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The Selling System S.p.A. (SSS) produces customized snack vending machines, mainly for offices. For the month of September 2015 it plans to build three batches
The Selling System S.p.A. (SSS) produces "customized" snack vending machines, mainly for offices. For the month of September 2015 it plans to build three batches of distributors (Alfa, Beta and Gamma) to be sold to three customers (respectively, Tizio, Calo and Sempronio). Sempronio was the only one to impose a penalty of 800 per unit of product in the event that his order could not be completely satisfied within the established times. The data relating to the three initial batches are as follows: Selling price N unit Labor hours required Cost of direct materials 1.500 550 110 6 h Alfa Beta 1.100 430 90 45 h Gamma 1.750 980 120 7,5 h The ordinary working hours available in a month are 2.000, the cost of labor is 25 / hour. The cost of energy is 15 per hour / man. Depreciation of the plants for September 2015 amounted to 160,000. 1. Which product has the highest unit profitability? 2. Shortly before starting the production of the month, the SSS receives the request from Speedy s.r.l. of an urgent order of 20 distributors (Delta) customized to be different from the three models Alfa, Beta and Gamma. The Speedy order, if accepted, must be strictly delivered by September 2015, so it must be placed first in the production plan. The cost of raw materials to be used to create Delta amounts to 800, the hours of labor required for each unit are 6. This choice would force SSS to delay delivery of part of the units that make up one of the existing orders to the following month. Which order should be partially fulfilled in October, and what is the minimum unit selling price that SSS should ask Speedy for the Delta product
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