Group 5_Section C_NCC

8/7/2019 Group 5_Section C_NCC

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NATIONAL

CRANBERRY

CORPORATION

Firdos PGP/14/142

Jovie PGP/14/145

Karthika PGP/14/148Nitish PGP/14/155

Punyata PGP/14/167

Shikha PGP/14/175


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The Cooperative}NCC, is an organization which processes and

markets cranberries

}

It is owned by the Cranberry growers} 99 percent of the sales are through the

Cooperative

}NCC one of the largest cooperatives

}

One of the largest cooperatives in NewEngland states and eastern states in USA


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Case Facts

} In 1968 there was surplus production of Cranberries,there was more production than utilization which ledto the growers resorting to Agricultural Marketing Actof 1937

}Under this act, growers can regulate and control thesize of an agricultural market if the federal govt. andmore than two-thirds of the growers by number agree

to restrict crop produce.

} In 1970, the growers resorted to AgriculturalMarketing Act of 1937 again.


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Case Facts Contd

} In dry harvesting, cranberries were hand picked

} Increased mechanization of cranberry processing

} Water harvesting - bogs were flooded & cranberries

were picked up from the surface of water

} Increase in yield up to 20%

} Water harvesting increased rapidly

} Water harvesting caused some damage and

shortened the time cranberries could be heldprior to use or storage


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Case Facts Contd} Percentage of water harvested berries is

expected to increase to 70% of total processedfruits this year [1971]

}

Last year water harvested berries constituted58% of crop size.

} In Sept-Oct 1970, the total berries deliveredwere 610,040 bbls.

}Maximum delivery in a day was 18,879 bbls

}Maximum wet berries delivered in a day were12,432 bbls


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Process Flow


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What measures should the NCCimplement to reduce truck waiting timeand overhead costs?

Decision Problem


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Analysis

} The Bottleneck is the slowest process

} Bottleneck for wet berries processing is the dryerwhich operates at 600 barrels/hour

} Berries start arriving at 7 AM and processing

starts at 11 AM} BBLS of wet berries/hour = (18,879*.7)/12 =

1100 BBLS/hour

} BBLS of wet berries that temporary bins cannot

handle at 11 AM = 4400 3200 = 1200 BBLSwaiting on truck


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Analysis contd

}Wet berries arrive at 1100 BBLS/hour andprocessing capacity is 600 BBLS/hour starting at 11AM

} By 7 PM 8400 BBLS of wet berries are pending to be

processed(3200 BBLS in bins and 5200 BBLS ontrucks)

} Trucks finish unloading at 3.40 AM .

} This causes high waiting time for trucks and overtime

employment for workers


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Recommended Solutions1. Start processing at 7 AM with 2 shift system (8

hours each)

At 7 PM there are (1100*12) (600*12) 3200 =2800 BBLS waiting on truck

Truck unloading finishes at 11.40 PM

Activity Cost for second shift

Receiving (6*6.5 + 9*4)*8 = 600

Destone, Dechaff and Drying (6.5*1)*8 = 52

Milling (10*6.5+ 5*4)*8 = 680

Shi ing (8*6.5+12*4) = 800


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Recommended Solutions Contd

} Total overtime cost = $9555

} Second Shift cost = $63960} Total cost / month = $73515

Activity Overtimehours

Costs incurred /day ($)

Receiving 1 (6*6.5 + 9*6) = 93

Destone, Dechaff

and Drying

1 (6.5*1) = 6.5

Milling 1 (10*6.5+ 5*6) = 95

Shipping 1 (8*6.5+12*6) = 124


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2. Install 2 new Dryers at ($40,000 each) Drying capacity increases to 200*5 =

1000BBLS/hour

At 7 PM there are 2000 BBLS waiting on trucks

which gets cleared by 8P

MA

ctivity Overtimehours Costs incurred /day ($)

Receiving 5 (6*6.5 + 9*6)*5 = 465

Destone, Dechaff

and Drying

1 (6.5*1*1) = 6.5

Milling 1 (10*6.5+ 5*6) *1 = 95

Shipping 1 (8*6.5+12*6)*1 = 124

One month overtime cost = $20715 + InitialInvestment of $80,000


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3. Convert Dry Berry holding to wet berry holding bins

Convert 13 Dry berry holding bins into Wet berryholding bins @ $7500 / bin = $97,500

At 7 PM, 1950 BBLS on trucks which will be clearedby 10.15 PM

Activity Overtimehours

Costs incurred /day ($)

Receiving 8 (6*6.5 + 9*6)*8 = 744

Destone, Dechaffand Drying

4 (6.5*1*4) = 26

Milling 4 (10*6.5+ 5*6) *4 = 380

Shipping 4 (8*6.5+12*6)*4 = 496

Total overtime cost = $49,380 Initial investment cost = $97,500


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Should a Light Meter System be

Installed?

} Total cost = $20000

}

Benefit/ Year = (450,000* .75*.5) = $168750}We recommend this system be installed


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Conclusion

}We recommend the installation of 2 dryers at

$80,000 with overtime cost of $20715/ month

during peak season

} Install the light meter system to reduce costsincurred by inaccurate grading of berries


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Thank you

Group 5_Section C_NCC

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