18-6 Price/Attribute Relationship Figure 18.2 Price P2/A2 At price Pl, a firm offer a product with Al attributes and PI cover costs. To offer A2 attributes, firm must charge p2 or lose money Al A2 Attributes " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
18-6 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Price/Attribute Relationship A1 A2 Attributes Price P1 P2 P2/A2 At price P1, a firm offer a product with A1 attributes and cover costs. To offer A2 attributes, firm must charge P2 or lose money. Figure 18.2
18-7 Price v. Attributes Firms offering high quality, fast service and other customer desires, often must raise price Customers must tradeoff price for attributes Operations management tries to push the price/attribute curve to the right with better production e Provides more attributes at the same cost By enhancing the price/attribute relationship the firm can Increase its competitive position " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
18-7 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Price v. Attributes ◼ Firms offering high quality, fast service and other customer desires, often must raise price. ◼ Customers must tradeoff price for attributes. ◼ Operations management tries to push the price/attribute curve to the right with better production. ◆Provides more attributes at the same cost. ◼ By enhancing the price/attribute relationship, the firm can increase its competitive position