PLM's Managers Are Attempting to Build a New Product, a Better

question 85

Multiple Choice

PLM's managers are attempting to build a new product, a better mousetrap. They began by determining the features customers wanted and what they would pay for those features. PLM's engineers then reverse-engineered a competitor's product to understand its design and related production processes. Their analysis indicated that customers would pay $10.00 for a better mousetrap. Why was it important for PLM's engineers to understand the product design and production processes of its competitor?

• A) They needed to explain them to customers to justify the better mousetrap's cost
• B) The better mousetrap will only succeed if it is identical to their competitor's product
• C) Most of the mousetrap's product costs are committed by that point in the value chain
• D) Understanding product design and production processes is not typically important; the engineers just wanted to better understand the process.

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Definitions:

Nominal Interest Rate

The nominal interest rate represents the rate of interest before adjustments for inflation, indicating the percentage increase in money lenders earn or borrowers pay over a specific period.

Real Interest Rate

The interest rate that has been modified to account for inflation, indicating the actual cost of borrowing or the true earnings from savings.

Inflation Rate

This is the percentage rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Nominal Interest Rate

The percentage increase in money that borrowers pay lenders, not adjusted for inflation.