Shoun Mechanical Corporation Has Developed a New Industrial Grinder-Model QJ-47-That

question 49

Multiple Choice

Shoun Mechanical Corporation has developed a new industrial grinder-model QJ-47-that has been designed to outperform a competitor's best-selling industrial grinder. Model QJ-47 has a useful life of 120,000 hours of service and its operating cost is $0.60 per hour. In contrast, the competitor's product has a useful life of 30,000 hours of service and has operating costs that average $0.90 per hour. The competitor's industrial grinder sells for $129,000. Shoun has not yet established a selling price for model QJ-47.From a value-based pricing standpoint what is QJ-47's economic value to the customer over its 120,000 hour useful life?

• A) $423,000
• B) $552,000
• C) $156,000
• D) $201,000

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Definitions:

Risky Shift

The phenomenon where groups make riskier decisions than individuals would, due to the diffusion of responsibility and other factors.

Decision Polarization

The phenomenon where a group's decisions become more extreme than the individual members' initial positions, often after a discussion or deliberation process.

Deindividuation

A psychological state in which an individual loses self-awareness and self-restraint, often in group settings.

Social Compliance

The act of adhering to the rules, standards, or laws of society or a specific group, often to fit in or be accepted by the group.