Compare and contrast routine problem solving, limited problem solving, and extended problem solving. Give an example of when each might be used.
What will be an ideal response?
There are three general variations in the consumer purchase decision process based on consumer involvement and product knowledge. Extended problem solving uses each of the five stages of the consumer purchase decision process, including considerable time and effort on external information search and in identifying and evaluating alternatives. Several brands are in the consideration set, and these are evaluated on many attributes. Extended problem solving exists in high-involvement purchase situations for items such as automobiles and elaborate audio systems. Limited problem solving involves consumers typically seeking some information or relying on a friend to help them evaluate alternatives. In general, several brands might be evaluated using a moderate number of different attributes. You might use limited problem solving in choosing a toaster, a restaurant for lunch, and other purchase situations in which you have little time or effort to spend. Routine problem solving is used for products such as table salt and milk. Consumers recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives. The purchase process for such items is virtually a habit and typifies low-involvement decision making. Routine problem solving is typically the case for low-priced, frequently purchased products like toothpaste.
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Answer the following statement true (T) or false (F)
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San Juan Minerals (SJM) has two service departments and two operating departments. Operating data for these departments for last year are as follows: Service DepartmentsOperating Departments MaintenanceCafeteriaMiningProcessingDepartmental costs$48,000$45,000$70,000$130,000Machine hours 2,000 1,000 11,000 9,000Number of employees 40 30 400 360 Costs of the Maintenance Department are allocated on the basis of machine hours. Cafeteria costs are allocated on the basis of number of employees. SJM does not distinguish between variable and fixed overhead costs. Assume that SJM uses the step-down method to allocate service department costs, starting with Maintenance. The total overhead allocated from Maintenance to Mining would be closest to:
A. $22,957 B. $25,143 C. $16,800 D. $51,150