Bellini Robotics Corporation Has Developed a New Robot-Model EM-28-That Has

question 305

Essay

Bellini Robotics Corporation has developed a new robot-model EM-28-that has been designed to outperform a competitor's best-selling robot. The competitor's product has a useful life of 30,000 hours of service, has operating costs that average $1.40 per hour, and sells for $129,000. In contrast, model EM-28 has a useful life of 90,000 hours of service and its operating cost is $0.80 per hour. Bellini has not yet established a selling price for model EM-28.
Required:
From a value-based pricing standpoint:
a. What is the reference value that Bellini should consider when pricing model EM-28?
b. What is the differentiation value offered by model EM-28 relative to the competitor's offering for each 90,000 hours of service?
c. What is model EM-28's economic value to the customer over its 90,000 hour useful life?
d. What range of possible prices should Bellini consider when setting a price for model EM-28?

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Definitions:

Agreeableness

A personality trait characterized by qualities such as kindness, cooperation, warmth, and consideration of others.

Empirically Derived Tests

Psychological tests developed by creating a large pool of items, then selecting those that discriminate between different groups of people based on empirical data.

Factor Analysis

A statistical method used to identify clusters of related variables and simplify data by reducing it to underlying factors.

Personality Traits

Enduring characteristics that describe an individual's behavior, thought patterns, and emotions.