As the Strategic Manager of CutRite Scissors, You Are Tasked

question 69

Multiple Choice

As the strategic manager of CutRite Scissors, you are tasked with producing a strategy for introducing a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and sells them for $12. Because your company has inferior production capabilities, your scissors will cost $3 each to produce. However, your handle is proven to be more comfortable than your competitors'. Assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage?

• A) Reduce the quality of materials used in CutRite scissors to bring unit costs down to $1, then sell the scissors for $12.
• B) Continue to produce CutRite scissors for $3 but set the price at $10.
• C) Offer a buy-one-get-one-free sale on CutRite scissors.
• D) Market CutRite scissors as a higher-quality alternative and sell them for $15.

Distinguish between probability calculations for continuous and discrete random variables.

Calculate probabilities using the probability density function for continuous random variables.

Understand the application of continuous distributions in approximating discrete variables.

Realize the role of non-negativity and the integral's value in defining a probability density function.

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Definitions:

Compounded Semi-Annually

Concerns the process where the interest earned on an investment is added to the principal twice a year, allowing the interest to earn interest.

Rate of Return

Indicates the percentage of profit or loss on an investment over a specific time period, expressing the gain or loss in comparison to the investment's cost.

Initial Investment

The amount of money used to start a project, purchase an asset, or invest in a financial instrument.

Rate of Return

The capital gain or loss realized on an investment over an allocated period, defined as a percentage of the investment’s preliminary cost.