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Short Term Decision Making In-Class Example STDecisions2 Savoie Co. manufactures three products named: Un, Deux, and Trois. These three products use the same limited material,
Short Term Decision Making In-Class Example STDecisions2 Savoie Co. manufactures three products named: Un, Deux, and Trois. These three products use the same limited material, called presidium. Un, Deux, and Trois are not in competition with each other, and demand for each exceeds the amount of the product Savoie could manufacture. Presidium costs $10/lb, and there are only 5,000 lbs of presidium available for Savoie to purchase. Labor costs $15/hour for all products. a) Assuming the following table represents the input quantities for each product, how should Savoie plan its product mix? How many of each product should it make? Cost of Presidium/lb Cost of Labor/hour $10 $15 Un Deux Trois Selling Price$100 $100 $100 DM Ibs required/unit DL hours required/unit 4 174
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