Operation Managememt

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ratioNational Cranberry Cooperative - A Case Study
Production and Operation Management Assignment

Submitted by: Kunal Verma (11BM60008) VGSOM

Vinod Gupta School of Management IIT Kharagpur

National Cranberry Cooperative

About this Document
Purpose The purpose of this document is to provide the solution to the National Cranberry Cooperative Case problem. Intended Audience This document will help: Students and instructors to provide the various details regarding the National Cranberry Cooperative Case for Production and Operations Management Assignment.

Vinod Gupta School of Management IIT Kharagpur

National Cranberry Cooperative

Introduction - Process Analysis
We start by making a process flow diagram for the flow of berries at RP1 from the moment berries arrive at the RP1 in trucks to the moment they leave in RP1 after being bag packed, bulk loaded into trucks or loaded into bulk tins.

Fig 1: Process Flow Diagram Vinod Gupta School of Management IIT Kharagpur National Cranberry Cooperative

Assumptions and Data:
The capacities of the various processes are based on the assumptions or data as shown below: Dumping Capacity Number of Kiwanee Dumpers = 5 Average time taken by truck to load the berries onto Kiwanee Dumpers = 7.5 minutes (Maximum being 10 and minimum being 5 minutes) Average weight of berries in a truck = 75 bbls. Dumping Capacity = 5 * 75 * 60 / 7.5 = 3000 bbls/hr. Holding Bin Capacities Bin No. 1-16 can hold dry berries only up to 250 bbls per bin. Total capacity of bin numbered 1-16 = 250*16 = 4000 bbls Bin No. 17-24 can hold dry/wet berries up to 250 bbls per bin Total capacity of bin numbered 17-24 = 250*8 = 2000 bbls. Bin No. 25-27 can hold wet berries up to 400 bbls per bin Total capacity of bin numbered 25-27 = 400*3 = 1200 bbls. De-stoning Capacity No. of de-stoning units = 3 Capacity of each unit = 1500 bbls/hr Total de-stoning capacity = 4500 bbls/hr

Vinod Gupta School of Management IIT Kharagpur

National Cranberry Cooperative

De-chaffing Capacity No. of de-chaffing units = 3 Capacity of each unit = 1500 bbls/hr Total de-chaffing capacity = 4500 bbls/hr Jumbo Separator and Bailey Mill Lines No. of separator units = 3 Average capacity of each unit = 400 bbls/hr Total separator capacity = 1200 bbls/hr Bagging Station Capacity Maximum output per day = 8000 Working hours = 12hrs. Capacity = 8000/12 = 667 bbls per day Bulk Bin Loading Capacity No. of loaders for bulk bin loading = 4 Capacity of each loader = 200 bbls/day Total bulk bin loading capacity = 4 * 200 = 800 bbls per day. Bulk Truck Loading Capacity No. of loaders of bulk trucks = 2 Capacity of each loader =1000 bbls/hr Total Capacity Bulk Truck loading Capacity = 2000 bbls/hr

Vinod Gupta School of Management IIT Kharagpur

National Cranberry Cooperative

Installing a Light Grading System
As given, out of a total of 4, 50,000 bbls of berries graded as top quality only half were top quality and deserved the 50 cent per bbl premium. The light grading system which would accurately grade the berries would save 4, 50,000*0.5/2 = $1,12,500 per season at one time investment of $10,000 and recurring cost of hiring a skilled operator at $10,000 (Assumed)...This would lead to a substantial saving. But another fact needs to be considered that this is a cooperative organization. Although installing a light grading system would lead to increase in the margins of the receiving plant 1 but would be loss for the cooperative as a whole as money instead of being paid to farmers would go to worker who is hired. But status quo can also not be maintained as it leads to wrong distribution of benefits to farmers with a lower quality crop. An alternate solution can to be stricter in the manual grading process and increasing the variety of shade cards so that berries can be rightly classified. One more category in between 2A and 3 can also made having a lesser premium than quality 3. But the various other implications of...
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