The launch of the squash racquet has been so successful that the frame machines are being used to their full capacity of 1,400 hours for three months. Nina calculates which racquets should take priority until they can install another frame machine (see Table 14.5).

Once the contribution per limiting factor has been calculated, the racquets can be put into order of priority—badminton, tennis, and then squash. Even though the squash racquet makes a larger contribution per unit, it takes up more time on the machine, so its contribution per machine hour is less than the other racquets. We can now calculate how many racquets should be made to maximize contribution.

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Table 14.5 Frame machine: limiting factor Tennis Badminton Squash racquet racquet racquet Potential racquet sales for next 3,000 2,100 1,500 three mouths racquets racquets racquets Selling price per racquet 35.00 40.00 42.00 Material costs per unit 13.00 11.00 10.50 Variable labour costs per unit 9.50 15.00 12.00 Contribution per racquet 12.50 14.00 19.50 Machine time per racquet 0.25 hours 0.25 hours 0.4 hours Contribution per machine hour 50.00 56.00 48.75