business. As a first step, SWP defined the four key buying criteria that couples use in choosing and evaluating photographers - fast service, getting great photos at the wedding, the quality of the photo finishing (color, clarity, etc.), and the quality of the photo book. A select sample of prior customers were asked to rate these criteria and, on a 300-point scale, provided scores of 40, 120, 80, and 60, respectively. The SWP accounting records showed that the average weekly cost of $5,000 could be traced to four activities: (1) planning meeting in which the couple and the photographer determined what types of photos were desired, set dates for the photography and proofs, etc., (2) photography on the wedding day, (3) preparation of proofs from which the couple would select the photos to be used in the book, and (4) the preparation of the final photos and the wedding photo book. The average costs of the four activities were $1,000, $2,000, $700, and $1,300, respectively. As a final step, SWP managers, photographers, and staff worked together to determine an estimate of the contribution of each of the four activities to achieving the four buying criteria. The result is as follows: Activity/Criteria Fast Service Great Photos Finishing Quality Book Quality Planning Meetinge 30% 40% 0% 35% Take Photos 5% 60% 15% Prepare Proofs 35% 0% 50% 0% Prepare Photo Book 30% 0% 50% 50% 100% 100% 100% 100% 0% REQUIRED: Use the Excel worksheet provided with the exam to provide support for answering the following questions. Be sure to write your answers in the boxes below each question. 1. Using the information provided in the tables in the related worksheets, compute: a) the importance index for each component of the product, b) the cost index of each component, and c) the value index of each component. Put your answers in the box below. Importance Index - Cost Index - Value Index