Product 1 Product 2 Current Configuration H11101 H37632 Esti

Product 1 Product 2 Current Configuration H11101 H37632 Estimated Future Product Costs $143.64unit $320.14/unit Category(H= Hyperware) Alpha (kilograms) Beta {kilograms) Bandwidth (terahertz) Hyperware Hyperware 3 7 6 Warranty (quarters) Packaging (1=std,2-prem,3=ESprem) 0 3 R&D; Spending 100000 100000 Reconfigurations are limited to a maximum of 1 per quarter

Solution

Changes in a set-top box products configuration are reconfigurations.

A reconfiguration involves a change in one or more of alpha,beta,babdwidth,warranty and packaging.

Any configuration change involves $1,000,000, plus an additional $100,000 per configuration element that is

changed.

If you reconfugure a set top box by changing three of its elements simultaneously, the total associated

reconfiguration cost is $1,300,000.