Tim Is the Production Manager at a Steel Factory

question 13

Multiple Choice

Tim is the production manager at a steel factory. One of the steel processing machines in the factory has broken down and has to be replaced. Tim decides to buy a new machine from a company that he has read reviews of in industry magazines, even though there are other companies offering a discount on machines with better functionality. This is an example of how managers are constrained by _____.

• A) bounded rationality
• B) escalation of commitment
• C) risk propensity
• D) groupthink
• E) political forces

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Definitions:

Premium Item

A premium item is a product or service offered at a higher quality and price point, often perceived as being of higher value than standard offerings.

Price-insensitive Product

Products for which demand remains relatively constant regardless of changes in price, often due to unique attributes or lack of substitutes.

Product-line Pricing

A marketing strategy where a company sets different price points for various products in the same product line based on features, materials, or other value points to target different consumer segments.

Product-line Pricing

A marketing strategy that involves setting different prices for various items in a product line based on their features, costs, or market demand.