Reference no: EM132710759

Problem 1: Which price strategies suitable for the software development, professional services, and special projects of Health Services Software. ( cost plus pricing - absorption/variable, value based pricing, economic value pricing)

Software development was the backbone of HSS, and the capacity within software development drove all other costs. Activities included software development, the provision of help desk services, and, occasionally, sales to existing clients looking for new features. There were four software developers in this area. The total office space for the software development team was 250 square metres.
Professional services consisted of two client service representatives who worked with new sites and travelled to sites to install the software and provide technical support during the installation process. Professional services occupied 40 square metres of office space.
Special projects was important because, since its inception, HSS would in any given year receive requests for special or unique features within the software. Special projects would be developed for one client and then, when appropriate, bundled with future versions of the software. Special projects were difficult to forecast but were a key means of developing new and important software features. There was no specific office space allocated for special projects.