Question: Please show step by step process and kindly explain so that I will comprehend. Thank you. The Decision: How Many Versions of Modeler? By November
Please show step by step process and kindly explain so that I will comprehend. Thank you.


The Decision: How Many Versions of Modeler? By November 2008, the Modeler team had developed a beta version of the software and a crucial point had been reached in the product development effort: if CSC wanted to offer multiple product versions, it had to decide now; any postponement would result in a delay in the launch of the product and unnecessary additional costs. Even if a decision were soon made, additional software development would be required before the product would be ready for shipment. Exhibit 1 gives the estimated cost of completing the three versions of the product. The exhibit also gives the variable cost of reproducing and packaging each version of the software. In association with SMRG, Atkinson developed a marketing plan that targeted the five market segments identified in SMRG's analysis. Exhibit 1 gives the estimated expenditure for developing each market segment. Atkinson planned to sell Modeler directly to buyers in the first four market segments; for the "Student" segment, csc would sell through college bookstores, with the bookstore getting a 40% commission (and cSC netting 60% of the selling price). Kennedy, Stewards, and Atkinson had the data in Exhibit 1 in front of them. All three realized they had to come to a decision: Should csC offer one version of Modeler? Which one? Or two? Which two? Or all three? Exhibit 1 Cost, Demand, and Willingness-to-Pay Estimates
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