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National Cranberry Case Study

In: Business and Management

Submitted By leeleesnowy
Words 576
Pages 3
3.
Dumping Capacity
# Kiwanee dumpers 5Average time to dump 7.5 minutes (max:10, min:5)
Average weight of berries in truck 75 bbls
Total Dumping capacity 5 * 75 * 60 / 7.5 = 3000 bbls/hr
Holding Capacity
Total capacity of bins numbered 1-16 250*16 = 4000 bbls
Total capacity of bins numbered 17-24 250*8 = 2000 bbls
Total capacity of bins numbered 25,26,27 400 * 3 = 1200 bbls
Destoning Capacity
1500bbls/hr x 3 = 4500 bbls / hr
Dechaffing capacity
1500bbls/hr x 3 = 4500 bbls / hr
Drying Capacity
200bbls/hr x 3 = 600bbls/hr

Therefore, we can see that the drying stage is the bottleneck.

5. Overtime issue on peak day: total wet berries in one peak day: 18340bbls x 70% = 12838bbls processing rate: 600bbls/hr (bottle neck) total working hours = 12838bbls / 600bbls/hr = 21.4 hrs overtime = 21.4hrs - 12hrs = 9.4 hrs.

(We found that two shifts can help with the situation, which means that the workers will work 16 hours a day (7am-3pm, and 3pm - 11pm). And in this scenario, overtime should be 21.4 hrs - 16hrs = 5.4hrs.)

6. Truck waiting
We assume that trucks starts arriving at 7am, and we already knew the bottle neck will be the drying stage only for wet berries, so

Inventory piled up rate = rate of wet berries needed to be processed - processing rate of bottle neck = 18340bbls x 70% / 12 hrs - 600bbls/hr = 1070bbls / hr - 600bbls / hr = 470bbls / hr (a barrel of cranberries weighs 100lbs)

And we know bins #17 - #27 (total 11 bins) can hold 3200bbls, so we can get how long wet berries will be filled in the bins. 3200bbls / 470bbls/hr = 6.8 hrs, which means that trucks start waiting from 1:48pm.

At the end of the day, we will have total inventory waiting to be processed: 470bbls/hr x 12 hrs= 5640bbls, out of which, 3200bbls will be in bins, and the rest 2440bbls will be in trucks.

And it will take 2440bbls / 600bbls/hr = 4 hrs to empty the trucks, which means that at 11pm, no trucks will be waiting.

Waiting time = 16hrs - 6.8hrs = 9.2 hrs

7. Recommendations
1) Adding one dryer: separators grading capacity: 1,350 bbls / hour
Wet-harvest dryer capacity: 600 bbls / hour dry-harvest supply to separators: 459 bbls / hour
600 + 459 = 1,059 bbls
1,350 - 1,059 = 291 bbls underutilized at the separators add one dryer to the wet dry harvest dryers: 600 + 200 = 800 bbls
800 + 459 = 1,259 bbls
1,350 - 1,259 = 91 bbls underutilized at the separators (not enough for another dryer!)
If dry berry supply (459 bbls) decreases in the future so that the 91 bbls increases to 200 bbls then it is recommended to purchase another dryer.

2)The berry color grading issue:
Buy the vision system for $40,000

support for this conclusion:
$1.50 a barrel was paid for grade 3 berries
450,000 bbls were graded as #3 berries in 1995 but only half were actually #3 berries due to inconsistent quality control.
This means that 450,000 x $1.50 = $675,000 was paid for grade 3 berries but they should have only paid $337,500 so the second half, $337,500, was wasted expenses.
In order to justify the $40,000 vision system, it has to save more than $40,000 over the system's lifetime, which is expected since the wasted expenses are $337,500.

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