Wermers Industries Incorporated Has Developed a New Drill Press, Model

question 383

Multiple Choice

Wermers Industries Incorporated has developed a new drill press, model LS-88, that is designed to offer superior performance to a comparable drill press sold by Wermers's main competitor. The competing drill press sells for $31,000 and needs to be replaced after 1,000 hours of use. It also requires $6,000 of preventive maintenance during its useful life. ModelLS-88'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 $7,000 of preventive maintenance during its useful life.From a value-based pricing standpoint what range of possible prices should Wermers consider when setting a price for model LS-88?

• A) $36,000 ≤ Value-based price ≤ $62,000
• B) $31,000 ≤ Value-based price ≤ $62,000
• C) $31,000 ≤ Value-based price ≤ $67,000
• D) $36,000 ≤ Value-based price ≤ $67,000

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Definitions:

Outsource Call Centers

involves contracting an external service provider to manage customer service and support functions, including handling calls, emails, and chat services.

Independent Supply Chains

Systems or networks operating autonomously without reliance on or integration with external entities.

Highest Implied Uncertainty

A condition in decision-making where the highest level of uncertainty exists, making it challenging to predict outcomes accurately.

Customer Segments

The division of potential or existing customers into groups based on shared characteristics, to tailor marketing strategies and product offerings more effectively.