Question

Reducing the number of new product ideas based on specific criteria is a function of product _______, whereas determining the profitability of those ideas is a function of product _______.

Answer 1

Product screening is the process of reducing product ideas based on criteria, while product evaluation involves determining their profitability, which includes cost/benefit analysis and accounting for economic principles such as scarcity and tradeoffs.

Step-by-step explanation:

Reducing the number of new product ideas based on specific criteria is a function of product screening, whereas determining the profitability of those ideas is a function of product evaluation.

In a structured decision process, ideas are evaluated against set constraints and compared using established criteria, selecting the concept that best meets the project goals for product implementation. Meanwhile, a cost/benefit analysis helps in making economical decisions by weighing the marginal costs against marginal benefits, a fundamental tool to ascertain the financial feasibility of a product concept.

Understanding economic concepts such as scarcity and tradeoffs is crucial in the product development process. Scarcity dictates that there are limits to the resources available, and tradeoffs involve forgoing a certain quantity of one good to obtain more of another. This dynamic is essential to consider when screening and evaluating new product ideas.

Answer 2

Product screening is the process of narrowing down product ideas, whereas product evaluation and analysis determine profitability through cost/benefit analysis.

Step-by-step explanation:

Reducing the number of new product ideas based on specific criteria is a function of product screening, whereas determining the profitability of those ideas is a function of product evaluation and analysis.

Product screening involves a structured decision process, where each product concept is evaluated against constraints and compared using criteria to select the best concept for implementation.

On the other hand, product evaluation and analysis often includes conducting a cost/benefit analysis where marginal costs are weighed against marginal benefits, and decisions are made based on the relative trade-offs and scarcity of resources.

Key Themes Related to Product Screening and Evaluation

• Scarcity: The limitation of resources, which means choices must be made about their allocation
• Tradeoffs: The process of giving up one thing to gain another, which is often depicted in budget constraints or production possibilities frontiers (PPF)
• Cost/Benefit Analysis: A tool used in product evaluation to compare costs against benefits