Question: lulure in use for suppliers' current product, value-in-use is defined as the price that would make a customer the current product versus switching to another

lulure in use for suppliers' current product, value-in-use is defined as the price that would make a customer the current product versus switching to another option. indifferent between continuing to use maximum amount the customer would be willing to pay for the new product given the extra benefits that it offers. For a new product, VIU is the

1. Suppose a chemical plant uses 200 O-rings to seal valves on pipes that carry corrosive The plant pays $5 for each O-ring and must change them during regular maintenance months. However, a new product has twice the resistance to corrosive materials. the value-in-use (VIU) of the new material. (4 points)

2. Suppose that materials. every two Determine the new material allows a longer time between maintenance shutdowns-four months versus two months-and the cost of a shutdown is $5000. Determine the new VIU with this additional information. (4 points)

What might be the other issues/costs related to adopting the new product that can impact the value of the new product to the customer? (please mention some factors that we cannot measure using the given data) (2 Points)

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ValueinUse VIU of the New ORing Material 1 VIU based on lifespan The new Oring has twice the lifespan of the existing one lasting 8 months instead of ... View full answer

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