Case Study: Crompton Wire WindingNote: Warata Wales has given her word to a key customer that Crompton Wire will

manufacture $600$ units of product W$0007$X and $150$ units of product W$0075$C for him

nextmonth.

Standard cost

Selected operating data

Plant capacity $($hours$)$

Note: Inspection capacity is not a problem: we can work overtime as

necessary toaccommodate any schedule.

Bill of resource $($hours$/$unit$)$

Business Report

Suppose you are in Dantzig's position, please conduct relevant analysis and prepare a

businessreport to Simplex and Warata based on the scenario of Crompton Wire.

The report should contain all aspects listed below. Please use section$/$subsection headings

$($which do not need to be the same as the list below$)$ that are meaningful to the topic under

discussion.

Introduction: Clearly define the business problem for Crompton Wire.

Problem formulation and solution: Formulate and solve the problem, and

report theresults from the managerial perspective.

The Background Dantzig Smith felt good about his first week as a management trainee at

Crompton Wire Winding. He had not yet developed technical knowledge about the

manufacturing process, but he had toured the facility and met many people in various areas of

the operation. Crompton Wire Winding, a New South Wales company, is a medium$-$sized

producer of wire windings used in making electrical transformers. Simplex Lowes, the

production control manager, described the windings to Dantzig as being of standardized design.

Dantzig's tour of the plant, which is laid out by process type $($See Figure $1$Figure $1),$ followed the

manufacturing sequence for the windings: 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.

Figure $1$ Plant Layout of Crompton Wire

Warata Wales, Crompton general manager, stopped by Dantzig's office and asked him to attend

a staff meeting. "Let's get started with the business at hand", Warata said, opening the meeting.

"Dantzig studied operations and supply chain management, so I think he can help us with a

problem we have been discussing but without resolution." Warata turned to Simplex Lowes, the

production control manager. "Simplex, why don't you describe the problem we are facing?"

"Well," Simplex said, "business is very good right now. We are booking more orders than we can

fill. We plan to purchase some new equipment, which will take care of our capacity problem,

though we haven't decided the type of equipment to purchase, that is$,$ it is not clear which

department should get new equipment." "Any plan for new equipment will take months to

finalize and implement, so it won't help us next month. I have located some retired employees

who used to work in the drawing department, and l$\text{'}$m going to bring them in as temporary

employees next month to increase capacity there. Because we are planning to refinance some

of our long$-$term debt, Warata wants our profit to look as good as possible next month. I$\text{'}$m

having a hard time figuring out which orders to run and which to back$-$order so that I can make

the bottom line look as good as possible. Can you help me with this.

Dantzig was surprised and apprehensive to receive such an important task so early in his career.

Recording quickly, he said "Give me your data and let me work with it for a couple of days".

Having studied business management, particularly supply chain management, Dantzig knew

that a good business report is essential for communication with the management team and was

keen to do a good job.

Data

Next month orders