Masks R Us is a producer of medical masks in rural Ontario outside of North Bay. Masks R Us manufactures three types of masks - the N95, N99 and N100. There has been an exponential increase in demand of surgical grade masks in Canada since the COVID-19 pandemic. You, as the CFO, have been tasked with providing a recommendation to your CEO, Kareem Abdul, how you plan to effectively manage constraints to meet the current high demand while maximizing profit. Keep in mind the knowledge you have of constraint of resources with respect to raw materials, labour and machine capacity. North Bay no longer has a train service from Toronto and there are only 3 flights per week from Toronto to North Bay and 1 flight per week from Ottawa. Ontario Northland operates a bus service to North Bay from Toronto 4 times per day, 7 days per week.

Per Unit is One Box	N95	N99	N100
Selling Price per Unit	$16	$21	$21
Variable Cost per Unit	$7	$11	$13
Contribution Margin per Unit	$9	$10	$8
Direct Labour Hours per Unit	1	1.5	2
Machine Hours per Unit	4.5	2	2.5

The federal government is looking to purchase a product mix of 300 million masks to deal with the pandemic and replenish its rapidly dwindling reserve stocks as it prepares for the second wave, Kareem said.I think its very clear that they dont want to see another shortage of protective equipment, Kareem said. Thats something nobody wants to see again.Kareem said they are confident they can produce the masks at competitive pricing.Most of the raw materials for the mask are produced in Quebec and in other parts of Canada, Kareem said. However, there is one raw material that can only be sourced from the United States and China. The Prime Minister has said the scramble to procure personal protective equipment during the pandemic should serve as a lesson to the federal government that it must maintain some critical manufacturing capacity in Canada and look to secure supply chains for our manufacturers.Canadas ability to produce generic drugs has been hollowed out by companies moving their production to places like China and India because they can produce there at a cheaper price, he said.To save a few pennies we actually destroyed an essential business that we needed in the time of crisis, Trudeau said. That for me is a major lesson that I hope the government will learn.

1. If the number of direct labour hours is the only production constraint and there is unlimited demand for all 3 types of masks, what would you recommend is the best production mix?
2. If the number of machine hours is the only production constraint and there is unlimited demand for all 3 types of masks, what would you recommend is the best production mix?
3. Assuming mask production will only be for one client, the Government of Canada and that the product mix demand from the Government of Canada for November is 2,000 boxes of N95; 1,000 boxes of N99 and an unlimited amount of boxes of N100 as that type of mask is in high demand due to the fact that it provides the maximum protection. The current labour hours available for every day of November due to some workers on holidays or illness is 10 staff per shift, 8 hours per shift, 2 shifts per day. What production mix would you inform the production manager is to be produced to fill the Government of Canada order for the month of November given the known demand and the known constraints on labour hours available?
4. Discuss what you think are some strategic qualitative factors that Masks R Us may have to evaluate to ensure it can meet the increasing demand in order to retain its contract with the Government of Canada in the long term.