Aboud Industrial Products Incorporated has developed a new industrial high pressure pump, model ON-28, that is designed to offer superior performance to a comparable high pressure pump sold by Aboud's main competitor. The competing high pressure pump sells for $87,000 and needs to be replaced after 1,000 hours of use. It also requires $15,000 of preventive maintenance during its useful life. Model ON-28's performance capabilities are similar to the competing high pressure pump with two important exceptions-it needs to be replaced only after 3,000 hours of use and it requires $31,000 of preventive maintenance during its useful life.
Required:
From a value-based pricing standpoint what range of possible prices should Aboud consider when setting a price for model ON-28?

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The Answer of Aboud Industrial Products Incorporated has developed a new industrial high pressure pump, model ON-28, that is designed to offer superior performance to a comparable high pressure pump sold by Aboud's main competitor. The competing high pressure pump sells for $87,000 and needs to be replaced after 1,000 hours of use. It also requires $15,000 of preventive maintenance during its useful life. Model ON-28's performance capabilities are similar to the competing high pressure pump with two important exceptions-it needs to be replaced only after 3,000 hours of use and it requires $31,000 of preventive maintenance during its useful life.
Required:
From a value-based pricing standpoint what range of possible prices should Aboud consider when setting a price for model ON-28?

Aboud Industrial Products Incorporated Has Developed a New Industrial High