National Cranberry Cooperative Case

ANSWER 1:

Following are the problems faced by Receiving Plant No. 1 (RP1):

 Overtime costs were after control even after spending $200,000 for a fifth
Kiwanee dumper
 The waiting time for the unloading the process fruit into the receiving plant is
too long which is upsetting for the growers as the trucks and the drivers leased
spent most of the time standing idle, waiting to unload
 Inaccuracy of the colour grading process by the chief berry receiver. In 1995,
$1.50 per bbl premium paid for No. 3 (best) berries on about 450,000 bbls, but
later when they were used it was found that only half of them were No. 3,
others were mistakenly graded 2B
 There are not enough holding bins for wet berries

ANSWER 2:

Following are the sources of variability hat NCC is subjected to:

 Two kinds of cranberry harvesting – dry harvesting and water harvesting

 Percentage of unusable berries – poor, smaller and frosted berries
 Classification of usable berries into Nos – 1, 2A, 2B, or 3 (1 being the poorest
and 3 being the best)
 Different classes of quality grading – first quality berries, potential second
quality berries, and unacceptable berries.
ANSWER 3:

 Units are in barrels/hour

Dumping

3000

Holding

3200- Wet (assuming bins 17-24)

Bo
4000- Dry

Destoning (Dry) De-chaffing (Wet)

4500 3000

[BOTTLENECK]

De-chaffing (Dry) Drying (Wet)

1500 600

Separator

1200
 Capacity Calculation

Dumping
No. of Kiwanee 5
dumpers
Avg. weight of berries 75 bbls
Avg. time taken for (7+8)/2=7.5
dumping
Total capacity 5*75*7.5=3000

Holding
Capacity for bins 1- 16*250=4000
16(dry)
Capacity for bins 17-24 8*250=2000
(wet or dry)
Capacity for bins 24- 3*400=1200
27(wet)

Destoning
No. of units 3
Capacity per unit 1500bbls/hr
Total destoning capacity 1500*3=4500 bbls/hr

De-chaffing
No of units (wet) 2
No. of units (dry) 1
capacity per unit 1500 bbls/hr
Total destoning capacity 1500*(2+1) = 4500
bbls/hr

Drying
No. of units 3
Capacity per unit 200 bbls/hr
Total drying capacity 200*3=600 bbls/hr (Bottle
Neck)

Separator
No. of units 3
capacity per unit 400 bbls/hr
Total separator capacity 400*3=1200 bbls/hr

Bulking & Bagging

 Infinite Capacity (Data doesn’t specify any
limitation)

ANSWER 4:

Total wet berries coming in 12 18000*0.7=12600

hours
Total processing capacity in 12 600*12=7200 barrels/ hour
Impacted step Capacity
hours the flow rate will be updated 800 bbls/hr.
Total holding capacity of bins 3200 barrels
Total quantity of berries processed in 12 9600 bbls/hr
hours
Total berries waiting
Additional in truck
Inventory 5400-3200=2200 barrels
12600 – 9600 = 3000

Wait Time bbls

2200/600=3.6 hours
overall process time (4/800) + (12600/800) =
15.8 hrs

The trucks will be waiting after 7pm till 10.40pm to unload the berries.

ANSWER 5:

Owing to the above-mentioned problems and sources of variability in berry processing

method, following course of actions were contemplated by Hugo Schaeffer:

1. Addition of a dryer: From the capacity calculated at each step of the process,
drying wet berries is the bottleneck with the lowest capacity. If one extra dryer
is added:
 As holding capacity of the bins is 3200 bbls, the additional inventory will be
accommodated and the waiting time will be reduced.

2. Conversion of holding bins: The cost to convert each holding bin is

approximately $10000. Assuming that bins 1-16 are converted for from just dry
berries to dry as well as wet berries the cost will go up to $160000. As per the
current capacity of the plant, the additional 2200bbls of inventory requires 9
bins only and thus the cost will be $90000

3. Add a light meter system for colour grading: In 1995, a loss of $337500 due to
shortcomings in the grading process as it couldn’t differentiate the berries of
grade 2B and 3. A new light meter system will cost $40000, will reduce losses
in long term while an additional maintenance resource will be required at
minimal costs to operate the equipment.

ANSWER 6:

Units are in barrels/hour

Average flow of berries/day 18,000

Average flow/hour 1,500
Average capacity of berries/truck 75
Processing capacity/hour 600
Average wait time of trucks 3.6 hours
To get rid of the wait time we can ask the farmers to send the trucks in batches of 8
per hour.

8*75=600 barrels.

There won’t be any wait time for the trucks as the berries are unloaded as soon as the
trucks arrive at the plant.