Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
9Activity
0 of .
Results for:
No results containing your search query
P. 1
National Cranberry case

National Cranberry case

Ratings: (0)|Views: 2,364|Likes:
Caso Harvard
Caso Harvard

More info:

Published by: Ricardo David Pareja Baquerizo on Jun 23, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

10/02/2013

pdf

text

original

 
CaseAnalysis:AnalysesoftheNationalCranberryCooperative-1.TacticalOptions
EVAN
L.
PORTEUS
GraduateSchoolofBusinessStanfordUniversityStanford,California94305-5015
I
r
Ct::::::
*_:_
R}J.
L
P\
+
(1
x
}J
w
&
?
t
}J
n
r""
P
--i
"'c,..
>
.}J
A,
<
e-,....
A
II
A
+.
I
%
1r
'+'
Ct_
a
t
x'"
w
+
"!
I+X.".f)11~X::::::
+
oX
$
!
>.,r%
L
r-°n'
":_q,A
t
_~}J7",
?
P5:
WeinitiatedthissectionintheNovember-December1989issueofInterfaceswiththepublica-tionoftheNationalCranberryCaseandaninvitationtosubmitanalysesbyMay1,1990.Wepromisedto"reviewthereports,selectandeditthebestsectionsfromthem,prepareacom-mentary,andpublishtheresults,"Inthisfirstpartofthoseresults,Idiscussresultsthatcon-sidertheenvironmentfixedandfocusonthetacticaloptionsavailable.Iincludeeditedanaly-sesofthesubmissionsfromKhashoggi,Chabas,andBakken[19901Juergens,Hoyt,andSwenson[19901andLangelo[1990).Inthesecondpart,Iwillexpandtheanalysistoconsiderchangesintheenvironmentandimplementationissues,andIwillincludeeditedanalysesofthreeadditionalsubmissions.
I
February1971,consideredthepresentforpurposesofthisanalysis,HugoSchaeffer,vice-presidentofoperationsattheNationalCranberryCooperative(NCC),facestwoprimaryproblemsthatariseatreceivingplantNo.1(RP1)duringtheannualautumncranberryharvestingseason:(1)trucksanddriversspendtoomuchtimewaitingtounloadprocessfruitatthereceivingplant,and(2)overtimecostsandabsenteeismareoutofcontrol.Thereisalsoasecondaryproblem:halfoftheberriesgradedastopqualityandawardeda50-centpremiumperbarrel(bbl)arenottopqualityanddonotde-servethepremium.TheManagementScience/OperationsResearch(MS/OR)approachtoproblemsolvingistoseekmorethanonecause,toseekalternativewaystoalleviatetheprob-lems,andtoseeknumericalmeasurestoevaluatethealternatives.
It
alsoempha-sizeslookingatthebigpicture.Forexam-ple,onepossiblecauseofthebuildup,es-peciallyasthetruckdriversandthoseinthereceivingareaseeit,isthelimitednumberofKiwaneedumpers.Solastyear,thecooperativepurchasedafifthKiwanee
Copynghr
@
1993.
TheInstitute
of
Management
Sciences0091-2102/93/2304/0021$0125
Thispaperwasrefereed
INDUSTRJES-AGRICULTURE/FooD
QUEU,ES-APPLICATIONS
INTERFACES23:4July-August1993(pp.21-39)
Copyright
©
2001AllRightsReserved
 
PORTEUS
dumperfor$75,000.Buttheanalysesinthisarticlerevealthat,unlesstherewereotherreasonsforbuyingtheadditionaldumper,themoneycouldhavebeenspentmorewiselyonotherthings.MSjORproblemsolving20to40yearsagoemphasizedsystems:Besureyouun-derstandhowthewholesystemworksandhoweachlittlepieceaffectseverythingelsebeforeyourunoutandbuyanotherdum-per.However,wehaveoftenmadethedif-ferentmistakeoftryingtobuildonebestmodelofthesystem;anythingthatmightberelevantisincludedinthemodel.Suchanapproachleadstolargecomplicatedmodelsthateventheanalystsmaynotfullyunderstand.Successfulmanagersdonotbasetheirdecisionsonanalysestheydonotunderstand[Little1970;Woolsey1978].Ourchallenge,therefore,istobe-comemastersofmodelbuildingandanal-ysis.Wemustbuildthesimplestmodelsthatencompasstheimportantpartsofthebigpicture.Therearenosetrules.Wemustpractice.Wemayevenneedalittlesomethingthatcan'tbetaught.Butwemustkeepitsimple,sothatweobtainus-ableinsightsandconclusions.Inthisarti-cleanditssequel,Itrytoillustratetheartofmodelbuildingandanalysis.Inparticu-lar,Iemphasizeexaminingavarietyofmodels,takingvariousperspectivesintoaccount,anddrawingdifferentinsights,ratherthanpresentingcompleteanalysesorillustratinganefficientwaytoreachmanagerialconclusionspertinenttothecaseathand.Ialsotrytodescribetheser-endipitythatfrequentlyaccompaniesagoodanalysis.Understandinghowsome-thingworksandwhatiscriticaloftenleadstonew,creativeideas.Ipresentanumber
INTERFACES23:4
ofprobablyunworkableoptionstoempha-sizethisimportantandunderappreciatedaspectofgoodanalysis.Analysis1:SystemwideOptimizationNCCisacooperative,whichmeansthatanysurplus(orloss)getsreturnedto(orabsorbedby)thegrowersthemselves.Thus,anyanalysisshouldaccountfortheconsequencestothegrowersaswellasthosetoRP1.Forexample,truckwaitingcostsandgrowernetrevenuesshouldbetakenintoaccountwhenevertheyareaf-fected.
If
themanagersofthecooperativearereluctanttothinkinthisway,thenthegrowersshouldinsiston
it.
Forexample,
if
themanagersareevaluatedonlyontheperformanceofthecooperativeandnotongrowerreturns,thentheirperformanceevaluationsystemshouldberevised.Thisideaisnotreservedforcooperatives.Thereisnolawagainstanorganizationcooperat-ingwithitssuppliersandcustomerstofindwaysofoperatingthatyieldthelargestto-talgainandsharingthatgainsoallpartiesarebetteroff.Thechiefberryreceivergradestruck-loadsofberriesonarrivalatRP1,usingcolorpicturesasaguide,intogrades1(poorest),2A,
2B,
or3(best).Whenindoubtbetweengrades2Bor3,heusuallyselectsgrade3.The50-centpremiumforgrade3berrieswaspaidonabout450,000barrelsofberriesin1970,yetonlyabouthalfofthemdeservedthatpremium,amountingtoover$100,000inundeservedpremiumpayments.Schaefferisthinkingofinstallingalightmetersystemcosting$10,000andrequiringanotherskilledop-eratortoeliminatethisproblem.Afirstanalysismayindicatethatsuchasystemshouldbeinstalled,assomuchcanbe
22
~········--·-'--.w~·~·opyrlgf'i'r©'·2001"Afl
Rlgl'rrs"R~S'"erwm""'''''''''''~''''''''''''''''''-~-'-
 
CASEANALYSIS
saved.However,accountingfortheconse-quencestothegrowerscanleadtoadiffer-entconclusion.
If
thegrowersshareinthesurplusofRPIinproportiontothetotalvolumetheydeliverandtheyeachreceivetheundeservedpremiumonthesameper-centageofberriestheydeliver,thenthecurrentsystemmerelypaysoutcoopera-tivereturnstothegrowersearly.
If
alltheberriesweregradedcorrectly,thecoopera-tivewouldshowasurplusthatislargerbytheamountoftheundeservedpremiumpayments,whichwouldthenbedistrib-utedbackinexactlythesameamountstothegrowers.Thegrowerswouldlosetheuseofthosefundsuntiltheyreceivedthemlater.Addingthelightmetersystemandanadditionalskilledoperatorwouldreducethesurplusandthenetstothegrowers.TheproblemisexacerbatedifthegrowersaretaxedatahighereffectivemarginaltaxrateonfundstheyreceiveoutofRP1surplusthanonfundstheyreceivedirectly.Underthecurrentsystem,someotherbuyerofberrieswhogradesberriescor-rectlymaybeabletoofferahigherpre-miumthanRPIfortop-qualityberries.Growersabletoidentifytheirtop-qualityberriesmaydivertthemtothisotherbuyertoobtainthehigherpremium.RPIwouldthenreceivefewertop-qualityberries.
It
isunclearwhethersuchgrowerswouldben-efitfromthediversion,asfeweroftheirundeservingberrieswouldreceivethepre-miumfromRPl.Possiblytheremaininggrowerswouldbenefit:Reducingthevol-umeofberriesflowingthroughtheplantwouldreducecongestionatRPIandmightimproveperformance.
If
RPIanticipatedamajorreductioninvolume,itmightbe
July-August1993
abletocancelorpostponeitsplannedex-pansion.Currently,growersmaynotreceivetheundeservedpremiumsequitably.Forin-stance,growerswhousewetharvesting(floodingthebogs,mechanicallyshakingthebushes,andcollectingthefloatingber-ries)maygetdisproportionatelymoreoftheundeservedpremiumsthangrowerswhousedryharvesting(thetraditionalmethodofhandpickingthebushes),be-causewetharvestingisapttobelessselec-tiveingettingonlythetop-qualityberries.Anygrowerswhodonotrealizethatthechiefberryreceiverisgradingtheberriestoogenerouslymightbeinappropriatelyencouragedtoharvestberrieseitherbeforeorafterthetimetheyareattopripenessquality,toavoidpeakcongestionperiodsatRPl.Theycouldbelievethattheirber-rieswouldcontinuetobegradedasNo.3berriesyetfewergrade3berrieswouldbedelivered,perhapsleadingtolowertotalreturns.Irecommendthateachtruck'sberriesbegradedaccordingtothepercentagethatare
------------
--__
..
_
..
_--
Thereisno
law
againstanorganizationcooperatingwithitssuppliersandcustomers.
ofeachcolorgrade,ratherthanratingthewholetruckloadasonecolorgradeoran-other.Ifthatisinfeasible,
it
maybeworthintroducinganotherberrycategory,be-tween2Band3,withasmallerpremium.Ineithercase,RPIwouldneednewcolorcharts.
If
bothplansareinfeasible,thechiefberryreceivercouldbeinstructedtobelessgenerousingradingberriesin1971.
23
Copyright©2001AllRightsReserved

Activity (9)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads
Vipul Satya liked this
Yilei Liu liked this
Ariel Capetillo liked this
Ariel Capetillo liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->