Anlayzing National Cranberry Cooperative

National Cranberry Cooperative Analyze and calculate as many costs as you can There are a number of costs that can be calculated and evaluated in the case study. Overtime costs There is a high percentage of overtime hours. This can be calculated as follows: 12,000 / 34,000 x 100% = 35.3% of the total hours For instance, in 1980, there are 12,000 overtime hours.

The estimated costs are as follows: The maximum cost incurred is $9.75 x 12,000 = $117,000 for the full year employees The minimum cost incurred is $6 x 12,000 = $72,000 for the seasonal personnel Premium costs for the grading system The grading system encompasses numbers 1, 2A, 2B and 3. There is an unnecessary $0.75 premium costs for number 3. For this number, there are 450,000 barrels but 50% was only for that quality: Therefore, the costs: (450,000 x 0.75) x 50% = $168,750 (Harvard Business School, 2011).

Identify the bottlenecks and why they exist (based purely on numbers) National Cranberry Cooperatives needs to find a method to improve efficiencies in the production of cranberries during the peaks in production. Devoid of this, a bottleneck will take place and bring about delays and increased overtime expenses. With regard to the case study, bottlenecks take place when trucks are waiting to unload, dryers for wet cranberries and also bin space for wet cranberries.

All through the peak season from September to December, quantities of cranberries received are much greater than in the off-season, causing difficulties and problems to the RP1 operational system. Trucks' wait- time for unloading process fruit is significantly lengthy and extensive. In addition, the cost of labor is also high and absence is high. An additional problem is with the categorization of the color of the berries; the system of identification and segregation is inaccurate and flawed generating sunk costs (Harvard Business School, 2011). This is based on the following numbers. 1.

Wet holding bins (17-27) are full: The capacity is 3,200 barrels (bbls) per hours and thereafter backs up into Kiwanee dumpers An example is from the year 1980 where the bins fill to capacity upon receiving 3,200 barrels whereas the dumpers become full at 3,000 barrels. 2.

The waiting time for trucks The arrival rate for wet berries is: (19,000 / 11) x 70% = 1,209 bbls per hour The process rate for the wet berries (on the drying unit) is 600 bbl per hour Therefore, there is an excess inventory of = 1,209 bbls -- 600 bbls = 609 bbls The wet bins, which are 25 -27 have a capacity of 1,200 (400 bbl per bin) The wet or dry berry bins, which are 17 -24 have a capacity of 2,000 (250 bbls per bin) Therefore, the wet berry bins will be filled after a period (explained as follows): = (2,000 + 1,200) / 609 = 3,200 / 609 = 5.25 hours = 7 pm + 5 hrs 15 minutes = 12:15 P.M 3.

Full dryers for wet cranberries The current capacity is 600 bbls per hour. However, the estimated flow is over 900 bbls per hour. Therefore, the bottleneck can be perceived in the dryer capacity, which is 600 barrels per hour The wet berries are 70%, which is equal to 70% x 19,000 = 13,300 barrels Therefore, in one day, the number of hours required is = 13,300 / 600 = 22 hours 4. Inadequate temporary holding capacity The wet bin holding capacity is 3,200 barrels However, the maximum inventory is 4,488 barrels 5. Inefficiency in the processing start time The trucks arrive at 7 am to load the cranberries.

However, the processing time only begins at 11 am (Harvard Business School, 2011). How will you expand production? What are the best ways to do it? What are the most cost effective ways of doing so? There are a number of ways to expand production, which include changing processing times, altering the arrival periods and the conversion of wet bins into dry bins. The following are the recommended best and effective ways: 1. Beginning the processing at an earlier period.

In particular, the most effective way would be to change the dechaffing process to start at 7 am rather than the prevailing time of 11 am 2. The second effective way of expanding is scheduling the truck arrival times into four-hour shifts. For instance, in the 1980 season, there was a total of 610,185 barrels. The normal deliveries made by every track ranges from 20 to 400 barrels with the average number being 75 barrels.

Therefore, this implies that the truckloads for every season is calculated as follows: 610,185 / 75 = 8,136 In addition, it takes about 5 to 10 minutes to dump the berries onto the Kiwanee dumper taking an average period of 7.5 minutes. Therefore, for the 8-hour period it can take 64 trucks for every dumper each days as calculated below: (8 x 60) / 7.5 = 64 Having five dumpers, it implies that it can take 320.