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OM - I National Cranberry Cooperation

# OM - I National Cranberry Cooperation

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# INDIAN INSTITUTE OF MANAGEMENT, INDORE

Operations Management - I Assignment – 1 National Cranberry Cooperative

Course Instructor: Prof. A H Kalro
Date of Submission: 16th August, 2009 Submitted by Group 11, Section C Jigar Jain Manish Verma Parul Gupta Angad Kikla Hara Prasad Pradhan

67 Time Dry Berries: Entering Rate = 3000/11 = 272. 2) When required.000/ (28.600 = 36 bbls 3200 Inventory 396 11 11.ASSUMPTIONS: 1) There is a cost associated with trucks waiting to be unloaded and it is \$5 per hour.33 hrs Assuming that workers are paid = 1.000/1200 = 8.36 bbls/hr Rate of accumulation of wet berries = 636 .92’ hrs/day. Case A: 10000 bbls of Berries Average Daily Arrival = 10000 Wet Berries ( @ 70% ) = 7000 Dry Berries = 3000 Dryer Speed = 3*200 = 600 per hour Wet Berries: Arrival Rate of wet berries per hour = 7000/11 = 636.5 * 6.72 bbls/hr If wet berries are consumed at rate of 600 bbls/hr then (1200-600)bbls/hr of capacity in miller is free Hence there is no Requirement of any additional Capacity. ANALYSIS ON DRYERS TO BE PROCURED Time taken for manufacturing wet berries = 600/hour Total time taken to manufacture wet berries = 7000/600 = 11.5 \$/hr = 9.75 \$/hr Reduction of ‘2.000/1.67 hrs 4 DRYERS (Speed = 4*200 = 800 bbls/hr) Total time for dryers = 7.47 \$/day Payback time = 40.000/800 = 8.000 = 7 . for overtime we have considered full-year employees working.83 months 5 DRYERS (Speed = 5*200 = 1000 bbls/hr) Total time for dryers = 7.75 hrs Milling: total time = 10.47 * 30) = 46. results in = 28.

33 8.56 \$/day Payback time = 80.9 IN SAVING OF TRUCK WAITING TIME (with 1 extra dryer): Truck waiting time for 3 dryers: 0 hr Truck waiting time for 4 dryers: 0 hr BIN CONVERSION REQUIREMENT: No dry bins need to be converted to dry/wet bins SCHEDULING OF WORKFORCE AND ANOTHER SHIFT: Here the overtime is so minimal.Milling: total time = 8.33 8.33 REDUCTION FROM 3 DRYERS 0 2.56 * 30) = 81. the optimum strategy will be to procure one new dryer. NUMBER DRYERS 3 4 5 OF DRYING TIME 11.92 3. .34’ hrs/day.34 PAY BACK MONTHS 46.67 8.000/ (32. that addition of another shift is not required.33 hours Reduction of ‘3. results in = 32.75 7 MILLING TIME 8.8 81.98 months Therefore.

5 hrs 4 DRYERS (Speed = 4*200 = 800 bbls/hr) Total time for dryers = 10500/800 = 13.375’ hrs/day.5 Time Dry berries are entering at rate = 4500/11 = 409bbls/hr Since 600 bbls/hr of mining is free.67 17.5 * 6.66 * 30) = 31. there is no accumulation of dry berries in holding tanks.5 Milling: total time = 12.Case B: 15000 bbls of Berries Average Daily Arrival = 15000 Wet Berries ( @ 70% )= 10500 Dry Berries = 4500 Dryer Speed = 3*200 = 600 per hour Wet Berries: Arrival rate per hour = 10500/11 = 955 bbls/hr Therefore.5 hrs Assuming that workers are paid = 1.75 \$/day Payback time = 80.000/ (42.7 months . rate of accumulation = 955-600 = 355 bbls/hr Inventory 3900 3200 9.5 hours Reduction of ‘5’ hrs/day. ANALYSIS ON DRYERS TO BE PROCURED Time taken for manufacturing wet berries = 600/hour Total time taken to manufacture wet berries = 10500/600 = 17.000/ (48.75 * 30) = 54.5 \$/hr = 9.25 months 5 DRYERS (Speed = 5*200 = 1000 bbls/hr) Total time for dryers = 10500/1000 = 10.75 \$/hr Reduction of ‘4.125 hrs Milling: total time = 15000/1200 = 12.66 \$/day Payback time = 40. results in = 42. results in = 48.03 11 12.

5 REDUCTION FROM 3 DRYERS 0 4. . NUMBER DRYERS 3 4 5 OF DRYING TIME 17. per worker spending = 5.125 * 6.5 12.5 = \$52 (per worker per day) So it would be better to have overtime instead of adding one extra shift.7 IN SAVING OF TRUCK WAITING TIME (with 1 extra dryer): Truck waiting time for 3 dryers: 17.5 * 1. the optimum strategy will be to procure one new dryer.5 12.5 = \$49.125 10.08 hr Truck waiting time for 4 dryers: 0 hr BIN CONVERSION REQUIREMENT: No dry bins need to be converted to dry/wet bins SCHEDULING OF WORKFORCE AND ANOTHER SHIFT: Here the overtime is very high (5.97 (per worker per day) In case of more shift.125 hrs).5 MILLING TIME 12.5 13. we should calculate the overhead in both case (overtime and extra shift).375 5 PAYBACK MONTHS 31. In case of overtime.Therefore.25 54. per worker spending = 8 * 6.

there is no accumulation of dry berries in holding tanks.000/ (65.84 * 30) = 23.84 \$/day Payback time = 40.76 11 Time 18 23.03 * 30) = 41.5 hrs Milling: total time = 20000/1200 = 16.25 months .66 hours Reduction of ‘6.66 hrs Assuming that workers are paid = 1.3 Dry berries are entering at rate = 6000/11 = 545.83’ hrs/day.67’ hrs/day.75 \$/hr Reduction of ‘5.Case C: 20000 bbls of Berries Average Daily Arrival = 20000 Wet Berries ( @ 70% )= 14000 Dry Berries = 6000 Dryer Speed = 3*200 = 600 per hour Wet Berries: Incoming rate of Wet berries = 14000/11 = 1272 bbls/hr Accumulation rate = 1272-600 = 672 bbls/hr 7400 Inventory 3200 4.5 months 5 DRYERS (Speed = 5*200 = 1000 bbls/hr) Total time for dryers = 14000/1000 = 14 Milling: total time = 16.5 \$/hr = 9.03 \$/day Payback time = 80.45 bbls/hr Since 600 bbls/hr of mining is free. ANALYSIS ON DRYERS TO BE PROCURED Time taken for manufacturing wet berries = 600/hour Total time taken to manufacture wet berries = 14000/600 = 23.33 hrs 4 DRYERS (Speed = 4*200 = 800 bbls/hr) Total time for dryers = 14000/800 = 17. results in = 56. results in = 65.000/ (56.5 * 6.

waiting time = 68. Saving = \$640 Addition of 3rd bin is not cost effective. and the rest 1.Therefore. So we should go with converting 2 dry bins to dry/wet bins.25 IN SAVING OF TRUCK WAITING TIME (with 1 extra dryer): Truck waiting time for 3 dryers: 370. NUMBER DRYERS 3 4 5 OF DRYING TIME 22.7500 (Cost of conversion) = \$1981 Similarly.5 hrs).72 hr Truck waiting time for 4 dryers: 89.67 16.5 hrs should be allowed for overtime.5 41. SCHEDULING OF WORKFORCE AND ANOTHER SHIFT: Here the overtime is very high (9.67 REDUCTION FROM 3 DRYERS 0 5.3 17.8 6.63 PAYBACK MONTHS 23. . by converting 2 bins.24 * 5 * 90 = \$40158 By converting 1 bin.7 16. so it will be nice idea to add another shift of 8 hours.17 hr Cost of truck waiting = \$30677 Saving = (40158 . the optimum strategy will be to procure one new dryer.30677) .5 14 MILLING TIME 16.24 hr BIN CONVERSION REQUIREMENT: Some dry bins need to be converted to dry/wet bins Cost of truck waiting: = waiting hour * hourly rate * total number of daye = 89.

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