National Cranberry Cooperative Case
In the current scenario, the major bottlenecks in the system are the drying units for wet berries and the berry separation lines. While the drying units’ capacity can be increased by purchasing additional units, the throughput of the system will still be limited by the limitation of the separation lines. If the average rate of inflow of berries is 1500bbl/hr, then with the effective separation capacity of 1200bbl/hr, the plant will incur a backlog of 300bbl/hr.
If the shift start times stay as it is, and the processing divisions start four hours after the receiving division, the truckers toward the end of the day will have to wait, since the cumulative backlog caused by processing will exhaust the bin storage capacity. …show more content…
Option II: One dryer is purchased and overtimes are added:
Considering that the separator capacity is 1200 bbl/hour, we can at present add only one dryer line which will enhance the drying capacity to 800 bbl / hr.
Let us consider a scenario where wet is processed at 800bbl/hr and dry at 400 per hour Total received per day (12 hrs) Accumulation till 7.00 pm if processing starts at 11.00 am Accumulation till 7.00 pm if processing starts at 8.00 am Processing in a day (12 hrs) Additional hours reqd # Additional overtime cost* per peak season (09/20 – 10/9) wet 12x1050=12600 4200+8*350=7000 1050+8*250=3050 800x12= 9600 3.75 $ 810*20 days= $ 16200 dry 12x450=5400 1800+8*50=2200 450+8*50= 650 400x12= 4800 0.00
# (shortfall in processing capacity/processing speed) (12600-7200)/600= 9 hours
* staff need to be hired in shipping(15 workers for one additional hour), deschaffing (one worker), milling(15) and shipping units (20)
** overtime charges @ USD 6.00 per worker per hour
Thus dry berries are processed in full while there is considerable backlog in wet berries which will necessitate 3.75 hours of overtime. If we continue to start the processing shift at 11 am we wouldn’t be able to avoid truckers’ queues because of shortage in bin capacity. However, we start the shift at 8.00 am, this can be avoided to a large extent
Option III: No dryers are purchased and overtimes are added:
Let us consider another scenario in which wet is