National Cranberry Cooperative

NATIONAL CRANBERRY CO-OPERATIVE CASE STUDY * Nishi Sharma In 1971, National Cranberry Cooperative faced recurring operational problems that affected the productivity and relationship of NCC to growers. This analysis will discuss how NCC can improve its operation before the peak-season comes in. The analysis was based from facts cited in the case, using tools such as but not limited to process flow diagram, cost, benefit and utilization analysis, and work-force scheduling. The author recommends solution that will not just improve NCC's operations but will also increase plant's capacity and decrease its cost thereby leading to long-term savings for the growers. Problem Statement/Key Issues This case analysis will investigate two primary problems faced by NCC (1) Long waiting period of trucks during unloading of berries at RP1 and (2) Too much overtime cost. This case will also look at a secondary problem, specifically, the inaccuracy of grading of berries. Supporting Argument It is necessary to address the truck's queuing problem in 1970 in order to attain NCC's planned increase in output of water harvested crop from 58% to 70% the following year. The queuing/idle time during unloading also creates unnecessary costs particularly the cost of leasing trucks and hiring drivers. Also, Cranberries' market price is influenced by the government regulation Cranberry Marketing Order 1070, which mandates owners to scrap 10% or 200,000 bbls of harvested crops, thereby reducing income for the same resources used. With this, it is important that NCC manage its resources properly including scheduling of workforce (seasonal ; full-time) to reduce the costs like the overtime pay. With the cost amounting to $112,500 ($450,000/2Ãâ€"0. 5) incurred for paying extra premiums to second graded berries, it is important to look at the grading process and assess the need for installing an equipment that can help reduce the said cost. Alternatives The following are the alternatives proposed by Mr. Williston: 1. To buy and install new dryers 2. Convert dry berry holding bins to store water harvested or dry berries 3. Install Light Meter System for color grading PROCESS DIAGRAM – NATIONAL CRANBERRIES CO-OPERATIVE Assumptions:    We have assumed that: †¢ There is a cost associated with trucks waiting to be unloaded and it is $5 per hour. †¢ We have not considered per hour operating    cost of plant †¢ Overtime for both regular and part time worker has been taken to be $ 6. 50 per hour. †¢ In calculating the payback time, the same cost saving will occur every day. It is given in case that wet berries will make 70 % of total berries and that normal running hours for plant is 11 (12-1) hours. Case 1: 10000 bbl/day Wet Berries (WB) ( 7000 bbl/day Dry Berries (DB) ( 3000bbl/day Total Time = 11 Hrs WB feed=7000/11 = 637 bbl/hr DB feed= 3000/11 = 273 bbl/hr Minimum processing rate for WB is at dryers, which is = 600 bbl/hr Minimum processing rate for DB is = 1500 bbl/hr Hence, after 11 hours total accumulation of WB = (637-600)*11 = 407 bbl Overtime = 407/600 = 0. 7 hrs Now, assuming this is not a peak season, we have considered only 27 workers. Since plant is working suboptimal level during overtime , only two-third of the work force will be working on wet berries drying process. =2/3 work force = 20*(2/3) = 12 Savings per day = 12 * 6. 5= 78 Savings for season = 78* 90 = 7020 If we add another dryer, to save overtime cost, cost will be = 40000 Analysis Considering the cost of depreciation and cost of investment in dryer(8-10%) it will not be economical to buy another dryer. National Cranberry Cooperative Case Report: National Cranberry Cooperative Fill in your name in the header. Please read the Assignment Collaboration Guidelines in Course Syllabus: Collaboration between groups is not allowed; however, if you hear something from some other group, please give a reference. Below, write your answers to Questions 1-4 (on BB/Cases). Your analysis should be based on the assumptions listed in the Syllabus. If you need to make additional assumptions to answer a question, clearly state them, logically defend them, and then proceed to answer the question accordingly.The idea is to answer the questions concisely. Double spacing is preferred, 1. 5-line spacing is the minimum (consider the reader’s eye strain). 1. Mark the capacity and utilization of each resource in the process flow diagram at the end of this document. Briefly describe how you calculate the capacity and utilization here. [20 points] On average, 18000 barrels arrive over the 12hr span that the business is open. This means approximately 1500 barrels of berries are input into the process per hour (18000barrels/12hrs). The capacity of the Kiwanee dumpers was given as 3000 b/hr. and I was able to calculate the implied utilization by dividing the berry input rate by the capacity(1500bbl/hr divided by 3000bbl/hr). To calculate the actual utilization of the dumpers, you must first determine the flow rate of the system. Only 25% of the berries are dry and 75% are wet. This sums to 375 dry berries per hour (1500 input/hr x. 25) and 1125 wet berries per hour (1500 input x . 75). The dry berries have 16 bins that hold 250 barrels a piece, adding up to a total of 4000 berries that can be stored. The wet berries have 8 bins that hold 250 barrels and 3 bins that hold 400 barrels, adding up to 3200 barrels total for storage.The capacity of the DeStoners was given as 1500bbl/hr. The implied utilization would be the input rate (1500bbl/hr) divided by the capacity (1500 bbl/hr). Since the bottleneck does not impact t he dry berries, the actual and implied utilization will be the same for the dry berries in all facets of the operation. The capacity of the Dechaffers for the dry berries was also given as 1500 bbl/hr and once again the implied and actual utilization will be 1. 0. Switching to the Wet Berries, we see that there are two Dechaffers that can each store up to 1500bbl/hr, which will add up to a capacity of 3000bbl/hr.We can calculate the implied utilization of the wet berry Dechaffer by dividing the input rate (1500bbl/hr) by the capacity (3000bbl/hr) and the actual utilization by dividing the Flow Rate (600bbl/hr) by the capacity (3000bbl/hr). The Dryers set the standard for the wet berries because they are the bottleneck of the operation. There are three dryers that can process 200bbl/hr, giving us a total capacity of 600bbl/hr. The implied utilization is not very realistic because it takes the 1500bbl/hr input rate and divides it by the 600bbl/hr capacity. The actual utilization of a bottleneck is always 1. because it is operating at maximum capacity. Lastly, there are three separators that have a capacity of 400bbl/hr each, giving us a total of 1200bbl/hr. The implied utilization will be discovered as 1. 25 because you are taking the 1500bbl/hr input rate and dividing it by 1200bbl/hr capacity. The actual utilization can be found by 600bbl/hr (wet berries) plus 375bbl/hr (dry berries) and using them as your input rate. So you will divide the 975bbl/hr by 1200bbl/hr capacity and get . 8125. 2. Enter your answer and supporting arguments for question 2 here. [10 points] The current maximum throughput rate is 975bbl/hr. 75bbl/hr can be processed by the dry berries because they have the ability to operate at maximum capacity. On the wet berry side, the process is slowed by the dryers, which represent the bottleneck of the operation. Since the dryers can only process 600bbl/hr, we will add the 600bbl/hr and the 375bbl/hr to get a total of 975bbl/hr. 3. Enter your ans wer and supporting arguments for question 3 here. [30 points] *See attached diagram 4. Enter your answer and supporting arguments for question 4 here. [40 points] The possible capital investments I used were adding one more dryer, and swapping one bin from the dry berry operation to the wet berry.Buying the fifth Kiwanee dumper was a misguided investment because the real object should be to increase your bottleneck to speed up the operation. The capacity of the dumpers is 600bbl/hr, so having one less dumper would only drop this to 2400bbl/hr. The throughput rate of the entire system is only 975bbl/hr, so the focus ultimately should be turned to increasing the capacity of the dryers instead of the capacity of the dumpers. The attached excel spreadsheet will explain the ultimate benefits of the proposed capital investments I have offered. Bulk and Bag Separators C = 1200b/hrU = 1. 25, . 8125 Dryers C =600 b/hrU = 2. 5, 1. Destoners C =1500b/hrU =1. 0, 1. 0 Kiwanee Dumpers C = 3000b/h rU = . 5, . 325 Trucks in Queue Bins 1-16 storage =4000 Bins 17-27 storage = 3200 Dechaffers C = 1500b/hrU = 1. 0, 1. 0 Dry berries 375†¦Ã¢â‚¬ ¦. bbl/hr Wet berries 1125†¦Ã¢â‚¬ ¦ bbl/hr Dechaffers C = 3000b/hrU = . 5, . 20 Bulk and Bag Separators C = 1200b/hrU = 1. 25, . 8125 Dryers C =600 b/hrU = 2. 5, 1. 0 Destoners C =1500b/hrU =1. 0, 1. 0 Kiwanee Dumpers C = 3000b/hrU = . 5, . 325 Trucks in Queue Bins 1-16 storage =4000 Bins 17-27 storage = 3200 Dechaffers C = 1500b/hrU = 1. 0, 1. 0 Dry berries 375†¦Ã¢â‚¬ ¦. bbl/hr Wet berries 1125†¦Ã¢â‚¬ ¦ bbl/hr Dechaffers C = 3000b/hrU = . 5, . 20 National Cranberry Cooperative Case Report: National Cranberry Cooperative Fill in your name in the header. Please read the Assignment Collaboration Guidelines in Course Syllabus: Collaboration between groups is not allowed; however, if you hear something from some other group, please give a reference. Below, write your answers to Questions 1-4 (on BB/Cases). Your analysis should be based on the assumptions listed in the Syllabus. If you need to make additional assumptions to answer a question, clearly state them, logically defend them, and then proceed to answer the question accordingly.The idea is to answer the questions concisely. Double spacing is preferred, 1. 5-line spacing is the minimum (consider the reader’s eye strain). 1. Mark the capacity and utilization of each resource in the process flow diagram at the end of this document. Briefly describe how you calculate the capacity and utilization here. [20 points] On average, 18000 barrels arrive over the 12hr span that the business is open. This means approximately 1500 barrels of berries are input into the process per hour (18000barrels/12hrs). The capacity of the Kiwanee dumpers was given as 3000 b/hr. and I was able to calculate the implied utilization by dividing the berry input rate by the capacity(1500bbl/hr divided by 3000bbl/hr). To calculate the actual utilization of the dumpers, you must first determine the flow rate of the system. Only 25% of the berries are dry and 75% are wet. This sums to 375 dry berries per hour (1500 input/hr x. 25) and 1125 wet berries per hour (1500 input x . 75). The dry berries have 16 bins that hold 250 barrels a piece, adding up to a total of 4000 berries that can be stored. The wet berries have 8 bins that hold 250 barrels and 3 bins that hold 400 barrels, adding up to 3200 barrels total for storage.The capacity of the DeStoners was given as 1500bbl/hr. The implied utilization would be the input rate (1500bbl/hr) divided by the capacity (1500 bbl/hr). Since the bottleneck does not impact t he dry berries, the actual and implied utilization will be the same for the dry berries in all facets of the operation. The capacity of the Dechaffers for the dry berries was also given as 1500 bbl/hr and once again the implied and actual utilization will be 1. 0. Switching to the Wet Berries, we see that there are two Dechaffers that can each store up to 1500bbl/hr, which will add up to a capacity of 3000bbl/hr.We can calculate the implied utilization of the wet berry Dechaffer by dividing the input rate (1500bbl/hr) by the capacity (3000bbl/hr) and the actual utilization by dividing the Flow Rate (600bbl/hr) by the capacity (3000bbl/hr). The Dryers set the standard for the wet berries because they are the bottleneck of the operation. There are three dryers that can process 200bbl/hr, giving us a total capacity of 600bbl/hr. The implied utilization is not very realistic because it takes the 1500bbl/hr input rate and divides it by the 600bbl/hr capacity. The actual utilization of a bottleneck is always 1. because it is operating at maximum capacity. Lastly, there are three separators that have a capacity of 400bbl/hr each, giving us a total of 1200bbl/hr. The implied utilization will be discovered as 1. 25 because you are taking the 1500bbl/hr input rate and dividing it by 1200bbl/hr capacity. The actual utilization can be found by 600bbl/hr (wet berries) plus 375bbl/hr (dry berries) and using them as your input rate. So you will divide the 975bbl/hr by 1200bbl/hr capacity and get . 8125. 2. Enter your answer and supporting arguments for question 2 here. [10 points] The current maximum throughput rate is 975bbl/hr. 75bbl/hr can be processed by the dry berries because they have the ability to operate at maximum capacity. On the wet berry side, the process is slowed by the dryers, which represent the bottleneck of the operation. Since the dryers can only process 600bbl/hr, we will add the 600bbl/hr and the 375bbl/hr to get a total of 975bbl/hr. 3. Enter your ans wer and supporting arguments for question 3 here. [30 points] *See attached diagram 4. Enter your answer and supporting arguments for question 4 here. [40 points] The possible capital investments I used were adding one more dryer, and swapping one bin from the dry berry operation to the wet berry.Buying the fifth Kiwanee dumper was a misguided investment because the real object should be to increase your bottleneck to speed up the operation. The capacity of the dumpers is 600bbl/hr, so having one less dumper would only drop this to 2400bbl/hr. The throughput rate of the entire system is only 975bbl/hr, so the focus ultimately should be turned to increasing the capacity of the dryers instead of the capacity of the dumpers. The attached excel spreadsheet will explain the ultimate benefits of the proposed capital investments I have offered. Bulk and Bag Separators C = 1200b/hrU = 1. 25, . 8125 Dryers C =600 b/hrU = 2. 5, 1. Destoners C =1500b/hrU =1. 0, 1. 0 Kiwanee Dumpers C = 3000b/h rU = . 5, . 325 Trucks in Queue Bins 1-16 storage =4000 Bins 17-27 storage = 3200 Dechaffers C = 1500b/hrU = 1. 0, 1. 0 Dry berries 375†¦Ã¢â‚¬ ¦. bbl/hr Wet berries 1125†¦Ã¢â‚¬ ¦ bbl/hr Dechaffers C = 3000b/hrU = . 5, . 20 Bulk and Bag Separators C = 1200b/hrU = 1. 25, . 8125 Dryers C =600 b/hrU = 2. 5, 1. 0 Destoners C =1500b/hrU =1. 0, 1. 0 Kiwanee Dumpers C = 3000b/hrU = . 5, . 325 Trucks in Queue Bins 1-16 storage =4000 Bins 17-27 storage = 3200 Dechaffers C = 1500b/hrU = 1. 0, 1. 0 Dry berries 375†¦Ã¢â‚¬ ¦. bbl/hr Wet berries 1125†¦Ã¢â‚¬ ¦ bbl/hr Dechaffers C = 3000b/hrU = . 5, . 20