"Trueba Electronics Corporation" Has Developed a New Testing Instrument-Model JJ-92-That

question 18

Essay

"Trueba Electronics Corporation" has developed a new testing instrument-model JJ-92-that has been designed to outperform a competitor's best-selling instrument. Model JJ-92 has a useful life of 100,000 hours of service and its operating cost is $0.50 per hour. In contrast, the competitor's product has a useful life of 20,000 hours of service and has operating costs that average $0.80 per hour. The competitor's instrument sells for $109,000. "Trueba" has not yet established a selling price for model JJ-92.
Required:
From a value-based pricing standpoint:
a. What is the reference value that "Trueba" should consider when pricing model JJ-92?
b. What is the differentiation value offered by model JJ-92 relative to the competitor's offering for each 100,000 hours of service?
c. What is model JJ-92's economic value to the customer over its 100,000 hour useful life?
d. What range of possible prices should "Trueba "consider when setting a price for model JJ-92?

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