Thoen Heavy Machinery Corporation Has Developed a New Drill Press-Model

question 317

Essay

Thoen Heavy Machinery Corporation has developed a new drill press-model OU-84-that has been designed to outperform a competitor's best-selling drill press. The competitor's product has a useful life of 30,000 hours of service, has operating costs that average $1.60 per hour, and sells for $189,000. In contrast, model OU-84 has a useful life of 120,000 hours of service and its operating cost is $1.00 per hour. Thoen has not yet established a selling price for model OU-84.
Required:
From a value-based pricing standpoint what range of possible prices should Thoen consider when setting a price for model OU-84?

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Definitions:

Naturally Induced

describes processes or responses initiated by natural factors or stimuli without human intervention.

Gamma Globulin

A class of globulins in blood plasma that includes most of the antibodies or immunoglobulins, playing a critical role in immune responses.

Inflammatory Response

A biological response to harmful stimuli, such as pathogens or damaged cells, characterized by redness, heat, swelling, and pain.

Class II MHC

Molecules found on the surface of certain immune cells that present processed antigens to helper T cells, playing a critical role in the immune response.