Asked by Jhane Hemingway on Jul 11, 2024
Verified
Morice Industries Incorporated has developed a new injection mold, model IA-05, that is designed to offer superior performance to a comparable injection mold sold by Morice's main competitor. The competing injection mold sells for $54,000 and needs to be replaced after 1,000 hours of use. It also requires $7,000 of preventive maintenance during its useful life. Model IA-05's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 2,000 hours of use and it requires $8,000 of preventive maintenance during its useful life.From a value-based pricing standpoint what range of possible prices should Morice consider when setting a price for model IA-05?
A) $54,000 ≤ Value-based price ≤ $114,000
B) $54,000 ≤ Value-based price ≤ $108,000
C) $60,000 ≤ Value-based price ≤ $114,000
D) $60,000 ≤ Value-based price ≤ $108,000
Value-Based Pricing
A pricing strategy where prices are set primarily on the perceived value to the customer, rather than on the actual cost of production or historical prices.
Preventive Maintenance
Routine maintenance and inspections of equipment and facilities to prevent unexpected breakdowns and to ensure efficient operation.
Useful Life
The estimated duration of time over which an asset is expected to be usable by an organization, influencing depreciation calculations.
- Assess the unique benefits provided by a product compared to its market rivals.
Verified Answer
Learning Objectives
- Assess the unique benefits provided by a product compared to its market rivals.
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