Schimpf Industries Incorporated Has Developed a New Grinder, Model WC-13

question 139

Multiple Choice

Schimpf Industries Incorporated has developed a new grinder, model WC-13, that is designed to offer superior performance to a comparable grinder sold by Schimpf's main competitor. The competing grinder sells for $24,000 and needs to be replaced after 1,000 hours of use. It also requires $2,000 of preventive maintenance during its useful life. Model WC-13's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 4,000 hours of use and it requires $5,000 of preventive maintenance during its useful life.From a value-based pricing standpoint what range of possible prices should Schimpf consider when setting a price for model WC-13?

• A) $24,000 ≤ Value-based price ≤ $99,000
• B) $75,000 ≤ Value-based price ≤ $96,000
• C) $24,000 ≤ Value-based price ≤ $96,000
• D) $75,000 ≤ Value-based price ≤ $99,000

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Definitions:

Airline Pilots

Trained professionals who operate aircraft, navigating flights across various distances.

Air Travel

The act of transportation by aircraft, including commercial flights, private planes, and other forms of flying.

Variable Input

An input in the production process that can be adjusted in the short run to change the level of output.

Total Output

The total quantity of goods and services produced by an economy, a sector, or a company during a given period.