National Cranberry Cooperative (Abridged)

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Here’s the problem, gang…
We now that the bottleneck in the process is the Drying unit. Using the diagram, we can assess: 1. TPT is 19,000*.7 wet barrels/12 work hrs in work day = 1108 wet bbls per day 2. The dryer unit can process 600 bbls wet cranberries per day Looking at the process we know that there is a bottleneck at Drying unit: I. The capacity of the drying unit is 600 bbl /hr which is much lower than the required 1108 wet bbl/day we need. II. On an average day a total of 10,000 bbl is received out of which 7,000 bbl is wet. At an average processing rate of 600 bbl /hr it will take 11.67 hours to process. Assuming normal working day of 8 hours, there is an overtime of 3.67 hours for each member of the crew on each average working day. III. On a peak day a total of 19,000 bbl is received out of which 13,300 bbl is wet. At an average processing rate of 600 bbl /hr it will take 22.17 hours to process. Thus, there is an overtime of 14 hours. Lack of drying capacity is one of the major reasons for the increase in overtime cost.

Another reason is the increase in percentage of wet cranberries. * Waiting time for trucks: Inventory build up = arrival rate – processing rate = 1108 bbl – 600 bbl = 508 bbl at this rate the wet bins will be filled in 3500/508 = 6.89 hours. At the end of the day (12 hours) there will be 450*12=5400 bbl in inventory. Out of this 3,500 bbl will be in bins and rest 1,300 bbl will be in trucks. It will take 1,300/600=2.17 hours to empty the waiting trucks. Thus, inventory will start building from 6.89 hours to 14.17 hours. The average waiting time will be (14.17-6.89)/2=3.64 hours. On an average there will be 1300/75 = 17.33 trucks waiting. Thus, the total waiting time will be 17.33*3.64 = 63.08 hours.

Ways to reduce the overtime cost and waiting time:
Install more drying capacity: Add 1 more dryer:
Overtime for each member on average day: On an average day a total of 10,000 bbl is received out of which 7000...
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