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Name of the group ID Number

members
Chusak Deetrakunwattanapoen 7472100374
Gopi Krishna Pamula 7462100509
Case Study: Mexicana Wire Mohammed Faruk Ahmed 7472100333
Works Inc. Nam Doc Tran 7472100382
Sukana Sasiwachiranggool 7472100291
Varavut Nitistaporn 7472100127

Headings:

• Scenario in brief
• Problem identification
• Objective function and constraints
• Developing the model based on acquired data
• Plot the model in spread sheet to obtain solution
• Focus on discussion questions

Scenario in brief:

• Mexicana Wire Winding Inc. is a producer of wire winding used in making


electrical transformer.
• Production process involves drawing, extrusion, winding, inspection and
packaging
• This company is booking more orders than they can fill
• They will expand the plant capacity later but it will not help them in April
• The company wants the optimum profit for the month of April using their limited
capacity and resources
• April orders: -----------------------------------------
Product W0075C 1400 units
Product W0033C 250 units
Product W0005X 1510 units
Product W0007X 1116 units
-----------------------------------------
Identified Problem:

• Booking orders > production using present capacity


Objective function and constraints:

Objective Function: Maximum Profit

We assume –
To make the optimum profit by satisfying the limitations, total units of
Product W0075C = X1
Product W0033C = X2
Product W0005X = X3
Product W0007X = X4
Assume that X1, X2, X3, X4 >=0

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

• Received orders constraints:


X1 <= 1400
X2<= 250
X3 <= 1510
X4 <= 1116

Note: Inspection capacity is not a problem; work overtime can be schedule to meet
the requirements.

Developing the model based on acquired data:

Profit calculation for per unit of products:


(Currency is US $)

Product Material Labor Overhead Total Expense Selling Price Profit


W0075C 33.00 9.90 23.10 66.00 100.00 34.00
W0033C 25.00 7.50 17.50 50.00 80.00 30.00
W0005X 35.00 10.50 24.50 70.00 130.00 60.00
W0007X 75.00 11.25 63.75 150.00 175.00 25.00
Total Maximum Profit: Profit for product X1 per unit = 34
Profit for product X2 per unit = 30
34X1+30X2+60X3+25X4 Profit for product X3 per unit = 60
Profit for product X4 per unit = 25
Equation developed using the
constraints:

Drawing constraint
1X1+2X2+0X3+1X4 <=4000

Extrusion constraint Plant capacity (Hours)


1X1+1X2+4X3+1X4 <=4200 Drawing Extrusion Winding Packaging
4000 4200 2000 2300
Winding constraint
1X1+3X2+0X3+0X4 <=2000
Required hours/Unit
Packaging constraint Product Drawing Extrusion Winding
1X1+0X2+3X3+2X4 <=2300 Pack
W0075C 1 1 1
X1 >= 150; X4 >= 600 1
W0033C 2 1 3
X1 <= 1400 0
X2<= 250 W0005X 0 4 0
X3 <= 1510 3
X4 <= 1116 W0007X 1 1 0 2

Plot the model in spread sheet to obtain solution:

Mexicana Wire Work: Case Study of


LP

W0075C W0033C W0005X W0007X LHS Operator RHS Slack


Object Function 34 30 60 25 59900
(max. profit)
DRAWING 1 2 0 1 2200 <= 4000 1800
EXTRUSION 1 1 4 1 1950 <= 4200 2250
WINDING 1 3 0 0 1850 <= 2000 150
PACKAGING 1 0 3 2 2300 <= 2300 0

SOLUTION 1100 250 0 600


VALUE

Excel file is attached herewith.

Discussion Questions:
1. 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 $59900

Since packaging hours will be utilized fully, the remaining hours of drawing and
extrusion will be unused.

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. 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.

3. Discuss the plan layout

Sequence: 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.