Question

Which technology is better?

(1)

a technology that involves high initial cost but lower future annual operating costs

(2)

a technology that is cheaper in initial cost but higher future annual operating costs

A. Always (1) Technology

B. Always (2) Technology

C. Depends. Need to evaluation a life-cycle cost

For every penny that the price of gasoline goes up, the U.S. Postal Service (USPS) experiences a monthly fuel cost increase of $8 million. State what assumptions you need to make to answer this question: "How many mail delivery vehicles does the USPS have in the United

States?”

A. Gasoline price before the increase

B. Gas consumption (miles per

gallon) of the average delivery vehicle

C. Total number of miles driven each year by the average delivery vehicle

D. Total number of drivers employed by the USPS

E. Annual repair and maintenance expenses per average delivery

vehicle

Assume that your employer is a manufacturing firm that produces several different electronic consumer products. What are three nonmonetary factors (attributes) that may be important when a significant change is considered in the design of the current bestselling product?

A. Aesthetics

B. R&D expenses incurred for the design

C. Safety

D. Advertising costs

E. Quality in terms of consumer expectations

Answer 1

1. C

A technology that needs to be introduced is chosen depending upon many factors. Not only the costs associated with the technology but also the time for which it will be used or the opportunity costs associated with it. Thus the type of technology to be used depends on number of factors and need to evaluation a life-cycle cost.

2. B

Of all the options given the gas consumption of the average delivery vehicle is the most appropriate ad suitable to answer the question. It tells us the gas consumed by the vehicle and costs associated with it. This can be thus used to estimate the total number of vehicles that are there.

3. A C E

The non-monetary attributes that may be important when a significant change is considered in the design of the current bestselling product are aesthetics, safety and consumer expectations. The other given options involve monetary valuations and thus are not non monetary attributes.