National Cranberry Cooperative CASE STUD PDF

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National Cranberry Cooperative CASE STUDY ANALYSIS Operations Management - OPMG – 601

PRESENT MOHAM

NCC Case Study Analysis

Case Study Brief NCC are facing several problems in the operation management of receiving plant no.1 (RP1), during the cranberry harvesting period. These problems can be concluded as followed: 1- The water harvested berries shall increase this year to be 70% of the total harvested quantity, instead of 58% last year. Accordingly, there is a need to convert some of the storage bins from storing dry berries to wet berries. 2- The need of installing a light meter system for berries color grading to assure the quality of separating and grading the berries according to their colors, as this process causes overpaying from NCC to the farmers. 3- Reduce the idle time of the trucks and the overtime costs by rescheduling the process shift time. 4- Analyzing the decision of adding two new dryers and its impact on the process.

The processes of the RP1 can be summarized as follows: 1- Receiving and testing. 2- Weighing, sampling and grading. 3- Dumping. 4- Temporary Holding. 5- De-stoning Capacity. 6- De-chaffing Capacity. 7- Drying. 8- Separation according to quality grading. 9- Bulking and Bagging.

Page 1of 9

NCC Case Study Analysis

NCC Process Flow Diagram Trucks arriving at RP1

Trucks arriving at RP1. The average weight of barriers on truck is 75 bbls per truck

Dumping

- Average dumping time is 7.5 minute per truck.

The berries weighed, sampled and color graded

- No. of Dumper are 5 - The total capacity of dumpers = 5x75x60/7.5=3000 bbls/hr Temporary Holding -

Bins 1 to 16 process are for dry berries

1 - 16 De-chaffing

De-stoning

-

Total Capacity of these Bins = 250 x16 = 4000 bbls

- 3 De-chaffing units.

- 3 De-stoning units.

-

- The total Dechaffing capacity = 3x1500 = 4500 bbls

Bins 17 to 24 process are for both dry and wet berries

- The total Destoning capacity = 3x1500 = 4500 bbls

-

Total Capacity of these Bins = 250 x8 = 2000 bbls

17 - 24

-

Bins 25 to 27 process are for wet berries

-

Total Capacity of these Bins = 400 x3 = 1200 bbls

25 -27 Drying

Separators

- 3 Drying units.

- 3 lines.

- The total Drying capacity = 3x200 = 600 bbls

- The total Drying capacity = 3x400 = 1200 bbls

Shipping

Baiely Mill

Discarded Waste Page 2of 9

NCC Case Study Analysis

- The impact of converting some of the storage bins from storing dry to wet berries, after increasing the water harvested berries to be 70% instead of 58%, and how does this cost?. Mainly the usage of the storage bins are to hold the berries between receiving, de-stoning and de-chaffing. Currently the total number of the holding bins is 27, classified as follows: - 3 holding bins (from 24 to 27) are used for water harvested berries. - 8 holding bins (from 17 to 24) are used for both dry and water harvested berries. - 16 holding bins (from 16 to 24) are used for dry harvested berries. Then, the total number of current water berries holding bins are 11 bins. How many water harvested holding bins are required to absorb the increase in the water berries increasing to be 70%? Currently, 11 holding bins from total 27 bins can be used for water harvested berries, that means that 41% (11/27x100) of the holding bins are used for the water harvested berries. The minimum required water harvested holding bins after increasing the water harvested berries to 70% = 70/100x27 = 18.9, so the needed holding bins for water harvested are 19. The required no. of bins to be converted = 19 – 11 = 8 water harvested holding bins. The total cost to convert the holding bins = 8x7,500$ = 60,000$. However, this converting shall increase the buffer capacity, the RP1 will be able to handle the delivered water harvested berries quantities and that will impact on reducing the waiting time and reducing the receiving overtime.

Page 3of 9

NCC Case Study Analysis

- The improvement expected after installing a berry light meter system for color grading on NCC income. NCC is currently paying extra 75 cent premium on about 450,000 bbls, however half of this amount is really graded as no.3 grade. The overpaid amount = 450,000x0.5 (half of the amount) x 0.75=168,750$ Installing a berry light meter system for color grading cost= 20,000$ Moreover, the cost of an additional skilled full time operator = 1 (additional operator) x 12 hr. (assuming the max. working hours in the heavy loaded days x 6.5S (average pay rate for employee per hour) x 30 days x12 months = 48,080$ (average salary monthly rate for the additional employee, assuming that the 12 working hrs per day is exaggerated for all the year to compensate the overtime rate in the peak months). Accordingly, the total cost in the first year = 20,000$ + 48,080$= 68,080$ Even in the first year, NCC will save = 168,750$-60,080$= 108,670$ Also, installing the light meter system will maintain the unfair distribution of benefits on the farmers.

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NCC Case Study Analysis

- Reduce the idle time of the trucks and the overtime costs by rescheduling the process shift time. RP1 is currently starting the processing operation starting from 11:00am. The shift duration for the workers is eight hour. The inputs assumptions: The below schedules is based on the input that the average arrival rate of berries is estimated and calculated as follows: - The average of the heavy load deliveries of process berries in 1980 = 18,000 bbls (extracted from the case study – exhibit2) - The arrival of berries is distributed over the 12 hours duration, so the average of heavy load day arrived quantity of berries = 18,000/12hrs= 1,500 bbls/day. - Assuming 70% water harvested berries are arrived = 1,500 bblsx0.7=1050 bbls/hr. - So, the dry harvested amount per hour = 450 bbls/hr. - Also, the three separators can handle = 3x400bbls = 1,200 bbls/hr. - The total capacity of wet storage bins is 3,200 bbls - The total capacity of dry storage bins is 4,000 bbls - (These assumptions of total capacity shall be enhanced by converting 8 dry bins to water harvested holding bins). - The total capacity of dryers are 3x 200 bbls = 600 bbls.

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NCC Case Study Analysis

The current berry flow schedule during the day as the processing operation is starting from 11:00am

Deliv.

Amount

Process

Amount

Stored

Amount

Backup

Backup

Total

Time

Dry

Wet

Dry

Wet

Dry

Wet

Dry

Wet

Backup

7-8

450

1050

0

0

450

1050

0

0

0

8-9

450

1050

0

0

900

2100

0

0

0

9-10

450

1050

0

0

1350

3150

0

0

0

10-11

450

1050

0

0

1800

3200

0

1000

1000

11-12

450

1050

360

840

1890

3200

0

1210

1210

12-1

450

1050

360

840

1980

3200

0

1420

1420

1-2

450

1050

360

840

2070

3200

0

1630

1630

2-3

450

1050

360

840

2160

3200

0

1840

1840

3-4

450

1050

360

840

2250

3200

0

2050

2050

4-5

450

1050

360

840

2340

3200

0

2260

2260

5-6

450

1050

360

840

2430

3200

0

2470

2470

6-7

450

1050

360

840

2520

3200

0

2680

2680

7-8

0

0

360

840

2160

3200

0

1840

1840

8-9

0

0

360

840

1800

3200

0

1000

1000

9-10

0

0

360

840

1440

3200

0

160

160

10-11

0

0

360

840

1080

2520

0

0

0

11-12

0

0

360

840

720

1680

0

0

0

12-1

0

0

360

840

360

840

0

0

0

1-2

0

0

360

840

0

0

0

0

0

2-3

0

0

0

0

0

0

0

0

0

3-4

0

0

0

0

0

0

0

0

0

4-5

0

0

0

0

0

0

0

0

0

5-6

0

0

0

0

0

0

0

0

0

6-7

0

0

0

0

0

0

0

0

0

7-8

0

0

0

0

0

0

0

0

0

8-9

0

0

0

0

0

0

0

0

0

9-10

0

0

0

0

0

0

0

0

0

10-11

0

0

0

0

0

0

0

0

0

The proposed solution to reduce the idle time of the trucks is by rescheduling the process shift time to start from 7:00am instead of 11:00am.

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NCC Case Study Analysis

Calculating the average truck idle hours, for the processing operation starting at 11am: As the trucks start arriving at 7am, and holding the wet berries in the holding bins from 17 to 27. The total capacity of these holding bins =3x400+8x250 = 3,200bbls. As indicated from the schedule, the trucks is starting to wait since 10am, after 3 hours from RP1 receiving unit start operating. Inventory rate = arrival rate – processing rate = 1,050bbls – 600bbls = 450bbls/hour. Total inventory (backup) = inventory between 7 to 11 am + inventory after 11am = 4hrs x 1,050 bbls + 8hrs x 450 = 7,800 bbls After 12hrs, there will be a backup of 7,800 bbls left in the inventory. The holding bins capacity can handle 3,200 bbls. Accordingly, there will be quantity in the trucks waiting = 7,800 – 3,200 = 4,600bbls. The hours needed to handle the 4600 bbls = 4600/600 (average processing rate) = 7.67 hours. Finally, the truck will wait for 7.67 hours +9 hours = 16.67, so the last ruck will wait till about 2:00am next day (the same can be noticed from the previous schedule).

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NCC Case Study Analysis

The berry flow schedule during the day as the processing operation is starting from 7:00am, using rescheduling the shift starting hour.

Time

Deliv.

Amount

Process

Amount

Stored

Amount

Backup

Backup

Total

Dry

Wet

Dry

Wet

Dry

Wet

Dry

Wet

Backup

7-8

450

1050

360

840

90

210

0

0

0

8-9

450

1050

360

840

180

420

0

0

0

99-10 10

450

1050

360

840

270

630

0

0

0

10-11

450

1050

360

840

360

840

0

0

0

11-12

450

1050

360

840

450

1050

0

0

0

12 12-1 -1

450

1050

360

840

540

1260

0

0

0

1-2

450

1050

360

840

630

1470

0

0

0

2-3

450

1050

360

840

720

1680

0

0

0

3-4

450

1050

360

840

810

1890

0

0

0

4-5

450

1050

360

840

900

2100

0

0

0

5-6

450

1050

360

840

990

2310

0

0

0

6-7

450

1050

360

840

1080

2520

0

0

0

7-8

0

0

360

840

720

1680

0

0

0

8-9

0

0

360

840

360

840

0

0

0

99-10 10

0

0

360

840

0

0

0

0

0

10-11

0

0

0

0

0

0

0

0

0

11-12

0

0

0

0

0

0

0

0

0

12 12-1 -1

0

0

0

0

0

0

0

0

0

1-2

0

0

0

0

0

0

0

0

0

2-3

0

0

0

0

0

0

0

0

0

3-4

0

0

0

0

0

0

0

0

0

4-5

0

0

0

0

0

0

0

0

0

5-6

0

0

0

0

0

0

0

0

0

6-7

0

0

0

0

0

0

0

0

0

Calculating the average truck idle hours, for the processing operation starting at 7am: Total inventory (backup) = 12hrs x 450 = 5,400 bbls After 12hrs, there will be a backup of 5,400 bbls left in the inventory. The holding bins capacity can handle 3,200 bbls. Accordingly, there will be quantity in the trucks waiting = 5,400 – 3,200 = 2,200bbls.

Page 8of 9

NCC Case Study Analysis

The hours needed to handle the 2,200 bbls = 2,200/600 (average processing rate) = 3.66 hours. Finally, the last truck will wait for 3.66 hrs + 12 hrs = 15.67, so the last ruck will wait till about 10:00pm same day (the same can be noticed from the previous schedule).

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