Airtight Manufacturing produces plastic cases that utility companies buy to protect electronic components on utility poles...
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Airtight Manufacturing produces plastic cases that utility companies buy to protect electronic components on utility poles from weather damage. (a) The protective case currently used by utility companies has a 0.035 probability of cracking or breaking in any given year. When a protective case cracks or breaks, the utility company incurs a $600 expense to repair that utility pole. What is the expected value of the utility company's repair costs per utility pole? Show your work. (b) Airtight has recently developed a stronger material for its protective case. The use of this stronger material reduces the case's probability of cracking or breaking, and serves as a differentiating factor for estimating this product's VTC. Use the product-needs matrix described in the course to classify this differentiating factor. What type of product characteristic is it? What type of customer need does it satisfy? Justify your answers. (c) If this stronger material enables Airtight's new protective case to have a 0.015 probability of cracking or breaking in any given year, then what is the value to a utility company of this stronger- material differentiating factor? Show your calculations. Airtight Manufacturing produces plastic cases that utility companies buy to protect electronic components on utility poles from weather damage. (a) The protective case currently used by utility companies has a 0.035 probability of cracking or breaking in any given year. When a protective case cracks or breaks, the utility company incurs a $600 expense to repair that utility pole. What is the expected value of the utility company's repair costs per utility pole? Show your work. (b) Airtight has recently developed a stronger material for its protective case. The use of this stronger material reduces the case's probability of cracking or breaking, and serves as a differentiating factor for estimating this product's VTC. Use the product-needs matrix described in the course to classify this differentiating factor. What type of product characteristic is it? What type of customer need does it satisfy? Justify your answers. (c) If this stronger material enables Airtight's new protective case to have a 0.015 probability of cracking or breaking in any given year, then what is the value to a utility company of this stronger- material differentiating factor? Show your calculations.
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Related Book For
OM operations management
ISBN: 978-1285451374
5th edition
Authors: David Alan Collier, James R. Evans
Posted Date:
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