Why target costing can be valuable approach to pricing

Assignment Help Operation Management

Reference no: EM132178662

Our Lakewood facility would benefit from an additional unit (NPV=$10,000). We could buy the new unit for $6,000 or relocate a unit from another facility for $5,000. You decide to relocate a unit. While it is in transit an accident results in the destruction of the unit. There was no insurance on the unit or the transit. The accountant tells you that if you now buy the additional unity, then $11,000 will all be allocated to the project causing it to show a loss. What do you do? Shrink the decision rights of the person who did not buy insurance. Do the best you can without the additional unit. Buy the additional unit. What would you do and why?

Describe why Target Costing can be an valuable approach to pricing, a new to your company, but not the industry, product.

Pick one or 2 steps of the 7 steps in the decision-making process and describe what you have learned that will make you a more conscious decision maker.

Reference no: EM132178662

Questions Cloud

Recording the song without any potential liability : Given the lack of a visible copyright and the death of the writer, are you good to go in terms of recording the song without any potential liability?

Subcontractor stole valuable painting from their house : One of your clients complains that an employee of the subcontractor stole a valuable painting from their house. Would you be liable for this theft?

Payment or not based on the concepts of agency law : Do you think you would be liable for this payment or not based on the concepts of agency law?

Discuss three different jury members perception : Discuss three different Jury Members “Perception” of the accused murderer- Why do they have different views?

Why target costing can be valuable approach to pricing : Describe why Target Costing can be an valuable approach to pricing, a new to your company, but not the industry, product.

Beset by overly optimistic bias at their inception : Research has shown that large scale projects are beset by an overly optimistic bias at their inception.

Rapidly growing market segment of very old consumers : Imagine for a moment that you’re in charge of marketing mp3 players to the rapidly growing market segment of very old consumers. What hurdles might you face?

Consequences of each what if situation and who is affected : What are the consequences of each "what if" situation and who is affected? Describe how each of the suggested "what if" challenges could be overcome.

Describe the four elements of the marketing mix : Describe the four elements of the marketing mix. What role does each element play in delivering value to customers?

User Account

All Pages