Alternative 1 (Short term) Reduce the price of DMC's 10-hp motor to that of the 7.5-hp motor 

Horsepower Manufacturing Cost Total Cost List Price Price to Large Users
7.5  !!".5#  7#$.%%  #&'$%.%%  #&%"
#%  #!.%%  '%7.%  &55%.%%  #&5#

Horsepower of *nstallation Monthl+ ,ase Charge per Horsepower Monthl+ total charge cos
5  5.%%  #5.%%
7.5  #.5%  #!#.5
#%  %.%%  %%.%%

Alternative 2 (Mi- term) Reengin

Reengineer
eer DMC's
DMC's present
present 7.5-hp
7.5-hp mot
motor
or to make
make its starting
starting tor
torque
que at l

  Horsepower Manufacturing Cost Sales / transp. costs Price to Large Users

Users
7.5  7'%  #%  #&%"

, 7.5  !7  #%  #&%"

Alternative 3 (Long Term) tart producing a 5-hp motor !ith the starting torque of a 10-hp unit 

Horsepo
epower Manufact
acturing Cost Sale
ales / transp.
nsp. costs Price to Large Users
5  !!5  #5  #&5%

Brea
eak
k Even Poi
Point 163.04
Brea
Break
k Ev
Even
en Poin
Point*
t*** 23
239.
9.13
13
 

Sales / transp. costs Profit Margin

  #%.  $#'.%#
#5.#%  !%!.'%

t Profit Margin*

 $ 228.70

ast to that of the partan 7.5-hp unit 

Profit Margin
 $ 293

$ 216

Profit Margin *n0estment

 $ 460  75&%%%
 -0ertisement11
unit   "5&%%%
unit