Cost
Nov 19th, 2019

# National Cranberry Cooperative Essay

1. Develop a process flow diagram for processing cranberries (both wet and dry). Show the capacities at the different stages.

2. What are the sources of variability affecting NCC’s operations? There are different sources of variability that are affecting NCC’s operations. • NCC received both fresh fruit and process fruit in its business. Fresh fruit is a labor-intensive process that uses more workers during a peak season. Process fruit is a highly mechanized process that uses different processes. There is no problem with fresh fruit processing, while it faced some problems in process fruit processing such as waiting time on unload process, increasing cost of trucks etc.

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(National Cranberry Cooperative, 1983).

• NCC also used two types of harvesting system in this business such as water harvesting and dry harvesting. Water harvesting generated 20% more yield in the business as compared to dry harvesting. • It is also considerable that wet berries are directly sent to dechaffing units, while for dry berries, destoning process is necessary before dechaffing process.

These are some variable sources that are used by NCC and that affect the NCC’s business operation and its effectiveness.

3. Suppose that a peak harvest-season day involves 18,000 barrels of berries, 70% of them wet harvested, arriving uniformly over a twelve-hour period from 7 a.m. to 7 p.m. Would trucks have to wait to unload? When during the day would trucks be waiting? How much truck waiting time would you expect? What is the maximum number of trucks waiting during the day?

• Total barrels of berries in 12 hour time period = 18000 bbls

• Holding bins capacity for wet berries = 3200 bbls (It is assumed that holding bins 17-+24 will be used for wet berries due to peak season, so total capacity will be 3200 bbls. [(250*8)+(400*3)].)

• Holding bin capacity for dry berries = 4000 bbls (16*250)

• Average capacity of truck = 75 bbls

• Number of trucks per hour = 14 (1050/75)

• The average wet berries arrival rate = 1050 bbls per hour [(18000/12)*70%]

• The average arrival rate of dry berries = 450 bbls per hour [(18000/12)*(30%]

If it is assumed that processing will start at 7:00 am, then the holding bins will continue to be filled at the rate of 1050 bbls for wet berries and 450 bbls for dry berries. The holding bins that are capable to hold wet berries will be filled completely after 3.03 minutes (i.e. 3200/1050) and that will be at 10:03 am. The trucks that carry wet berries will have to wait after that. At the same time the process will start from 11:00 am in this four hour time period (i.e. 7:00 am to 11:00 am) and the quantity of wet berries will be 4,200 bbls (i.e. 1050*4) and for dry berries it will be 1,800 bbls (i.e. 450*4). Holding bins are not capable to hold all bins so an excess of 1,000 bbls will wait on arriving trucks. The process will start at 11:00 am for dry berries with 600 bbls per hour that are higher than the rate of its arrival. The 1,800 bbls of dry berries will decline at the rate of 150 bbls per hour.

The process for wet berries will also start at 11:00 am with a rate of 600 bbls per hour that is less than its arrival rate. It will cause growing queue of trucks until 7:00 pm. This will cause 7,800 bbls in system and 3,200 in bins and the rest will be in the truck. The trucks would continue to unload until 2:40 am and the process will continue until 8:00 am. The berries that will be processed are 600*12 – i.e. 7,200 bbls. The total waiting hours for trucks will be as follow as shown:

• Processing rate = 600 bbls per hour

• Arrival rate = 1050 bbls per hour

• Processing time for 3,200 bbls of wet berries = 5.3 hours or 5.18 minutes

• Next process will start at 3:24 pm.

• Total berries processed = 3200 + 2016 (3.36*600) = 5216

Any remaining berries will be on truck, which means the trucks will have to wait for (12600-5216)*(15.24-10.03)/2/75 = 256. 5 truck hours

[15.24 equal to 3:24 pm]

Total number of trucks = 18.32 or 19 (256.5/14) trucks

So…from the above calculation, it can be shown that trucks have to wait to unload after 10:03 am for a total of 256.5 truck hours. The maximum number of trucks that will wait in a day will be 14.

4. If it costs \$20 per hour to rent a truck and driver, how much money is spent by truck waiting on a peak day? • Total number of truck hours to wait = 256.5 hours

• Cost per hour = \$20

• Total cost spent by truck waiting on a peak day = \$5130 (256.5*\$20)

5. Is the investment in a light meter system a good option? The investment in a light meter system is a good option because it will help in grading color, which is beneficial for the company, to increase its yield. The projected cost of this system is \$10,000 and a full-time qualified operator is also required for this system, whose pay grade is the same as the chief berry officer.

So the additional cost that would be generated by this system is only \$10,000 and that can be covered by the NCC in the coming year due to the increase in its yield. By using a light meter system that would accurately grade berries, they would save \$112,500 [(450000*0.5)/2] per season and can easily cover both the investment cost and employee cost. It will also help in grading of color in an efficient manner as compared to using color pictures that classified berries as Nos. 1, 2A, 2B and 3 (No 1 = poorest color and No. 3 = best color).

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