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Bochenski Mechanical Corporation Has Developed a New Industrial Grinder-Model UF-48-That

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Essay

Bochenski Mechanical Corporation has developed a new industrial grinder-model UF-48-that has been designed to outperform a competitor's best-selling industrial grinder. Model UF-48 has a useful life of 80,000 hours of service and its operating cost is $1.95 per hour. In contrast, the competitor's product has a useful life of 20,000 hours of service and has operating costs that average $2.75 per hour. The competitor's industrial grinder sells for $148,000. Bochenski has not yet established a selling price for model UF-48.
Required:
From a value-based pricing standpoint what is the differentiation value offered by model UF-48 relative to the competitor's offering for each 80,000 hours of service?


Definitions:

Ethical Development

The process of establishing and applying moral standards and principles within individuals, organizations, or societies.

Preconventional

A stage in Kohlberg's theory of moral development where an individual's moral reasoning is based primarily on consequences of actions and external rewards or punishments.

Own Interests

Personal advantages or benefits that drive individual actions, choices, or motivations.

Ethical Development

The process of learning and applying concepts of right and wrong behavior, influenced by personal, societal, and situational factors.

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