Heitaken Brewery Ltd is in the process of deciding their production plans for the coming month. It manufactures two main beers - Lager and Porter. The beers are manufactured in two main departments - brewing and fermenting.

Department Lager (machine hours per crate) Porter (machine hours per crate) Machine hours available

Brewing 6 8 1400

Fermenting 11 10 2000

The details below relate to the production costs of these two types of beers.

1. The maximum demand is expected to be 100 crates a month for Lager and 130 crates a month for Porter.

2. The selling price per crate of Lager is 150, and for Porter it is 200.

3. Direct materials are 50 per crate for Lager and 60 per crate for Porter.

4. Direct labour costs are 40 per crate for Lager and 50 per crate for Porter.

5. Other variable costs are 10 per crate for Lager and 15 per crate for Porter.

Required:

(a) Determine the optimal production plan that will maximise the contribution for Heitaken Brewery. You are required to follow the five-step linear programming approach to demonstrate solutions. (16 marks)

Heitaken Brewery Ltd has recently modernised its production facilities, replacing much of their direct labour with automated machinery. Heitaken's customers, however, have complained owing to issues with the product quality and late deliveries of beer. One of the directors of Heitaken Brewery has heard about Total Quality Management (TQM) and Just-In-Time production (JIT), and suggests adopting these techniques to address the current issues the company is facing.

Required:

(b) Advise Burton Breweries on whether TQM and JIT should be introduced to resolve the current issues.

Answer rating: 100% (QA)

Answer a Determining the optimal production plan that will maximize the contribution for Heitaken Brewery using the fivestep linear programming approach Step 1 Define the decision variables Let x numb... View the full answer