I think a good Industrial Design student assignment, particularly for sophomores, would be: Design and make a set of minimalist chess pieces--no digital fabrication nor individual sculpting/carving (unless making the pattern for a mold) allowed. This would cover a lot of skills that industrial designers need to develop.

Sketching: What is the minimum amount of form/gesture/surfacing required to have an object read as the six different types of chess pieces?

Materials: What materials can you easily source and, most importantly, batch-produce using the tooling available in the shop?

Manufacturing: What repeatable process will you use to make your pieces? A table saw with jigs? Lost-wax casting? Soldering of cut metal pieces?

I probably wouldn't ask them to make the board, as I think they'd have their hands full designing and making the pieces.

Minimalist chess sets exist in the real world, and a lot of them look like they could've been designed and made by a first-year ID student. Some cases in point:

This Check-Chess Set (no longer made) by design studio Origins.

This Mid Century Modern set by Heyimamaker on Instructables.

This unnamed chess set by Schichtwunder Designs. While this one was 3D-printed, as previously mentioned I'd not permit digital fabrication, so that the students could develop hand skills. I would allow them to carve or sculpt workpieces if they were going to make a mold from them, but I'd not allow them to simply carve the finished product; the idea is for the students to learn about repeatable manufacturing processes.

Another Mid Century Modern set, this one by Nordeast Design Co.

This York Chess Set offered by Chess Baron.

This Bauhaus Style chess set by boardgame manufacturer Manopoulos.

I know the bulk of these are made out of wood, which I'm sure many students would opt for, but I'd also encourage them to investigate metal, ceramics, and whatever else the school's ID shop is equipped to work with.

If you're an ID professor and you actually assign this, be sure to keep us posted—we'll happily post the results here.