Q) Profitable Design Decision

What component features should Tesla use in their design (for this question, we will assume that your choice is actually an automobile) in order to maximize profit. Refer to the morphological box below.

You have decided on six main features that define the product. All other features are produced at minimum cost, and thus are basic. There are no energizers. These six differentiator feature are add-on package choices:

motors,

performance,

software,

roominess,

suspensiion, and

paint-trim

Your marketing department has, through quizzing, determined your customers valuation of features (their Willingness to Pay or W-to-P) (maximum potential revenue) derived from sales meetings and quizzing; and

Your production department, through study of the supply side feature map, knows the cost of these features and marginal cost of adding or choosing each particular feature for the completed product.

The following table consolidates these marginal revenue / cost decisions in terms of the added unit sales dollars and added unit profitability (unit sales minus unit costs).

S = Sales Price

P = Profit (Sales-Cost)

Feature	S.mtr	P.mtr	S.perf	P.perf	S.sftwr	P.sftwr	S.room	P.room	S.spn	P.spn	S.pnt	P.pnt
1	450	100	450	100	300	50	4500	1150	450	100	450	150
2	1800	300	1050	300	450	100	6000	1250	1800	400	1050	200
3	3600	1000	1800	350	2400	350	6000	1700	3600	700	1800	450
4	6750	2100	5250	1200	5250	1550	6000	1750	6750	1000	infinity	0
5	7500	2000	6750	1500	14700	1150	6750	1750	7500	1650	infinity	0
6	9750	4350	6450	1600	11700	2750	16500	4750	12150	2650	infinity	0
7	10950	2950	3450	750	12150	3050	17700	4200	infinity	0	infinity	0
8	12900	3000	8400	2750	14100	2900	8850	1300	infinity	0	infinity	0
9	13500	3100	15000	4650	infinity	0	infinity	0	infinity	0	infinity	0
10	13650	3200	16500	4900	infinity	0	infinity	0	infinity	0	infinity	0

In addition, your accounting department has determined how overall sales price influences (reduces) sales volume

Volume (units) = 30000 Sales Price

It is important to note that:

Profit depends not just on unit profit, but the volume of sales

The more expensive the entire product, the lower the sales volume

There are infeasible choices where either sales price is infinite (no demand) or volume is negative (customers are returning cars faster than you sell them.

a) What is the feature set of your most profitable automobile?

Note: You need to choose the combination of feature choices that will yield the greatest profit. You have to use all of the components (it wouldnt be a complete automobile without all of them)

b) Is it high end, low-end, or intermediate?