Mexicana wire works and chase bank case studies

Mexicana Wire Works

1. Based off of the calculation done above the company could realize a profit of $115,800 by producing outlined quantities. W0005X is the most profitable product. I would fulfill the customer’s order as promised. The capacity of the winding department is underfunded. This department is making a lot of errors trying to keep up with production capacity. More hours need to be allocated to winding to reduce errors and increase efficiency. The decrease of the 5% rework product would increase profit. The addition of capacity in the winding department would decrease the rework percent.
2. The addition of the temporary employees to the drawing department is not necessary. The issue is not with the drawing department. The issue is with winding department if there are shortages there or they could be better utilized in the rework department to decrease inventory of rejected product. The assistance in the rework department would free up inventory and increase profit by providing waiting customers with their product.
3. The current design of the plant is inefficient. I would recommend moving the extrusion department to where the packaging department is. Inspection department should be where extrusion is now and packaging should be last. The order of departments should flow from extrusion to winding to inspection to packaging. This change in department arrangement would improve efficiencies. The machine utilization is low. Solving the issues plaguing the machines would improve utilization and improve efficiency and overall profitability. The issue could also be personnel not available to work the machines or not trained where needed.
Chase Manhattan Bank Case study
F= Full time personnel
P1 is the part-timers join at 9 A.M.
P2 is the part-timers join at 10 A.M.
P3 is the part-timers join at 11 A.M.
P4 is the part-timers join at 12 Noon
P5 is the part-timers join at 1 P.M.
P6 is the part-timers join at 2 P.M.
OT1 is the full-timers work during 5 – 6 P.M as overtime.
OT2 is the full-timers work during 6 – 7 P.M as overtime.

F, P1, P2, P3, P4, P5, P6, OT1, OT2 >= 0 Since required number is increased until 2-3 P.M. period, let’s add and reduce the part-timers (Pi = P1,P2.......P6) as table 1. We also assume that we may need over-timer in last 2 time periods 5-6 and 6-7

Objective Function: Minimum cost to meet personnel requirements by optimum workforce schedule.

Minimum Cost = 10.11(F+F+.5F+.5F+F+F+F+F)+7.82 x 4 (P1+P2+P3+P4+P5+P6) +8.08(OT1+OT2)

Minimum Cost = 10.11 x 7F + 7.82 x 4 (P1+P2+P3+P4+P5+P6) +8.08(OT1+OT2)

Minimum Cost = 70.77F + 31.28(P1+P2+P3+P4+P5+P6) +8.08(OT1+OT2)

Factors affecting personnel assignments:
Factor 1:To get optimum solution (min cost), the highest value of part-timer hours are considered (40% of the total personnel) as part-timers are paid the least. 4(P1+P2+P3+P4+P5+P6) = 40% of (14+25+26+38+55+60+51+29+14+9)

4(P1+P2+P3+P4+P5+P6) = 0.4 x 321 (P1+P2+P3+P4+P5+P6) = (0.4 x 321)/4 (P1+P2+P3+P4+P5+P6) = 32.1 or 32

Factor 2:Applied in Equation 1 to Equation 8 of Table 2

Factor 3 To keep it simple we will assume that every part-time employee will work exactly 4 hours.

Factor 4: Applied in Equation 3 to Equation 4 of Table 2

Factor 5:
Applied in Equation 9 to Equation 10 of Table 2

Factor 6: Daily overtime, OT1+OT2 2F

Weekly Overtime, 5(OT1+OT2) 5F

Non-negativity:F, P1, P2, P3, P4, P5, P6, OT1, OT2 ≥ 0

Calculations: P1+P2+P3=26 - 0.5F
P4+P5+P6=51 – F

26 – 0.5F + 51 – F = 321.5F = 45F = 30 Full-time
The number of full-time employees is 30. It is greater than the required personnel in the respective hours.P3 = 11, P4 = 12, P5 = 2 and P6 = 5, OT1 = 9 and OT2 = 9

After applying the factors:

1. Total minimum cost is $3253.34.
Minimum cost schedule
2. The limitations used in solving question 1 are that same ones outlined in the case study:

a. Part-timers must be less than 40% of the total workforce.

b. Full-timers are allowed to work 8 hours including 1 hour lunch time

c. Part-timers work at least 4 hours and maximum 7 hours without any lunch break.
d.
d. Fifty percent full timers go to lunch in the periods of 11-12 AM and 12-1 PM.

e. Every full-timers may have 2 hours over-time per day and 5 hours per week if necessary.

3. Changing the constraint for part time employees to a value greater than 40% will have a significant impact on reduction of cost. If it were possible to have more than 40% of total required personnel to be part-time employees, the number of full-timers would decrease and this would reduce the cost significantly. Part-timers cost less than full-timers. Another issue is that there are more full-time employees than is required in some periods. The amount of full time employees could be reduced to the required amount if there was a larger percentage of part time employees.