Hilfiger Industries Incorporated Has Developed a New Forklift, Model UH-40

question 233

Multiple Choice

Hilfiger Industries Incorporated has developed a new forklift, model UH-40, that is designed to offer superior performance to a comparable forklift sold by Hilfiger's main competitor. The competing forklift sells for $96,000 and needs to be replaced after 1,000 hours of use. It also requires $9,000 of preventive maintenance during its useful life. Model UH-40's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 2,000 hours of use and it requires $13,000 of preventive maintenance during its useful life.From a value-based pricing standpoint what is model UH-40's economic value to the customer over its 2,000 hour life?

• A) $114,000
• B) $197,000
• C) $101,000
• D) $192,000

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Definitions:

Culture Shock

Perpetual stress experienced by people who settle overseas

Training Transfer

The effective application of skills and knowledge gained through training to the workplace or job functions.

Pay Banding

A method used by organizations to categorize and define the range of compensation given to employees based on their role, skills, or level within the company.

Systems Approach

A way of thinking that considers an organization or process as a set of interconnected parts or systems to analyze and solve problems.