National Cranberry Cooperative

CASE STUDY ANALYSIS

Operations Management - OPMG – 601

PRESENTED BY:

MOHAMED MAHMOUD SALEH

NCC Case Study Analysis

Case Study Brief

NCC are facing several problems in the operation management of receiving plant no.1
(RP1), during the cranberry harvesting period. These problems can be concluded as
followed:

1- The water harvested berries shall increase this year to be 70% of the total
harvested quantity, instead of 58% last year. Accordingly, there is a need to convert
some of the storage bins from storing dry berries to wet berries.

2- The need of installing a light meter system for berries color grading to assure the
quality of separating and grading the berries according to their colors, as this
process causes overpaying from NCC to the farmers.

3- Reduce the idle time of the trucks and the overtime costs by rescheduling the
process shift time.

4- Analyzing the decision of adding two new dryers and its impact on the process.

The processes of the RP1 can be summarized as follows:

1- Receiving and testing.

2- Weighing, sampling and grading.

3- Dumping.

4- Temporary Holding.

5- De-stoning Capacity.

6- De-chaffing Capacity.

7- Drying.

8- Separation according to quality grading.

9- Bulking and Bagging.

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NCC Case Study Analysis

NCC Process Flow Diagram

Trucks arriving at
RP1 Dumping

- Average dumping time is

Trucks arriving at
The berries 7.5 minute per truck.
RP1. The average
weighed,
weight of barriers - No. of Dumper are 5
sampled and
on truck is 75 bbls
color graded - The total capacity of
per truck
dumpers = 5x75x60/7.5=3000
bbls/hr

Temporary
Holding

- Bins 1 to 16 process are for dry

1 - 16 berries

De-chaffing De-stoning - Total Capacity of these Bins =

250 x16 = 4000 bbls

- 3 De-chaffing units. - 3 De-stoning units. - Bins 17 to 24 process are for

17 - 24 both dry and wet berries
- The total De- - The total De-
chaffing capacity = stoning capacity = - Total Capacity of these Bins =
3x1500 = 4500 bbls 3x1500 = 4500 bbls 250 x8 = 2000 bbls

- Bins 25 to 27 process are for

25 -27 wet berries

- Total Capacity of these Bins =

Drying Separators 400 x3 = 1200 bbls

- 3 Drying units. - 3 lines.

- The total Drying - The total Drying

capacity = 3x200 = capacity = 3x400 =
600 bbls 1200 bbls

Shipping

Baiely Mill

Discarded Waste

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NCC Case Study Analysis

- The impact of converting some of the storage bins from storing dry to wet
berries, after increasing the water harvested berries to be 70% instead of 58%,
and how does this cost?.

Mainly the usage of the storage bins are to hold the berries between receiving,
de-stoning and de-chaffing.

Currently the total number of the holding bins is 27, classified as follows:

- 3 holding bins (from 24 to 27) are used for water harvested berries.

- 8 holding bins (from 17 to 24) are used for both dry and water harvested berries.

- 16 holding bins (from 16 to 24) are used for dry harvested berries.

Then, the total number of current water berries holding bins are 11 bins.

How many water harvested holding bins are required to absorb the increase in the
water berries increasing to be 70%?

Currently, 11 holding bins from total 27 bins can be used for water harvested
berries, that means that 41% (11/27x100) of the holding bins are used for the water
harvested berries.

The minimum required water harvested holding bins after increasing the water
harvested berries to 70% = 70/100x27 = 18.9, so the needed holding bins for water
harvested are 19.

The required no. of bins to be converted = 19 – 11 = 8 water harvested holding bins.

The total cost to convert the holding bins = 8x7,500$ = 60,000$.

However, this converting shall increase the buffer capacity, the RP1 will be able to
handle the delivered water harvested berries quantities and that will impact on
reducing the waiting time and reducing the receiving overtime.

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NCC Case Study Analysis

- The improvement expected after installing a berry light meter system for color
grading on NCC income.

NCC is currently paying extra 75 cent premium on about 450,000 bbls, however
half of this amount is really graded as no.3 grade.

The overpaid amount = 450,000x0.5 (half of the amount) x 0.75=168,750$

Installing a berry light meter system for color grading cost= 20,000$

Moreover, the cost of an additional skilled full time operator

= 1 (additional operator) x 12 hr. (assuming the max. working hours in the heavy
loaded days x 6.5S (average pay rate for employee per hour) x 30 days x12
months

= 48,080$ (average salary monthly rate for the additional employee, assuming
that the 12 working hrs per day is exaggerated for all the year to compensate
the overtime rate in the peak months).

Accordingly, the total cost in the first year = 20,000$ + 48,080$= 68,080$

Even in the first year, NCC will save = 168,750$-60,080$= 108,670$

Also, installing the light meter system will maintain the unfair distribution of
benefits on the farmers.

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NCC Case Study Analysis

- Reduce the idle time of the trucks and the overtime costs by rescheduling the
process shift time.

RP1 is currently starting the processing operation starting from 11:00am.

The shift duration for the workers is eight hour.

The inputs assumptions:

The below schedules is based on the input that the average arrival rate of berries
is estimated and calculated as follows:

- The average of the heavy load deliveries of process berries in 1980 = 18,000 bbls
(extracted from the case study – exhibit2)

- The arrival of berries is distributed over the 12 hours duration, so the average
of heavy load day arrived quantity of berries = 18,000/12hrs= 1,500 bbls/day.

- Assuming 70% water harvested berries are arrived = 1,500 bblsx0.7=1050

bbls/hr.

- So, the dry harvested amount per hour = 450 bbls/hr.

- Also, the three separators can handle = 3x400bbls = 1,200 bbls/hr.

- The total capacity of wet storage bins is 3,200 bbls

- The total capacity of dry storage bins is 4,000 bbls

- (These assumptions of total capacity shall be enhanced by converting 8 dry bins to

water harvested holding bins).

- The total capacity of dryers are 3x 200 bbls = 600 bbls.

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NCC Case Study Analysis

The current berry flow schedule during the day as the processing operation is
starting from 11:00am

Deliv. Amount Process Amount Stored Amount Backup Backup Total

Time Dry Wet Dry Wet Dry Wet Dry Wet Backup
7-8 450 1050 0 0 450 1050 0 0 0
8-9 450 1050 0 0 900 2100 0 0 0
9-10 450 1050 0 0 1350 3150 0 0 0
10-11 450 1050 0 0 1800 3200 0 1000 1000
11-12 450 1050 360 840 1890 3200 0 1210 1210
12-1 450 1050 360 840 1980 3200 0 1420 1420
1-2 450 1050 360 840 2070 3200 0 1630 1630
2-3 450 1050 360 840 2160 3200 0 1840 1840
3-4 450 1050 360 840 2250 3200 0 2050 2050
4-5 450 1050 360 840 2340 3200 0 2260 2260
5-6 450 1050 360 840 2430 3200 0 2470 2470
6-7 450 1050 360 840 2520 3200 0 2680 2680
7-8 0 0 360 840 2160 3200 0 1840 1840
8-9 0 0 360 840 1800 3200 0 1000 1000
9-10 0 0 360 840 1440 3200 0 160 160
10-11 0 0 360 840 1080 2520 0 0 0
11-12 0 0 360 840 720 1680 0 0 0
12-1 0 0 360 840 360 840 0 0 0
1-2 0 0 360 840 0 0 0 0 0
2-3 0 0 0 0 0 0 0 0 0
3-4 0 0 0 0 0 0 0 0 0
4-5 0 0 0 0 0 0 0 0 0
5-6 0 0 0 0 0 0 0 0 0
6-7 0 0 0 0 0 0 0 0 0
7-8 0 0 0 0 0 0 0 0 0
8-9 0 0 0 0 0 0 0 0 0
9-10 0 0 0 0 0 0 0 0 0
10-11 0 0 0 0 0 0 0 0 0

The proposed solution to reduce the idle time of the trucks is by rescheduling the
process shift time to start from 7:00am instead of 11:00am.

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NCC Case Study Analysis

Calculating the average truck idle hours, for the processing operation starting at 11am:

As the trucks start arriving at 7am, and holding the wet berries in the holding bins from
17 to 27. The total capacity of these holding bins =3x400+8x250 = 3,200bbls.

As indicated from the schedule, the trucks is starting to wait since 10am, after 3 hours
from RP1 receiving unit start operating.

Inventory rate = arrival rate – processing rate = 1,050bbls – 600bbls = 450bbls/hour.

Total inventory (backup) = inventory between 7 to 11 am + inventory after 11am

= 4hrs x 1,050 bbls + 8hrs x 450 = 7,800 bbls

After 12hrs, there will be a backup of 7,800 bbls left in the inventory. The holding bins
capacity can handle 3,200 bbls.

Accordingly, there will be quantity in the trucks waiting = 7,800 – 3,200 = 4,600bbls.

The hours needed to handle the 4600 bbls = 4600/600 (average processing rate) = 7.67
hours.

Finally, the truck will wait for 7.67 hours +9 hours = 16.67, so the last ruck will wait till
about 2:00am next day (the same can be noticed from the previous schedule).

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NCC Case Study Analysis

The berry flow schedule during the day as the processing operation is starting from
7:00am, using rescheduling the shift starting hour.

Deliv. Amount Process Amount Stored Amount Backup Backup Total

Time Dry Wet Dry Wet Dry Wet Dry Wet Backup
7-8 450 1050 360 840 90 210 0 0 0
8-9 450 1050 360 840 180 420 0 0 0
9-10 450 1050 360 840 270 630 0 0 0
10-11 450 1050 360 840 360 840 0 0 0
11-12 450 1050 360 840 450 1050 0 0 0
12-1 450 1050 360 840 540 1260 0 0 0
1-2 450 1050 360 840 630 1470 0 0 0
2-3 450 1050 360 840 720 1680 0 0 0
3-4 450 1050 360 840 810 1890 0 0 0
4-5 450 1050 360 840 900 2100 0 0 0
5-6 450 1050 360 840 990 2310 0 0 0
6-7 450 1050 360 840 1080 2520 0 0 0
7-8 0 0 360 840 720 1680 0 0 0
8-9 0 0 360 840 360 840 0 0 0
9-10 0 0 360 840 0 0 0 0 0
10-11 0 0 0 0 0 0 0 0 0
11-12 0 0 0 0 0 0 0 0 0
12-1 0 0 0 0 0 0 0 0 0
1-2 0 0 0 0 0 0 0 0 0
2-3 0 0 0 0 0 0 0 0 0
3-4 0 0 0 0 0 0 0 0 0
4-5 0 0 0 0 0 0 0 0 0
5-6 0 0 0 0 0 0 0 0 0
6-7 0 0 0 0 0 0 0 0 0

Calculating the average truck idle hours, for the processing operation starting at 7am:

Total inventory (backup) = 12hrs x 450 = 5,400 bbls

After 12hrs, there will be a backup of 5,400 bbls left in the inventory. The holding bins
capacity can handle 3,200 bbls.

Accordingly, there will be quantity in the trucks waiting = 5,400 – 3,200 = 2,200bbls.

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NCC Case Study Analysis

The hours needed to handle the 2,200 bbls = 2,200/600 (average processing rate) = 3.66
hours.

Finally, the last truck will wait for 3.66 hrs + 12 hrs = 15.67, so the last ruck will wait till
about 10:00pm same day (the same can be noticed from the previous schedule).

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