Case Study 4.1 Background
Ron Garcia, a management trainee at Mexicana Wire Winding, Inc. has been asked by the general manager to conduct an analysis seeking maximum profit under current production constraints. The company is seeking a banner year to obtain leverage for refinancing long-term debt (Render et al, 2012, p. 300). Using linear programming, we can assess the max profit potential while taking into account a series of identified constraints.
Mexicana Wireworks Max Profit Analysis Overall production constraints are laid out in Fig 1.1 and include product max profit capability, April orders/Demand, key customer fills promised by the General Manager, labor requirements for each product, and maximum Hours capacity of the Plant (Render et al, 2012, p. 301). Product Profit was determined by subtracting overall costs (material, labor, overhead) from selling price. Average output per month is only 2400 units, 850 of which are rejected for winding errors, well below capacity to meet April’s customer demand. The focus in this analysis consists of the key customer demand promised by the GM and maximum profits under constraints of plant capacity. Max profit=34X1 + 30X2 + 60X3 + 25X4. After plugging numbers into the QM software, the results are:
W0075C = 1100 units (>= 150)
W0033C = 250 units
W0005X = 0 units
W0007X = 600 units (>=600)

Optimum Profit = US $59900

Packaging hours become the limiting factor as far as plant capacity is concerned, wasting potential drawing and extrusion excess hours as seen in the “slack” column of Fig 1.2. Unfortunately, X3(W0005X) is the most profitable per unit but due to constraints of key customers and plant capacity of packaging, profits will suffer loss of potential revenue based on April demand of $90,600. If the GM is willing to increase plant capacity in the packaging department, we could rework the