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Here are details of the manufactured cost and current selling price for the traditional plastic used by the pallet manufacturers (PolyPlas) and the new Material (PolyPlas Super). PolyPlas PolyPlas Super Standard cost per tonne Sales price per tonne Margin per tonne 600 1000 400 640 1100 460
Questions 1. This is obviously an exciting new product for PEP Ltd. and managed correctly should help their competitive advantage. What is first thing you should ensure so that the company secures and maximises the commercial success of the new material? 2. What type of pricing method was being used at PEP Ltd. and what leads you to your answer? 3. Suggest a better pricing method based on the data given in the case and justify your argument. 4. The accounts department has set a price of 1100 per tonne, what is your opinion regarding this price and what price would you offer this new material to PEPs customers, the pallet manufacturers? Discuss fully your considerations in deciding upon this particular price.
Your assignment should be clearly identified with your name, student number and department. Assignments should be submitted to the Academic Support Unit in the Mechanical Engineering General Enquiries Office on Friday 4th November 2011 before 4.00 pm.