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Annual Equivalent Cost; Oven Case Study

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Synta Manufacturing Company is considering purchase of new oven to dry its painted optical tube assemblies.

Alternative 1: Conventional oven will cost $100,000 and can be expected to last 5 years, with a salvage value of $10,000. Operating costs will be $24,000 per year. •

Alternative 2: Convection oven will cost $140,000, should last 5 years, and will have a salvage value of $12,000. The operating costs will be $12,000 per year.

Assume the services provided by the ovens are identical. Assume an interest rate of 10%
a) Compare the annual equivalent costs of the 2 alternatives.
b) Make a recommendation for selection.

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Solution Preview

Annual equivalent cost or annual worth (AW) is the annual cost of owning an asset over its
entire life. It is often used by firms for capital budgeting decisions.

This is how you calculate AW:

Alternative 1
Capital Recovery (CR) = - $100,000 (A/P, 10%, 5) + $10,000 (A/F, 10%, 5)
where A = ...

Solution Summary

This solution provides detailed step-wise calculations to an engineering economics problem.

$2.19
See Also This Related BrainMass Solution

Marketing Management: Bose Corporation analysis of strategy and philosophy

Please see full case in attached file.

This is a master level report and case study analysis of Bose Corporation discussing about the company's marketing strategies and business philosophies.

Attached its case study and synopsis with questions. Basic requirements and guidance by lecturer have been written in red below each question.

Harvard referencing is crucial and effective application of diagram to show understanding is necessary for this report. Fair number of referencing is needed as well.

Bose: Competing By Being Truly Different
(Please read the case as per attached)

Synopsis

The Bose Corporation has been around since the 1960s. It has come to be known for its high-end speakers and headphones. It is a brand with very high level of equity and is the most trusted brand of 22 best-known consumer technology brands. As the brainchild of its founder, the Bose Corporation has been very successful financially as well.

Yet Bose the company and Bose the man are very much intertwined. Amar Bose founded the company in the 1960s. He has kept it private in order to control the degree to which the company invests in and conducts research. This he considers the lifeblood of the company. Time and time again, he has ignored existing technologies and started entirely from scratch.

It is this philosophy that has lead to truly groundbreaking innovations. Bose Corporation has marketed speakers and headphones and will soon release an automotive suspension system that unlike anything else on the market.

Questions

1. Based on the business philosophies of Amar Bose, how do you think the Bose Corporation goes about analyzing its competition?
- Describe Bose's competitor analysis i.e. identify competitors, accessing competitor's objectives, strategies, strengths and weaknesses and reaction patterns.
- Bose is product-focused company use competitors as channel to understand customer needs.
- Actually Bose is customer focus without knowing it.

2. Which of the three approaches to marketing strategy best describe Bose's approach? (800 words)
- Entrepreneurial, Formulated and Interpreneurial
- Bose is using Entrepreneurial and Intrepreneurial marketing strategy.
- Bose definitely not formulated marketing strategy
- Describe accordingly

3. Using Michael Porter and Treacy and Wieserma frameworks presented in the text, which basic competitive marketing strategies does Bose pursue?
- Under Michael Porter, Bose could be adopting cost leadership or differentiation strategies. Use references to argue.
- Bose should be product leadership based on Treacy and Wieserma philosophy in competitive marketing strategy.

4. What is Bose's competitive position in its industry? Do its marketing strategies match this position?
- Bose is market leader
i. Customer focused
ii. Product leadership
iii. Larger market share
- Market leader strategies:
i. Expand total market - use Ansoff model to expand to different markets.
ii. Protect market share - promotions, sampling, free trial
iii. Expand market share
- Explain Bose using which strategy based on the market leader strategies after explaining all three

5. In your opinion, is Bose a customer-centric company?
- Define customer-centric
- Bose is not a customer-centric company due to its function focus in R&D and as market leader.
- But in fact Bose is focusing on customer without knowing it. In a way, Bose could also be considered as customer centric.
- This is a tricky question; a smart way of writing the argument will be needed. Use references as an argument for your statement. Avoid contradict statements.

PS: Throughout the report, diagram is very important and the relevant use of diagram is the ultimate determination of this report.

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