National Cranberry Cooperative Case

1665 WordsJul 8, 20097 Pages
EXECUTIVE SUMMARY 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…
This cost the company $168,750. We presume that this is also the cost incurred by the company every year. Since the cost of installation is $20,000 plus hiring of a full time skilled operator. Cost of operator = $6.50/hourx2000 hours per year=$13,000 per year Savings to the company excluding onetime cost of $20,000 = $155750 RECOMMENDATIONS 1. The company needs to purchase one additional dryer @ cost of 40,000 else it would have to spend $38880/ year in additional overtime. Considering the capital cost and the overtime spent ($16200), the additional expenditure can thus be recouped in less than two years. The last option of two dryers would lead to only marginal

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