Aqualisa Quartz

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high volume

2) Should Performance Indicator’s (PI) technology be universally adopted by golf ball manufacturers, the following effects may occur in the used golf ball market:

B - The customer’s willingness to pay should increase, due in part to the improved quality of salable used golf balls. One assumes that resellers would not be able to sell the defective balls (i.e. those grayed from water damage) and thus, customers would be assured that any used golf ball purchased would be one free of this material defect. This assumption relies on the presumption that used golf ball buyers are concerned with the performance of their ball and/or that they would otherwise be deterred from playing with an inferior product (e.g. would want to avoid ridicule from their golf partners). The amount of this increase would be difficult to quantify, but one must believe that the willingness to pay wouldn’t exceed that of a new golf ball.

P - The price customers pay for a used/non-defective ball would likely increase due to the aforementioned increase in B and the following increase in C (assuming sellers would like to maintain profit margins equal to pre-PI).

C - Average cost per unit would increase. The case states that a single golf course could yield divers upwards of 100,000 water balls per year (p.3); however, it doesn’t state the frequency with which the balls are retrieved. Assuming balls aren’t retrieved at least weekly, and that balls lose six yards after one week in the water (p.7), the cost of recovering balls more frequently/free of water damage could be substantial. While this cost could be offset by advances in ball retrieval technology (e.g. golf ball sniffing dogs could find lost balls in forests?), we have no evidence to substantiate such claims.

Q - The quantity of used golf balls sold is almost certain to decline, due in part to the presumed decline in supply and increase in price. Assuming that the gap between the price of new and used golf balls becomes...