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Gretzky Inc. produces three types of hockey sticks. Data concerning the selling prices and unit costs of the three hockey sticks appear below: Composite Fibreglass

Gretzky Inc. produces three types of hockey sticks. Data concerning the selling prices and unit costs of the three hockey sticks appear below:

Composite

Fibreglass

Carbon Fibre

Weekly demand (units)

120

180

150

Selling price

$320

$160

$300

Variable costs

150

55

145

Fixed costs

25

18

50

Blade bending machine time

10 min.

5 min.

7 min.

Fixed costs are applied to the products based on direct labour hours. Demand for the three hockey sticks exceeds the company's productive capacity. The blade bending machine is the constraint, with only 2,400 minutes of blade bending machine time available/week.

Required:

  1. Given the blade bending machine constraint, which product should be emphasized? Support your answer with appropriate calculations. (5 marks)
  2. Given the blade bending constraint of 2,400 minutes per week and the weekly demand, what is the optimal production plan for the week? (3 marks)

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