Bloomington Breweries produces beer and ale.  Beer sells for $5 per barrel and ale sells for $3 per barrel.  Producing a barrel of beer requires 5 lb. of corn and 2 lb. of hops.  Producing a barrel of ale requires 2 lb. of corn and 2 lb. of hops.  Sixty pounds of corn and forty pounds of hops are available

Write the LP formulation, set the problem up in Excel and use Solver to find the optimal solution

Use your Solver output to answer the questions below.

a.  What is the optimal solution and the total profit?

b.  If additional amounts of corn were available what would its value to the firm be?

Within what limits could the firm expect that benefit?

c.  If additional amounts of hops were available at a cost of $1.00 per pound should the firm buy it?

d.  Within what limits could the profit contribution of beer change without changing the optimal solution?

e.  If the brewery could sell beer for $5.50 per barrel and ale for $3.75 would the optimal solution change?

f. The amount of yeast available is being limited by global supply problems.  Regular beer will require 3 ounces of yeast and ale will require 4 ounces of yeast.  The total amount of yeast available is 55 ounces.

Will the current solution still satisfy the constraints or must we resolve the problem with the new constraint set?

g.  The brewery is considering adding a third product – dry beer.

The dry beer will require 3 lbs of corn and 2 lbs of corn.  It will sell for $4.50 per barrel.

Should the company consider adding the dry beer to its product line, given the above resource requirements? (Calculate the opportunity cost)