Mounger Industrial Products Inc.has developed a new industrial forklift,model CZ-03,that is designed to offer superior performance to a comparable forklift sold by Mounger's main competitor.The competing forklift sells for $27,000 and needs to be replaced after 1,000 hours of use.It also requires $3,000 of preventive maintenance during its useful life.Model CZ-03's performance capabilities are similar to the competing forklift with two important exceptions-it needs to be replaced only after 4,000 hours of use and it requires $6,000 of preventive maintenance during its useful life.
Required:
From a value-based pricing standpoint what is the differentiation value offered by model CZ-03 relative to the competitor's forklift for each 4,000 hours of usage?

Question

Quizplus · Accepted Answer

The Answer of Mounger Industrial Products Inc.has developed a new industrial forklift,model CZ-03,that is designed to offer superior performance to a comparable forklift sold by Mounger's main competitor.The competing forklift sells for $27,000 and needs to be replaced after 1,000 hours of use.It also requires $3,000 of preventive maintenance during its useful life.Model CZ-03's performance capabilities are similar to the competing forklift with two important exceptions-it needs to be replaced only after 4,000 hours of use and it requires $6,000 of preventive maintenance during its useful life.
Required:
From a value-based pricing standpoint what is the differentiation value offered by model CZ-03 relative to the competitor's forklift for each 4,000 hours of usage?