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Eastman Kodak Case Discussion Points

Eastman Kodak Case Discussion Points. The correct price would be the opportunity cost. Evaluate the Methods. Market: may cause substitution of cheaper non IBM equipment Full Cost-recognizes some opportunity costs but could transfer manufacturing inefficiencies to the data center

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Eastman Kodak Case Discussion Points

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  1. Eastman Kodak CaseDiscussion Points The correct price would be the opportunity cost

  2. Evaluate the Methods • Market: may cause substitution of cheaper non IBM equipment • Full Cost-recognizes some opportunity costs but could transfer manufacturing inefficiencies to the data center • Variable Cost-gives the right signal of the cost of producing one more unit without increasing capacity. Could be haggling over what is a variable cost.

  3. Evaluations Continued • Negotiated-unlikely to capture positive synergies. Negotiation skills also come into play.

  4. Choosing the Best Method • Price should cover at least variable cost, installation and shipping • Should include some fixed costs to give manufacturing an incentive to sell to the data center • 1.6 million does not capture all costs • Anything over 1.9 million encourages data center to use non IBM vendors

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