National Cranberry Cooperative Case
The major trends of the cranberry industry and the problems facing RP#1
There are several major trends that we can observe in the cranberry industry for the period of 1945-1979 (See Table 1 in the Appendix).
First, there is a steady production increase in each of the five-year periods: from 615,000 barrels in 1945-1949 to 1,546,120 barrels 30 years later. The production growth was caused by the increasing mechanisation of cranberry industry. For example, water harvesting could result in a yield up to 20% higher than that obtained via dry harvesting. Hence, the average barrels per acre grew from 23.7 in 1945-1949 to 73.7 in 1975-1979.
Second, the production growth led to the excess of cranberries produced over those utilized: from 0% of excess in 1945-1949 to 13% in 1965-1969. However, over the period 1969-1979 the overproduction has decreased due to the Agriculture Marketing Agreement Act followed by the Cranberry Marketing Order of 1978. That order limited the production of volume of each grower, thus, making a significant impact on both production excess and the industry’s prices. Before the Cranberry Marketing Order of 1978 the average price level per barrel was volatile and was not reflected in the country’s inflation rate ($11.06 per barrel in 1945-1949 vs $12.00 per barrel in 1970-1974).
Third, because the water harvesting methodology was more damaging than the dry one there was a decrease in the proportion of fresh sales from 76% in 1945-1949 to 22% in 1975-1979. Berries should not be damagedto be sold fresh.
Receiving plant #1 (RP1) is facing operations management problems. First, overtime costs were out of control. Second, trucks spend too much time building up and waiting to be unloaded.
The flow rate of the system
Temporary Holding
Waste
Figure 2 The RP1 process flowchart
Bins for dry berries
Destoning 4,500 bbls/hr
Dechaffing 1,500 bbls/hr
Separators 1200 bbls/hr
Dechaffing 3,000 bbls/hr
Dryers 600 bbls/hr
Bins for wet
There are several major trends that we can observe in the cranberry industry for the period of 1945-1979 (See Table 1 in the Appendix).
First, there is a steady production increase in each of the five-year periods: from 615,000 barrels in 1945-1949 to 1,546,120 barrels 30 years later. The production growth was caused by the increasing mechanisation of cranberry industry. For example, water harvesting could result in a yield up to 20% higher than that obtained via dry harvesting. Hence, the average barrels per acre grew from 23.7 in 1945-1949 to 73.7 in 1975-1979.
Second, the production growth led to the excess of cranberries produced over those utilized: from 0% of excess in 1945-1949 to 13% in 1965-1969. However, over the period 1969-1979 the overproduction has decreased due to the Agriculture Marketing Agreement Act followed by the Cranberry Marketing Order of 1978. That order limited the production of volume of each grower, thus, making a significant impact on both production excess and the industry’s prices. Before the Cranberry Marketing Order of 1978 the average price level per barrel was volatile and was not reflected in the country’s inflation rate ($11.06 per barrel in 1945-1949 vs $12.00 per barrel in 1970-1974).
Third, because the water harvesting methodology was more damaging than the dry one there was a decrease in the proportion of fresh sales from 76% in 1945-1949 to 22% in 1975-1979. Berries should not be damagedto be sold fresh.
Receiving plant #1 (RP1) is facing operations management problems. First, overtime costs were out of control. Second, trucks spend too much time building up and waiting to be unloaded.
The flow rate of the system
Temporary Holding
Waste
Figure 2 The RP1 process flowchart
Bins for dry berries
Destoning 4,500 bbls/hr
Dechaffing 1,500 bbls/hr
Separators 1200 bbls/hr
Dechaffing 3,000 bbls/hr
Dryers 600 bbls/hr
Bins for wet