Tavis Robotics Corporation Has Developed a New Robot-Model FI-73-That Has

question 169

Multiple Choice

Tavis Robotics Corporation has developed a new robot-model FI-73-that has been designed to outperform a competitor's best-selling robot. The competitor's product has a useful life of 10,000 hours of service, has operating costs that average $4.60 per hour, and sells for $109,000. In contrast, model FI-73 has a useful life of 30,000 hours of service and its operating cost is $2.60 per hour. Tavis has not yet established a selling price for model FI-73.From a value-based pricing standpoint what is the differentiation value offered by FI-73 relative to the competitor's offering for each 30,000 hours of service?

• A) $60,000
• B) $187,000
• C) $278,000
• D) $155,000

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Definitions:

Peristalsis

Rhythmic waves of muscular contraction and relaxation in the walls of hollow tubular organs, such as the ureter or parts of the digestive tract, that serve to move the contents through the tube.

Digestive Tract

The series of hollow organs joined in a long, twisting tube from the mouth to the anus, through which food is digested and nutrients absorbed.

Chief Cells

Cells located in the stomach that secrete pepsinogen, an enzyme precursor that plays a key role in digestion.

Pepsinogen

The precursor of pepsin; secreted by chief cells in the gastric glands of the stomach.