Ralph Plastics Equipment Corporation has developed a new injection mold-model IX-94-that has been designed to outperform a competitor's best-selling injection mold. Model IX-94 has a useful life of 50,000 hours of service and its operating cost is $2.00 per hour. In contrast, the competitor's product has a useful life of 10,000 hours of service and has operating costs that average $3.50 per hour. The competitor's injection mold sells for $129,000. Ralph has not yet established a selling price for model IX-94.
Required:
From a value-based pricing standpoint what is model IX-94's economic value to the customer over its 50,000 hour useful life?

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The Answer of Ralph Plastics Equipment Corporation has developed a new injection mold-model IX-94-that has been designed to outperform a competitor's best-selling injection mold. Model IX-94 has a useful life of 50,000 hours of service and its operating cost is $2.00 per hour. In contrast, the competitor's product has a useful life of 10,000 hours of service and has operating costs that average $3.50 per hour. The competitor's injection mold sells for $129,000. Ralph has not yet established a selling price for model IX-94.
Required:
From a value-based pricing standpoint what is model IX-94's economic value to the customer over its 50,000 hour useful life?

Ralph Plastics Equipment Corporation Has Developed a New Injection Mold-Model