Subject category:
Marketing
Published by:
INSEAD
Version: 10.2004
Length: 7 pages
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Abstract
Shiva Plastics Corp has been invited to submit bids for the production of a number of different injection moulding parts. In the past, the company used a simple 'cost-plus' pricing strategy based on the raw material cost of a part to determine its bids. However, overall manufacturing costs are uncertain and this pricing strategy has resulted in unexpected losses. With a more sophisticated cost estimation approach the company hopes to do better.
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Abstract
Shiva Plastics Corp has been invited to submit bids for the production of a number of different injection moulding parts. In the past, the company used a simple 'cost-plus' pricing strategy based on the raw material cost of a part to determine its bids. However, overall manufacturing costs are uncertain and this pricing strategy has resulted in unexpected losses. With a more sophisticated cost estimation approach the company hopes to do better.
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