Assessment 3 – OPS 910 – Trimester 2 2023

OPS 910 Individual Report

Case Study: MG Wire Winding

- Business report to be submitted on the Moodle site before the due date.
- Due date: 30 June 2023, before 11:30pm.

The Background
Ron Smith felt good about his first week as a management trainee at MG 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.
MG Wire Winding, a Queensland company, is a medium-sized producer of wire windings used
in making electrical transformers. Joseph Lowes, the production control manager, described
the windings to Ron as being of standardized design.
Ron’s tour of the plant, which is laid out by process type (See 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 MG Wire

Vivian Napoli, MG’s general manager, stopped by Ron’s office and asked him to attend a staff
meeting. “Let’s get started with the business at hand”, Vivian said, opening the meeting. “Ron
studied operations and supply chain management, so I think he can help us with a problem we
have been discussing but without resolution.” Vivian turned to Joseph Lowes, the production
control manager. “Joseph, why don’t you describe the problem we are facing?”
“Well,” Joseph 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 I’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, Vivian wants
our profit to look as good as possible next month. I’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?”
Assessment 3 – OPS 910 – Trimester 2 2023

Ron 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, Ron knew that a
good business report is essential for communication with the management team and was keen
to do a good job.

Data
1. Next month orders
Product Units ordered
(units)
W0075C 1,400
W0033C 250
W0005X 1,510
W0007X 1,116

Note: Vivian Napoli has given her word to a key customer that MG Wire will manufacture
600 units of product W0007X and 150 units of product W0075C for him next month.
2. Standard cost
Product Material Labour Overhead Selling Price
W0075C $33.00 $9.90 $23.10 $100.00 $34
W0033C $25.00 $7.50 $17.50 $80.00 $30
W0005X $35.00 $10.50 $24.50 $130.00 $60
W0007X $75.00 $11.25 $64.75 $175.00 $24

3. Selected operating data

Average output per month 2,400 units
Average machine utilization 63%
Average percentage of production sent to 5% (mostly from Winding Department)
Rework Department
Average number of rejected units awaiting 850 (mostly from Winding Department)
rework

4. Plant capacity (hours)

Drawing Extrusion Winding Packaging
4,000 4,200 2,000 2,300

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

accommodate any schedule.
5. Bill of resource (hours/unit)
Product Drawing Extrusion Winding Packaging
W0075C 1.0 1.0 1.0 1.0
W0033C 2.0 1.0 3.0 0.0
W0005X 0.0 4.0 0.0 3.0
W0007X 1.0 1.0 0.0 2.0
Assessment 3 – OPS 910 – Trimester 2 2023

Business Report
Suppose you are in Ron’s position, please conduct relevant analysis and prepare a business
report to Joseph and Vivian based on the scenario of MG 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 MG Wire.

• Problem formulation and solution: Formulate and solve the problem, and report the
results from the managerial perspective.
• Explanation of assumptions, including:
 List and justify all assumptions you have made to formulate and solve the
problem. This includes all assumptions got directly from the case study
description and all additional assumptions you needed to make.
 Explain which assumptions are key for formulating and solving the problem.
Briefly discuss what conditions would make key assumptions invalid, and, if
key assumptions are invalid, how the results could change if relevant.
• Sensitivity analysis: If relevant, discuss the results from the sensitivity report, and
identify relevant information that could be help with decision making in MG Wire.
• Discussions and recommendations , including but not limited to:
 Discuss MG Wire’s options for next month.
 Comment on the need for temporary workers in the drawing department.
 Does this analysis help decide which department needs new equipment? If yes,
please explain your answer. If not, please describe the appropriate analysis
technique to answer the question about new equipment, and discuss what
additional data is needed.
 Make recommendations with justifications.

Important note:
• To complete the report, you will need to solve one or more linear program problems and/or
decision trees, interpret the results, and make use of the sensitivity analysis results.
• You may make reasonable assumptions and informed judgements as needed, but make sure
to state them clearly in your report. Do not make assumptions merely to by-pass the
challenges faced.
• You may not need all the given data to formulate the problem, but they may be helpful for
your follow-on analysis and discussions.
• This is a business report for your manager. Please write the report in a business setting and
make it accessible and easy to understand for the management who may not know a lot
about analytics.
Assessment 3 – OPS 910 – Trimester 2 2023

Formatting Requirements
For proper business communication, your report should also conform to the following
requirements.

• Use a structured business report format for your submission.

• Keep your report length to no more than 2,000 words (including title page, and tables and
figures, excluding Appendix).
• Use diagrams and tables if needed.
• Include Appendix if needed.