1)CRITICAL ISSUE:

Statement for critical issue:

“How should Ranger Creek Brewing and Distilling methodically increase its operational
capacity to fulfill the projected market demand, while preserving the integrity and quality
of its beer and spirit products, adhering to new legislative requirements, and managing the
financial implications associated with expansion?”

Exploring critical issue:

Strategic Expansion and Quality Maintenance The pivotal challenge for Ranger Creek
Brewing and Distilling is to strategically elevate production capacity in response to the
considerable demand growth expected through 2019. This entails a meticulous analysis of the
production line's scalability, particularly addressing whether to invest in additional or more
substantial equipment, redesign the plant layout for increased efficiency, or outsource storage
(Exhibit 2). Simultaneously, Ranger Creek must uphold the award-winning quality that has
positioned its beers and spirits favorably in the competitive market.
Navigating Legislative Changes Concurrent with growth management, Ranger Creek must
navigate the operational implications of Texas's evolving beer laws, which have introduced new
dynamics into the brewery and distillery's business model. The critical question here is how to
realign the business operations to leverage or mitigate these legislative changes effectively.
Financial Prudence and Investment Optimization Financially, the company faces the task of
optimizing its investment in new equipment (Exhibit 6) against the backdrop of its existing cost
structure (Exhibit 10). This includes evaluating the proportion of costs dedicated to raw
materials, which are the most significant expense for both beer and spirits, and determining the
impact of potential capital investments on production costs and pricing strategies.
Demand Forecast and Market Adaptation Lastly, Ranger Creek must consider the sales
volumes that have seen a substantial rise from 2011 to 2013 (Exhibit 9) and project future trends.
The company needs to forecast how these figures will evolve in light of the recent market
success and align its operational strategies to accommodate this growth.

In Summary The core challenge for Ranger Creek Brewing and Distilling is devising a
comprehensive strategy that addresses the multifaceted aspects of expanding production
capacity. This strategy must factor in maintaining product quality, navigating new legislation,
ensuring financial viability, and adapting to market demand. The decision-making process will
need to incorporate detailed analyses of the operational, legislative, financial, and market
dynamics to determine the most viable path forward for sustainable growth.

2) CRITICAL FACTS
Company Overview and Founding Principles
 Ranger Creek Brewing and Distilling, established by Mark McDavid, Dennis Rylander,
and T.J. Miller, is a combined microbrewery and distillery based in San Antonio, Texas,
recognized for its award-winning beers and bourbons.
Growth and Production Capacity
 The company, in its third year, is experiencing growth pains and needs to address
questions about maximum capacity, equipment purchases, and process automation
without relocating from the existing facility .
 Current production facilities cover 7,500 square feet, with 6,000 square feet dedicated to
brewing equipment, most of which is imported from Europe (Exhibit 1).
Product Lines and Market Reception
 Ranger Creek’s product line includes four main beers and a range of spirits, with a
significant market for both, as evidenced by the company’s sales volumes increasing
steadily over three years (Exhibit 9).
 Seasonality affects sales, with beer and spirits showing varying demand peaks throughout
the year (Exhibit 8).
Financial Structure and Investment Needs
 Financials reveal that raw materials constitute the largest expense in the cost structure for
both beer and spirits, with significant costs also allocated to distribution, overhead, and
promotions (Exhibit 10).
 The equipment necessary for production includes a mash kettle, brew kettle, conditioning
vessel, grain mill, and a complete distillation system, with associated costs (Exhibit 6).
Operational Processes and Efficiency
 Beer production involves multiple stages including milling, mashing, boiling, fermenting,
conditioning, and packaging, each with a specific time and equipment requirement.
 Whiskey distilling is an intensive process, utilizing dedicated equipment and requiring
significant time investment for both the distillation and aging process.
Legislative Environment and Market Dynamics
 The Texas Legislature has passed new bills that alter the regulatory framework for the
microbrewing and distilling industry, affecting production limits, distribution, and direct
sales.
Organizational Structure and Human Resource Allocation
 The organizational structure indicates specific roles for operations, finance, sales, and
marketing, with the distribution of responsibilities among the founders and additional
staff for brewing, distilling, and sales processes (Exhibit 1).
Market Trends and Competitive Landscape
 The market for craft beers and spirits is on the rise, with a trend towards premiumization
and an increasing number of microbreweries and distilleries .
  There is a notable presence of major players and a variety of competitive products within
the craft beer and whiskey segments.
Environmental Concerns and Resource Utilization
 Ranger Creek values sourcing materials locally and has environmental considerations,
particularly concerning water usage, which is a critical resource in Texas.
These critical facts form the foundation for understanding Ranger Creek’s need to expand its
production capacity efficiently while managing financial expenditure, maintaining product
quality, adhering to regulatory changes, and capitalizing on market growth opportunities.

3) ANALYSIS

Operational Capacity and Constraints

 Based on the case, Ranger Creek's operational capacity is currently stretched to meet
demand, with significant growth in sales volumes for beer (from 1,000 to 3,500 barrels)
and spirits (from 0 to 2,800 cases) from 2011 to 2013 (Exhibit 9).
 The manufacturing facility utilizes 6,000 square feet for brewing equipment, suggesting
limited space for expansion within the current footprint .
 The equipment detailed in Exhibit 6 (e.g., mash kettle, brew kettle, conditioning vessel)
carries substantial costs, and the potential need for additional or larger capacity
equipment will require significant capital investment.
Product Quality and Market Response
 The quality of Ranger Creek’s products is a distinguishing factor in its market success.
Maintaining this standard during expansion is crucial as it directly impacts customer
satisfaction and brand reputation.
 Exhibit 4 shows a diversified product mix with seasonal offerings, indicating a need for
flexible production processes to accommodate varying product lines.
Financial Health and Cost Management
 The cost structure (Exhibit 10) reveals that raw materials are the largest expense for both
product lines, suggesting that any increase in production capacity will proportionally
increase these costs unless efficiencies are found.
 The distribution costs for beer are significant (16%), pointing to the need for an efficient
logistics strategy, especially if expanding distribution reach (Exhibit 10).
Legislative Impacts and Market Dynamics
 The recent Texas beer laws present both challenges and opportunities in terms of
distribution and sales models . The company must assess how these changes will affect
their operations and potentially offer new avenues for revenue.
 The craft beer and spirits market is growing, with trends favoring premium products.
Ranger Creek's positioning in this segment is advantageous but requires careful
 monitoring of market dynamics and competitor movements. Environmental
Considerations
 Water usage is a critical environmental and operational consideration, particularly in
Texas. Efficient water management will become increasingly important as production
scales up .
Organizational Readiness and Human Resources
 The organizational chart (Exhibit 1) shows a lean operation, with key individuals
handling multiple roles. Scalability will necessitate a review of human resource allocation
to ensure adequate staffing for increased production.
 Direct labor costs are currently lower for spirits (2%) than for beer (10%), which could
influence decisions on where to focus expansion efforts (Exhibit 10).
Seasonality and Sales Forecasting
 Seasonal fluctuations in sales (Exhibit 8) necessitate a dynamic production schedule to
ensure inventory matches demand peaks without overproduction during slower periods.
Production Efficiency and Technology
 Given the detailed brewing and distilling processes PAR, there is potential for efficiency
gains through process optimization or technology upgrades.
 The still system (Exhibit 6) represents a significant investment and is crucial for spirits
production, which has shown substantial sales growth. Optimizing its use will be key for
cost-effective expansion in spirits production.

The analysis highlights the need for a multi-faceted approach to expansion that considers
operational capacity, financial health, product quality, legislative changes, market dynamics,
environmental factors, organizational structure, and technology. Ranger Creek's ability to
address these interconnected factors will determine the effectiveness of its strategy to scale up
production and sustain growth. Calculations such as return on investment for new equipment,
break-even analyses for new product lines, and forecasting models to predict future sales trends
will be critical to inform the forthcoming recommendations.

Process flow chart for beer manufacturing:

Beer Manufacturing Process Flowchart:
 Milling:
 Grains, typically barley, are passed through a mill. This process cracks open the grain
husks, exposing the starches inside, which is essential for the subsequent mashing step.
 Mashing:
 The milled grains are then transferred into a large vessel called a mash tun. Here, they are
mixed with hot water. The heat activates enzymes within the grains, converting the
starches into fermentable sugars, resulting in a sugary liquid known as the mash.
 Lautering:
 The mash is transferred to the lauter tun, where the liquid part, now called wort, is
separated from the residual grain solids. The grains are rinsed to extract as much of the
sugar as possible.
 Boiling:
 The wort is moved to a large kettle for boiling. During this process, hops are added,
which contribute bitterness, flavor, and aroma to the beer. Boiling also sterilizes the wort
and stops enzymatic activity.
 Cooling:
 After boiling, the wort needs to be cooled rapidly to a temperature suitable for yeast
addition. This is typically done using a heat exchanger.
 Fermentation:
 The cooled wort is transferred to fermentation tanks, where yeast is added. The yeast
ferments the sugars in the wort, producing alcohol and carbon dioxide. This step can take
several days to weeks, depending on the beer style.
 Conditioning:
 Post-fermentation, the beer is transferred to conditioning tanks. In these tanks, the beer
matures, flavors develop, and the product stabilizes. This conditioning phase can vary in
length.
  Filtration:
 Before packaging, the beer is often filtered to remove residual yeast and other solids,
clarifying the beer.
 Packaging:
 The final step is packaging, where the beer is typically carbonated (if not already
naturally carbonated in the tank) and then filled into bottles, cans, or kegs.

Process flow chart for sprits manufacturing:

Spirits (Whiskey) Manufacturing Process Flowchart:

 Mashing:
 This is the initial stage where milled grains are mixed with water. The mixture is then
heated, which activates enzymes to convert starches into fermentable sugars. This process
creates a mash, which is the basis for fermentation.
 Fermentation:
 The mash is cooled to a suitable temperature, and yeast is added. The yeast ferments the
sugars present in the mash, producing alcohol and other compounds. This process can last
several days and results in a liquid known as "wash," with a relatively low alcohol
content.
 Distillation:
 The wash is then heated in a still. As it heats, alcohol and other volatiles vaporize. These
vapors are condensed back into a liquid form, concentrating the alcohol content. Whiskey
typically undergoes two rounds of distillation: the first distillation results in a product
called "low wines," and the second distillation further refines the spirit to a higher proof.
 Maturation:
  The distilled spirit is transferred to wooden barrels for aging. The interaction between the
spirit and the wood is crucial, as it imparts complex flavors and character to the whiskey.
The length of this aging process can vary significantly, often lasting several years.
 Blending and Dilution:
 After maturation, different batches of whiskey may be blended to achieve a consistent
flavor profile. Then, the whiskey is often diluted with water to reach the desired strength
or proof. This process is vital for controlling the final taste and alcohol content of the
product.
 Chilling:
 Some whiskeys undergo a chilling process, where the liquid is cooled to a low
temperature. This step can help in stabilizing the whiskey and removing certain unwanted
compounds, leading to a smoother final product.
 Filling:
 The final step involves filling the whiskey into bottles. This is typically done using
automated filling lines, ensuring consistent volume and efficient packaging for market
distribution.

Similarities and differences

The beer and whiskey production processes share some fundamental similarities, especially in
their initial stages, but they also diverge significantly as they progress. Here's a comparative
analysis:
Similarities:
 Milling:
 Both beer and whiskey production start with milling grains. This step is crucial for
breaking down the grain and making the starches accessible for conversion to sugars.
 Mashing:
 In both processes, the milled grains are then mixed with water and heated. This activates
enzymes that convert the starches into fermentable sugars, producing a mash.
 Fermentation:
 Both beer and whiskey undergo fermentation. Yeast is added to the mash, which ferments
the sugars, producing alcohol and carbon dioxide. The fermentation period varies based
on the product being produced.
Differences:
 Post-Fermentation Processes:
 Beer: After fermentation, beer undergoes conditioning, where it matures and develops
flavors. Post-conditioning, it is often filtered before being carbonated and packaged.
 Whiskey: Post-fermentation, the wash is distilled, not just once but typically twice for
whiskey. Distillation increases the alcohol content and purifies the liquid.
 Maturation:
  Beer does not require a maturation process in the same way whiskey does. Once beer has
conditioned, it is ready for packaging.
 Whiskey is aged in wooden barrels for several years, where it acquires distinct flavors
from the wood. This maturation process is critical for developing the character and
complexity of the whiskey.
 Blending and Dilution:
 In beer production, blending is not a standard step. The focus is more on achieving the
desired flavor profile during brewing and conditioning.
 For whiskey, blending various batches is common to achieve a consistent flavor profile.
After maturation, whiskey is often diluted with water to adjust the alcohol strength.
 Chilling:
 This step is unique to whiskey, where the liquid might be chilled to stabilize it and
remove unwanted compounds.
 Beer does not typically undergo a chilling process apart from the necessary cooling post-
boiling and pre-fermentation.
 Packaging:
 Beer is packaged in a variety of containers like bottles, cans, or kegs and often requires
carbonation before packaging.
 Whiskey packaging is generally simpler, typically involving filling the aged and possibly
diluted spirit into bottles.
while both beer and whiskey start with similar initial steps of milling, mashing, and fermenting
grains, their paths diverge significantly post-fermentation. Beer production focuses on flavor
development during boiling with hops and conditioning, while whiskey production involves a
critical distillation process followed by an extended aging period, often with additional steps like
blending, dilution, and chilling before bottling.

Sales forecaste from 2014 to 2019

We'll calculate the Compound Annual Growth Rate (CAGR) and then use it to forecast sales for
each year from 2014 to 2019. The CAGR method is used here to provide a simple and
straightforward forecast based on historical growth rates.This method assumes that the past
growth rate will continue, which may not always be the case, especially in a dynamic market.It's
important to periodically revise these forecasts based on actual performance and market changes.

Beer Sales Forecast Calculation

 Calculate CAGR for Beer (2011-2013)
 Initial Sales (2011): 1,000 barrels
  Final Sales (2013): 3,500 barrels
 Number of Years: 2 (from 2011 to 2013)
 CAGR Formula: (final sales/initial sales)1/number of years-1
 CAGR Calculation: =(3500/1000)1/2-1=87.08%
Forecast Sales for 2014-2019 Using CAGR
 Forecast Formula: Previous Year’s Sales×(1+CAGR)

Year Sales (Previous Year) CAGR (87.08%) calculation Forecasted Sales

2014 3,500 barrels 87.08% 3,500*(1+0.8708) 6,548 barrels
2015 6,548 barrels 87.08% 6,548*(1+0.8708) 12,250 barrels
2016 12,250 barrels 87.08% 12,250*(1+0.8708) 22,917 barrels
2017 22,917 barrels 87.08% 22,917*(1+0.8708) 42,872 barrels
2018 42,872 barrels 87.08% 42,872*(1+0.8708) 80,206 barrels
2019 80,206 barrels 87.08% 80,206*(1+0.8708) 150,049 barrels

So, to convert these sales into quarterly sales, we will include the seasonality index given in exhibit 8.

First, we divide the yearly sales into quarterly by dividing it by number of quarters in a year. For
example, for year 2014, sales is 6548. Quarterly sales are divided equally. 6548/4 =1637barrels per
quarter. But as given in that the sales for beer and spirit is seasonal with quarterly fluctuations. We will
include this seasonality by multiplying it with quarterly sales. 1637* 1 =1637 is final sales for year 2014
quarter 1 including seasonality. Same process will be used from 2014-2019 for both beer and spirit
quarterly sales forecast calculations.

YEA QUARTE BEER QUARTER BEER BEER QUARTERLY

R R YEARL LY SALES SEASON- SALES
Y ALITY
SALES INDEX
2014 Q1 6548 6548/4= 1637 1 1637*1=
1637
Q2 1637 1.2 1637*1.2= 1964.4
Q3 1637 1.1 1637*1.1= 1800.7
Q4 1637 1.2 1637*1.2= 1964.4
2015 Q1 12250 12250/4= 1 3062.5*1= 3062.5
3062.5
Q2 3062.5 1.2 3062.5*1.2=
3675
Q3 3062.5 1.1 3062.5*1.1=
3368.75
Q4 3062.5 1.2 3062.5*1.2=
3675
 2016 Q1 22917 22917/4= 1 5729.25*1= 5729.25
5729.25
Q2 5729.25 1.2 5729.25*1.2=
6875.1
Q3 5729.25 1.1 5729.25*1.1=
6302.175
Q4 5729.25 1.2 5729.25*1.2=
6875.1
2017 Q1 42872 42872/4 1 10718*1= 10718
=10718
Q2 10718 1.2 10718*1.2= 12861.6
Q3 10718 1.1 10718*1.1=
11789.8
Q4 10718 1.2 10718*1.2= 12861.6
2018 Q1 80206 80206/4= 1 20051.5*1= 20051.5
20051.5
Q2 20051.5 1.2 20051.5*1.2=
24061.8
Q3 20051.5 1.1 20051*1.1=
22056.65
Q4 20051.5 1.2 20051.5*1.2= 24061.8
2019 Q1 150049 150049/4= 1 37512.25*1= 37512.25
37512.25
Q2 37512.25 1.2 37512.25*1.2= 45014.7
Q3 37512.25 1.1 37512.25*1.1=41263.475
Q4 37512.25 1.2 37512.25*1.2= 45014.7
Spirits Sales Forecast Calculation
 Calculate CAGR for Spirits (2012-2013)
 Initial Sales (2012): 1,200 cases
 Final Sales (2013): 2,800 cases
 Number of Years: 1 (from 2012 to 2013)
 CAGR Formula: final (sales/initial sales)1/number of years-1
 CAGR Calculation: =(2800/1200)1/1-1=1.3333=133.33%

 Forecast Sales for 2014-2019 Using CAGR
 Forecast Formula: Previous Year’s Sales×(1+CAGR)

Year Sales (Previous Year) CAGR (133.33%) calculations Forecasted Sales

2014 2,800 cases 133.33% 2800*(1+1.333) 6,533 cases
2015 6,533 cases 133.33% 6,533*(1+1.333) 15,244 cases
2016 15,244 cases 133.33% 15,244*(1+1.333) 35,570 cases
2017 35,570 cases 133.33% 35,570*(1+1.333) 82,998 cases
2018 82,998 cases 133.33% 82,998*(1+1.333) 193,661 cases
2019 193,661 cases 133.33% 193,661*(1+1.333) 451,875 cases

YEA QUARTE SPIRIT QUARTER SPIRIT SPIRIT

R RS YEARLY LY SALES SEASONALITY QUARTERLY
SALES INDEX SALES
2014 Q1 6533 6533/4= 1 1633.25*1=
1633.25 1633.25
Q2 1633.25 1.05 1633.25*1.05=
1714.9125
Q3 1633.25 0.95 1633.25*0.95=
1551.5875
Q4 1633.25 2 1633.25*2=
3266.5
2015 Q1 15244 15244/4= 1 3811*1 =
3811 3811
Q2 3811 1.05 3811*1.05=
4001.55
Q3 3811 0.95 3811*0.95=
3620.45
Q4 3811 2 3811*2 =
7622
2016 Q1 35570 35570/4= 1 8892.5*1=
8892.5 8892.5
Q2 8892.5 1.05 8892.5*1.05=
9337.125
Q3 8892.5 0.95 8892.5*0.95=
8447.875
Q4 8892.5 2 8892.5*2=
17785
2017 Q1 82998 82998/4= 1 20749.5*1=
20749.5 20749.5
Q2 20749.5 1.05 20749.5*1.05=
21786.975
Q3 20749.5 0.95 20749.5*0.95=
19712.025
Q4 20749.5 2 20749.5*2=
41499
2018 Q1 193661 193661/4= 1 48415.25*1=
48415.25 48415.25
Q2 48415.25 1.05 48415.25*1.05=
50836.0125
Q3 48415.25 0.95 48415.25*0.95=
45994.4875
Q4 48415.25 2 48415.25*2=
96830.5
 2019 Q1 451875 451875/4= 1 112968.75*1=
112968.75 112968.75
Q2 112968.75 1.05 112968.75*1.05=
118617.1875
Q3 112968.75 0.95 112968.75*0.95=
107320.3125
Q4 112968.75 2 112968.75*2=
225937.5

Need for equipment:

To provide a detailed analysis of the equipment needs for Ranger Creek Brewing and Distilling
to meet the forecasted volumes from 2014 to 2019, we need to consider the current production
capacity and the projected growth based on the data from the exhibits and the case. Let's analyze
the requirements quantitatively and qualitatively:
Current Production Capacity:
 Beer Production:
 The facility has a 7,500 square-foot area, with 6,000 square feet for brewing.
 The fermentation process is a bottleneck. Assuming the existing fermentation tanks are
used both for fermentation and conditioning, and considering the fermentation time of 1.5
weeks, the current setup limits the number of batches that can be processed annually.
 The milling equipment has a capacity of 1,800 pounds of grain per hour, and the beer
mash tank produces 930 gallons per batch.
 Spirits Production:
 The distillation batch takes around 15 hours for the first run and 7 hours for the second,
indicating a significant time investment for each distillation batch.
 The aging process for whiskey is a major bottleneck, with bourbon ready for bottling in
about one year due to the Texas heat impacting the aging process.
Equipment Needs Based on Forecasted Sales:

Fermentation Tanks for Beer:

 With the substantial increase in beer production forecasted, additional fermentation tanks
will be needed. For instance, if the production is to triple, it would be reasonable to
suggest at least doubling the number of fermentation tanks.
 The size and number of new tanks should be decided based on the space available and the
desired brewing schedule.
Distillation Equipment for Spirits:
 Given the significant increase in spirits production, additional stills may be required. The
size of these stills should be determined based on the desired batch size and the available
space in the facility.
Aging Capacity for Spirits:
  The forecast suggests a massive increase in spirits production, particularly whiskey. This
will require a proportional increase in the number of barrels and the space for aging them.
Ranger Creek should consider either expanding their current storage space or acquiring
additional facilities.
Packaging Line:
 The current bottling and kegging lines might not be sufficient to handle the increased
output. Upgrading these lines for higher efficiency and capacity will be crucial.
Raw Material Storage and Handling:
 Increased production means more raw materials (grains, hops, yeast, etc.), which requires
larger storage facilities and efficient handling systems.
Utility Upgrades:
 Utilities such as water, electricity, and waste management systems will need to be
upgraded to handle the increased production.
Qualitative Suggestions:
 Quality Control: As production scales, maintaining the quality that Ranger Creek is
known for becomes more challenging. Investing in quality control processes and
technology is vital.
 Workforce Training: With new equipment and expanded operations, the workforce will
need training to ensure efficiency and safety.
 Sustainability: Consider sustainable practices in expansion plans, such as energy-
efficient equipment and waste reduction techniques.
 Market Responsiveness: Stay attuned to market trends to ensure that the expanded
production aligns with consumer preferences and demand.

Ranger Creek Brewing and Distilling faces a significant challenge in scaling up its production to
meet the forecasted demand. This will require careful planning and substantial investment in
equipment and infrastructure. Balancing this expansion while maintaining product quality and
sustainability will be key to their continued success.

4) Recommended Decisions:
Expand Fermentation Capacity:
 Considering the current 7,500 square-foot facility with 6,000 square feet dedicated to
brewing (Exhibit 1), expand fermentation capacity by adding new tanks. Given the
existing space constraints, prioritize acquiring compact, high-efficiency tanks to
maximize utilization of the available area.
Enhance Distillation and Aging Facilities:
 Address the bottleneck in spirits production due to the lengthy distillation process (15
hours for the first run and 7 for the second, and aging requirements (at least one year).
 Invest in additional stills and significantly increase barrel storage to manage the projected
growth in spirits sales, which are expected to reach 451,875 cases by 2019 (Forecast
Calculation).
Upgrade Packaging Line:
 Upgrade the bottling and kegging lines to handle the increased output efficiently. This is
essential considering the projected growth in beer sales from 3,500 barrels in 2013 to
150,049 barrels by 2019 (Forecast Calculation).
Optimize Plant Layout:
 Redesign the plant layout for operational efficiency. This involves strategic placement of
new equipment and reorganizing existing setups to streamline the production process,
considering the space limitation in the current facility.
Implement Advanced Quality Control Systems:
 With the increase in production volume, invest in state-of-the-art quality control systems
to maintain the integrity of beer and spirits. This aligns with the company’s reputation for
award-winning products.
Financial Strategy and Investment Optimization:
 Given the significant costs associated with new equipment (e.g., mash kettle at $25,000,
brew kettle at $20,000, Exhibit 6), develop a financial strategy that balances expansion
needs with fiscal prudence. This includes exploring financing options like loans or
investors, considering the existing startup costs were around $1,000,000.
Legislative Compliance and Market Strategy:
 Adapt to Texas's evolving beer laws, which could impact distribution and sales strategies.
Develop a compliance framework to navigate these changes effectively without
disrupting the business model.
Enhance Raw Material Storage and Supply Chain Management:
 Increase storage facilities for raw materials, considering raw materials are the largest
expense in the cost structure (Exhibit 10). Ensure a robust supply chain to support
increased production demands.
Workforce Expansion and Training:
 Scale up the workforce in line with production expansion. Provide comprehensive
training to ensure that staff can effectively operate new equipment and adhere to quality
standards.
Sustainability and Efficiency Improvements:
 Invest in energy-efficient technologies and sustainable practices, especially considering
the environmental concerns in Texas.
These decisions are tailored to Ranger Creek’s current situation, focusing on scaling up
production capacity while maintaining product quality, adhering to new legislative requirements,
and managing financial implications.

5) Effectiveness of Recommended Decisions:

The recommended decisions are crafted to specifically address the critical issues facing Ranger
Creek Brewing and Distilling, ensuring that the company can effectively manage its projected
growth while maintaining the quality of its products and adapting to new legislative
requirements. Here's how each decision addresses these critical issues:
Expand Fermentation Capacity:
 Adding new, high-efficiency fermentation tanks directly addresses the production
bottleneck for beer, enabling Ranger Creek to meet the forecasted increase in demand
(from 3,500 barrels in 2013 to 150,049 barrels by 2019). This expansion is crucial to
capitalize on the growing market without sacrificing production turnaround times.
Enhance Distillation and Aging Facilities:
 Investing in additional stills and increasing barrel storage capacity directly tackles the
spirits production bottleneck. This expansion will allow Ranger Creek to accommodate
the substantial projected growth in spirits sales (up to 451,875 cases by 2019),
particularly important given the lengthy aging process required for whiskey.
Upgrade Packaging Line:
 Upgrading the packaging line for both beer and spirits is essential to manage the
increased volume efficiently. This ensures that Ranger Creek can package and distribute
its products at a rate that matches production, thus preventing bottlenecks in the final
stages of the supply chain.
Optimize Plant Layout:
 Redesigning the plant layout for operational efficiency will streamline the production
process. This ensures that the expanded operations do not lead to inefficiencies or quality
issues, even as the scale of production increases within the existing space constraints.
Implement Advanced Quality Control Systems:
 Quality control is vital for maintaining the integrity of Ranger Creek’s products.
Advanced systems will ensure that the increase in production volume does not
compromise the award-winning quality that the brand is known for, thus maintaining
customer trust and market position.
Financial Strategy and Investment Optimization:
 A balanced financial strategy is key to managing the significant investment required for
expansion. By carefully planning the investment in new equipment and facilities, Ranger
Creek can achieve growth without jeopardizing its financial health, ensuring long-term
sustainability.
Legislative Compliance and Market Strategy:
 Developing a strategy to adapt to new beer laws in Texas will allow Ranger Creek to
navigate potential challenges in distribution and sales models. This proactive approach
ensures that legislative changes do not disrupt business operations or growth
opportunities.
Enhance Raw Material Storage and Supply Chain Management:
 Increasing storage capacity and strengthening the supply chain is critical to support
higher production volumes. Efficient supply chain management will ensure uninterrupted
production and help control costs, which is crucial given that raw materials are a
significant expense.
Workforce Expansion and Training:
  Expanding and training the workforce is essential to handle the increased operational
scope. Skilled staff will ensure that the expanded facilities and new equipment are
operated efficiently and safely, maintaining high productivity levels.
Sustainability and Efficiency Improvements:
 Investing in sustainable and energy-efficient practices not only reduces operational costs
but also aligns with environmental concerns. This approach can improve the company’s
public image and appeal to environmentally conscious consumers.
In summary, these decisions form a comprehensive strategy to increase Ranger Creek’s
production capacity in response to market demand, while ensuring product quality, legislative
compliance, financial viability, and operational efficiency.

6) Execution

Expand Fermentation Capacity

Responsibilities:
 Operations team to oversee installation of new fermentation tanks.
 Procurement to handle sourcing and purchasing of tanks.
Organizational Structure Changes:
 Expand the operations department to include a specialized sub-team for equipment
management.
Management Actions:
 Coordinate with vendors for the purchase and installation of tanks.
 Allocate budget and resources for the expansion.
Administrative Mechanisms:
 Use project management tools to track installation progress.
 Update operational procedures to incorporate new equipment.

Enhance Distillation and Aging Facilities

Responsibilities:
 Assign a project lead within the operations team for distillation and aging expansion.
 Quality control to develop protocols for new distillation processes.
Organizational Structure Changes:
 Introduce a distillation and aging focus group within the production department.
Management Actions:
 Plan and oversee construction or expansion of aging facilities.
 Secure additional distillation equipment.
Administrative Mechanisms:
 Implement inventory tracking for aging barrels.
 Regular reporting and monitoring of distillation and aging processes.
Upgrade Packaging Line
Responsibilities:
 Operations team responsible for upgrading and maintaining the packaging line.
 Finance to manage the investment and budgeting for upgrades.
Organizational Structure Changes:
 Establish a dedicated packaging line management team.
 Management Actions:
 Evaluate and select packaging line solutions.
 Oversee the implementation and integration of new packaging systems.
Administrative Mechanisms:
 Develop new operational protocols for the upgraded packaging line.
 Train staff on new equipment and procedures.

Optimize Plant Layout

Responsibilities:
 Operations team to work with external consultants for plant redesign.
 HR to manage any changes in workforce deployment due to layout changes.
Organizational Structure Changes:
 Create a cross-functional team for overseeing layout optimization.
Management Actions:
 Develop a detailed plan for plant rearrangement.
 Ensure minimal disruption during the transition phase.
Administrative Mechanisms:
 Regular updates and communication with employees about changes and impacts.
 Adjust safety and operational protocols to fit the new layout.

Implement Advanced Quality Control Systems

Responsibilities:
 Quality control department to implement and monitor new systems.
 Operations to ensure integration of quality control measures in production.
Organizational Structure Changes:
 Expand the quality control department, possibly adding new roles or teams.
Management Actions:
 Select and procure advanced quality control technologies.
 Set standards and benchmarks for product quality.
Administrative Mechanisms:
 Develop a quality control manual and training programs.
 Establish a regular audit and feedback loop for quality assurance.
Financial Strategy and Investment Optimization
Responsibilities:
 Finance department to manage funding and investment strategies.
 Senior management to make final decisions on financial allocations.
Organizational Structure Changes:
 Strengthen the finance team with additional expertise in investment analysis.
Management Actions:
 Conduct a thorough financial analysis of expansion costs versus projected ROI.
 Explore various financing options, including loans and investor funding.
Administrative Mechanisms:
 Implement financial monitoring tools for tracking investments and returns.
 Regular financial reporting to stakeholders.

Legislative Compliance and Market Strategy

Responsibilities:
 Legal team to ensure compliance with new legislation.
 Marketing and sales teams to align strategies with market and legislative changes.
Organizational Structure Changes:
 Introduce a regulatory affairs role or team within the company.
Management Actions:
 Stay updated on legislative changes and assess their impact on operations.
 Adapt marketing and sales strategies to comply with new regulations.
Administrative Mechanisms:
 Regular legal briefings and updates for relevant teams.
 Revise marketing and sales protocols as needed to stay compliant.

Enhance Raw Material Storage and Supply Chain Management

Responsibilities:
 Operations for managing storage expansion.
 Supply chain team for optimizing raw material procurement and logistics.
Organizational Structure Changes:
 Potentially expand the supply chain team to manage increased demands.
Management Actions:
 Plan and execute storage facility expansion.
 Develop relationships with additional suppliers or negotiate better terms with existing
ones.
Administrative Mechanisms:
 Implement a more robust supply chain management system.
 Regularly review and adjust storage and inventory practices.
Workforce Expansion and Training
Responsibilities:
 HR to oversee recruitment, training, and integration of new staff.
 Department heads to assess and communicate staffing needs.
Organizational Structure Changes:
 Expand HR department to handle increased recruitment and training needs.
Management Actions:
 Develop a comprehensive workforce expansion plan.
 Implement training programs for both new and existing employees.
Administrative Mechanisms:
 Update HR policies and procedures to accommodate a larger workforce.
 Track and assess the effectiveness of training programs.

Sustainability and Efficiency Improvements

Responsibilities:
 Operations team to implement sustainable practices and energy-efficient technologies.
 Sustainability officer or team to oversee and report on sustainability initiatives.
Organizational Structure Changes:
 Introduce a sustainability-focused role or team within the organization.
Management Actions:
 Identify and invest in energy-efficient and eco-friendly technologies and practices.
 Set goals for sustainability and efficiency improvements.
Administrative Mechanisms:
 Regular sustainability reporting and audits.
 Employee engagement and training in sustainable practices.

Each decision is supported by a structured execution plan, ensuring that Ranger Creek Brewing
and Distilling can effectively address the critical issues and achieve sustainable growth.

7) SCENARIO PLANNING

PROBLEM 1
Few projects, such as the setup of new equipment, capacity growth, and marketing campaigns,
may result in higher-than-expected costs. This financial overload might impair the organization's
cash flow and operational stability.
Backup Plan
· Instead of investing in all sectors at the same time, choose initiatives based on current
ROI and strategic value. Begin with quick wins such as keg cleaning automation, which
provides immediate returns.
· Investigate alternative financing possibilities, such as loans, investor investment, or
government grants, particularly those that assist small enterprises and local production.
· Implement stringent monitoring of finances, including monthly cash flow and cost
assessments. Spending should be adjusted depending on actual financial performance
against predictions.
· Implement stringent cost controls and explore possible savings opportunities, such as
improving energy efficiency or revising contracts with suppliers.
PROBLEM 2
Implementing new procedures and equipment might cause temporary delays in production. As a
result, order fulfillment may be delayed, affecting relationships with clients and revenues.

Backup plan
· Implement changes gradually instead of immediately to allow for adaptations and to
minimize disturbance.
· Provide extensive training for employees on new machinery and procedures. Give
additional assistance throughout the early phases of execution.
· Stock up on supplies ahead of big changes to cover any short-term production gaps.
· Keep lines of contact accessible to consumers. Inform them about anticipated delays
ahead of time and tell them that every effort will be made to minimize their impact.