University of Massachusetts, Lowell
Operations And Information System Department
Student name: Ha Thu Tran
Class: Operation Management 63.671.
Case Study: National Cranberry Cooperative
Date: Feb 19 2015
I. Background /Summary
National Cranberry case is an interesting operational case study. The organization of National Cranberry was established and owned by growers of cranberries to process and market their own berries. It is a large corporation, which has operation in all primary growing areas of North America: Massachusetts, New Jersey, Wisconsin, Oregon, Washington, Columbia and Nova Scotia. The company is about to take on challenges to improve efficiency of receiving plant 1, and to reduce unnecessary factors such as overtime cost, prolonged waiting time of unloading berries, which increase rental truck cost to growers. Even though, the company has invested $100,000 last winter to address above issues. The problem still persisted. Therefore, Mr. Hugo Schaefer directed his assistant to find out the solution by checking through the whole operation before this year crops come in which are estimated to be increased 70% than last year.
II. Problem Statement
1/ Prolonged waiting time truck for unloading the berries:
At first, the case was indicated that the waiting time was caused by the holding bins were full. Hence, the truck had to wait until those bins completely emptied the contents. Normally, it might take up to 3 hours. However, according to the process flow chart, primary reason held the unloading process is low drying capacity. It only could carry up to 200lbs/ hour per dryer. Below assumption will clarify the number of waiting trucks were caused by low drying capacity. If there are 16,000bbls of cranberries were delivered a day and dumper has the capacity of 700bbls/ hour.
Number of bins
Total capacity bbls. / hours
Dechaffing (dry berries)
Dechaffing (wet berries)
Therefore, capacity process of a day is: 16,200bbs / 8 hours = 2,025 bbls/hour. Since the percentage of water harvested berries would increase from 58% to 70%. Then the percentage of dry berries would accumulate for 30% and 70% of wet berries. Dry berries
30% x 2,025 bbls/hour =607.5bbls/hour
70% x 2,025 bbls/hour=1,417.5bbls/hour
After an hour, the wet holding bin would have remained 1,417.5-600= 717.5bbls/ hour and for 8 hours it would have 717.5x8=5,740bbls. If we assume the holding bins from 17 to 24 were used for only wet berries, we will have a total of wet cranberries holding is 3,200bbls.In a day there are (5,740bbls-3200bbls)= 2540 bbls of wet berries will be held in the trucks. The number of waiting trucks would be 2540bbls/ 75 = 33.86 trucks. The total waiting time would be 5.5 hours if the delivered amount were as same as above assumption.
2/ Uncontrolled over time cost:
According to figure D, most of over time working hours occurred during receiving process. It was caused by the capacity of drying which led to the holding bins would not able to continually replenish the new load of cranberries. This figure would vary with the amount of per day delivered amount of cranberries. Hence, it would not be able to control unless the working process needs to be improved.
The option was provided in the case is to buy and install two new dryer, which cost $40,000 per dryer, and to covert the dry holding bins into a mixed of holding bins, which...
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