A Case Study Mexican Wire Works

Mexican Wire Works Case Study

Abstract

Mexican Wire Works is a producer of wire windings used in making electrical transformers. This company has the good fortune of booking more orders then they can fill. The company has ordered new equipment to help in the long term, but they still have a short term issue. In addition, the company is refinancing long term debt and needs profits to be as high as possible to counteract the effects of this refinance. The problem is to select the orders that will make the company the most profitable for the month, while keeping customers happy by filling their minimum requirements.

Introduction Mexicana, a subsidiary of Westover Wire Works, a Texas firm, is a medium-sized producer of
Using Linear Programming an QM for Windows software, Ron has found that the maximum profits of $59,900 can be achieved from the manufacturing 1,100 units of W0075C , 250 units of W0033C , and 600 units of W0007X . The result also suggests not to produce W0005C product. Looking at the need for additional temporary workers in the drawing department. Ron determined that by adding more headcounts in the drawing department, it is going to reduce the labor time yet it increases the labor cost up to 32%. The quantity of the product will still be the same but will decrease the profit to $53,653 due to no increase in the pricing but burdened by the increased in production cost. Ron 's recommendation should be to produce 1,100 units of W0075C , 250 units of W0033C , and 600 units of W0007X to increase the company 's profit margin. Company must turn down the orders to produce 1,510 units of W0005X because it is better for the company not to increase the number of employee in the drawing department in order to keep the cost down.

References
Render, B., Stair, R., & Hanna, M. (2012). Mexicana Wire Works. Quantitative Analysis for Management,