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Cranberry Case Operation Study Essay

1667 words - 7 pages

OPNS D30 Operations Management
National Cranberry Cooperative

1. Process flow diagram and bottleneck operations
For the process flow diagram, see Exhibit 1. The bottleneck operation is Drying (rate: 600 bbls/hr).
Let’s consider the wet and dry processing separately:
* Wet processing: RP1 can dechaff up to 3,000 bbls/hr, but only dry 600 bbls/hr. Thus, the bottleneck operation of wet processing is drying, and the bottleneck rate is 600 bbls/hr.
* Dry processing: RP1 can destone 4,500 bbls/hr, but only dechaff 1,500 bbls/hr. The bottleneck operation is dechaffing, and the bottleneck rate is 1,500 bbls/hr.
So taking wet and dry processing together, the maximum capacity of ...view middle of the document...

2. Trucks queue and overtime
a) Two main reasons explain why trucks have to wait. First of all, the trucks start unloading 4 hours before the plant starts processing (7AM vs 11AM); because of that, berries accumulate very fast in the holding bins, especially in the wet holding bins. On a busy day, the latter can get full even before RP1 starts processing, which already forces trucks to wait (see Exhibit 2). Moreover, the bottleneck rate is 600 bbls/hr (drying; see Exhibit 1), while the unloading rate of the wet berries is up to 2100 bbls/hr. This causes the wet berries in holding bins to fill up faster than the dryer can process. As a result, the trucks have to wait up to 3 hours before they can empty their wet berries.
Note: unloading normally takes 5 to 10 minutes, i.e. 7.5 minutes on average; the average truck load is 75 bbls, and 5 trucks can be unloaded simultaneously on the 5 Kiwanee dumpers. So the maximum unloading rate (if trucks were coming in constantly) is 60/7.5 x 75 x 5 = 3,000 bbls/hr. Because the percentage of wet berries is 70%, wet berries can be unloaded at a maximum rate of 2,100 bbls/hr.
b) Overtime is necessary because, as explained in Q1, wet berries should preferably not be held overnight and the bottleneck rate is too low to enable RP1 to process all the berries within the regular hours. This forces the workers to finish processing during the night.

3. Inventory build-up
See Exhibit 2. There is no inventory build-up for dry berries. Actually, dry berries never need more than 45% of the dry berries holding bins capacity (between 10am and 11am).
On the other hand, wet berries delivery (1,050 bbls/hr) tops up holding capacity (3,200 bbls) before processing even starts. Trucks start waiting after 3,200/1,050 = 3.0476 hours i.e. at 10:03 am.
Trucks stop waiting 400 / 600 = 0.6667 hours after 2 am, i.e. at 2:40 am.
That is, there is a waiting line during 16 hours and 37 minutes.
The holding bins are empty at 8am the next morning.
The operating time is 25 hours, which is impossible because of the 2 hours required for cleaning and maintenance. Moreover, the plant would already have started receiving the next day berries, and would again start building up inventories. The plant would have to shut down at 5am and set aside 1,800 bbls.
4. Start processing earlier
See Exhibit 3. If RP1 starts processing at 7am:
* Inventory would increase much slower.
* Trucks would start waiting later (at 2:07pm) and the waiting line would end up earlier (at 10:40pm). The waiting line would thus last 8 hours and 33 minutes, which is a lot less than in the previous case.
* RP1 would be able to empty the holding bins at 4am the next morning.
Moreover, the dry holding bins would be used as transit only and would not build-up inventory, which could allow for cost reduction.
Comparing the overtime tables of Exhibits 2 and 3 also shows that starting processing at 7 am would enable RP1 to save costs on...

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