Ma. Amah Concepcion S. Buenaventura Cristian Gerald Macaraig Far Eastern University Master in Business Administration Quantitative Analysis Case 2 – Mexicana Wire Works Ma. Amah Concepcion S. Buenaventura Bonnet Jane Medino Cristian Gerald Macaraig John Carl Rosquillo Noah John Dela Paz Kristine Joyce Tamang Roy Kondoy

I. Case Background Mexicana, a subsidiary of Westover Wire Works, a Texas firm, is a medium- sized producer of wire windings used in making electrical transformers. Its product, the windings, is considered a standardized design. The production process for this involves drawing, extrusion, winding, inspection and packaging. After inspection, good product is packaged and sent to finished product storage; defective product is stored separately until it can be reworked. Please refer to the plant lay-out below: Office Wire Drawing Finished Product Storage Rework Department Rejected Product Storage Packaging Receiving and Raw Materials Storage Winding Extrusion Inspection Mexicana would want to address its capacity problems. Thus, Vivian Espania, the general manager, has asked Ron Garcia, the new management trainee, to help the company in addressing its issues.

II. Statement of the Problem There are several issues in this problem that needs to address. Mexicana is planning to refinance some of its debt. Based on its current capacity, Mexicana is accepting more orders greater that what it can produce.

III. Objective Function & Constraints Maximize P = 34 W75C + 30 W33C + 60 W5X + 25 W7X subject to: 1 W75C = 1,400 1 W33C = 250 1 W5X = 1,510 1 W7X = 1,116 1 W75C + 2 W33C + 0 W5X + 1 W7X = 4,000 1 W75C + 1 W33C + 4 W5X + 1 W7X = 4,200 1 W75C + 3 W33C + 0 W5X + 0 W7X = 2,000 1 W75C + 0 W33C + 3 W5X + 2 W7X = 2,300 1 W75C = 150 1 W7X = 600

III. Objective Function & Constraints Meet key customers demand: Product W0075C >= 150 units Product W0007X >= 600 units •Plant capacity: Hours for Drawing <= 4000 hours Hours for Extrusion <= 4200 hours Hours for Winding <= 2000 hours Hours for Packaging<= 2300 hours

III. Objective Function & Constraints Received orders constraints:X 1<= 1400X 2<= 250X 3<= 1510X 4<= 1116

III. Analysis of the Problem The company produces 5 types of product. Let X1, X2, X3, X4 and X5 denote each product as follows: Products3 W0075C=X1 W0033C=X2 W0005X=X3 W0007X=X4

III. Analysis of the Problem To compute for the profit for each product, we look at the standard cost table provided by the production control manager. Subtract all the associated cost to our sell price per product type. Currency in US $

IV. Alternatives

Testing the model

V. Recommendation

Answer to the Given Case Question

Question #What recommendation should Ron Garcia make with what justification? In April, they following quantities of product should be produced to achieve optimum profit which will satisfy all limitations W0075C = 1100 units (which is >= 150) W0033C = 250 units W0005X = 0 units W0007X = 600 units  (which is >=600) Optimum Profit = US $59,900

Question #2 Discuss the need for temporary workers in the drawing department. There is no use of hiring the temporary workers in the drawing department, because hours for drawing are un-utilized due to lack of winding and packaging hours. Drawing is not a binding constraint. If we don’t have sufficient packaging hours to proceed the product after drawing and extrusion, the finished product will not be come out for delivery.

Question #2 Discuss the plant lay-out The current plant lay-out is not effective. The sequence should be – drawing – extrusion – winding – inspection -- packaging. After inspection good products is packaged and sent to finished product storage. Defective product is stored separately until it can be reworked. Exchanging the locations for packaging will create a better flow of our main product.

VII. Learnings