Questions and Answers
Product development investments only have a positive effect on the home region.
False
How many regions are there in NewShoes?
3
The contract bid always goes to the firm (or firms if a tie occurs) with the lowest bid.
True
How many periods of prior operations in NewShoes before you assumed control of the firm?
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New improved versions of your product are solely the result of amount and consistency of product development expenditures.
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How much does it cost to enter a new region?
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Advertising has the same effect in all regions.
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Given a 75% experience curve, if unit cost is $32 with cumulative production of 600,000, what will it be when cumulative production doubles to 1.2 million units?
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The selling price you set for your shoes can be different in each of the markets where you have a presence.
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How much does each salesperson you have employed cost you per period?
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Study Notes
NewShoes Quiz Flashcards
- Product development investments do not exclusively benefit the home region; they can have effects in other regions as well.
- NewShoes operates in three distinct regions.
- Contract bids are awarded to the firm (or firms) that submits the lowest bid, ensuring competitive pricing.
- Prior to assuming control of NewShoes, there were two periods of operations.
- The creation of improved product versions relies entirely on consistent product development expenditures.
- Entering a new region requires a significant investment of $750,000.
- Advertising effectiveness varies by region and is not uniform across all areas.
- With a 75% experience curve, a unit cost of $32 will decrease to $24 when cumulative production increases from 600,000 to 1.2 million units, reflecting a 25% price reduction.
- The selling price for shoes can be tailored to each market, allowing for strategic pricing approaches.
- Each employed salesperson incurs a cost of $80,000 per period, impacting overall operational expenses.
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Description
Test your knowledge about NewShoes with these flashcards. This quiz covers key concepts such as product development, regional operations, and bidding processes. Enhance your understanding of the NewShoes business framework.
