IBurst Technology Is Developing a High-Speed Modem to Connect Notebook

question 78

Essay

iBurst Technology is developing a high-speed modem to connect notebook computers with iSun's satellite-based data network.The cross-functional team in charge of the project has assembled the following information:
$\begin{array}{|l|r|}\hline \text { Expected market price } & \$ 150 \\\hline \text { Required return on sales } & 20 \% \\\hline \text { Product life } & 3 \text { years } \\\hline \text { Currently feasible cost } & \$ 50,000,000 \\\hline \text { Expected average annual sales } & 100,000 \\\hline\end{array}$
Required:
a)Given the above information calculate the cost reduction target.
b)If the cross-functional team believes the cost of the modem cannot be reduced by any more than 18%,is this a feasible product for iBurst Technology? Why or why not?
c)Whether the cost reduction target is feasible or not,what can the cross-functional team do to further reduce cost?

---

Definitions:

Sensorimotor Stage

The Sensorimotor Stage is the first of Piaget's stages of cognitive development, ranging from birth to about age 2, where infants learn about the world through their senses and actions.

Piaget's Theory

A developmental theory by Jean Piaget that explains how children construct a mental model of the world through stages including sensorimotor, preoperational, concrete operational, and formal operational.

Motor Abilities

Skills and capacities that enable an individual to perform movements requiring physical coordination, strength, and precision.

Insecure Attachment

A type of attachment characterized by anxiety and uncertainty in relationships, often resulting from negative experiences in early development.