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1. What are the most critical problems facing National Cranberry that Mr. Schaeffer must address?

A high level process flow diagram for the plant is as shown below,




As can be seen, there are a few problem areas that needs immediate attention,
a. Installing Light Meter System
b. Reducing unloading wait times
c. Increasing total temporary holding capacity for bins for wet berries
d. Increasing the throughput for Drying

A closer look at data from Exhibit 2 provides some information on the possible root cause of the
truck unloading times.

Regular Plant hours Per Day: 16
Max Wet Processing with Drying capacity @600 bbls/hr: 9,600 bbls/day

Day
Total Deliveries
(scale weight in
bbls.)
Delivered Wet
(%)
Delivered Wet
(scale weight in bbls.)
9/20 16,014 31 4,964
9/21 17,024 39 6,639
9/22 16,550 39 6,455
9/23 18,340 42 7,703
9/24 18,879 41 7,740
9/25 18,257 36 6,573
9/26 17,905 45 8,057
9/27 16,281 42 6,838
9/28 13,343 38 5,070
9/29 18,717 43 8,048
9/30 18,063 59 10,657
10/1 18,018 69 12,432
10/2 15,195 60 9,117
10/3 15,816 60 9,490
10/4 16,536 57 9,426
10/5 17,304 55 9,517
10/6 14,793 46 6,805
10/7 13,862 61 8,456
10/8 11,786 56 6,600
10/9 14,913 54 8,053
As can be seen from the data highlighted above, we can see that we are exceeding or close to
the maximum capacity for Drying for processing wet berries. Thus this could be a potential
bottleneck within the system that could be leading to the filling up of the temporary holding bins,
in turn causing long truck wait times.

All this seems to be adding to the out of control overtime costs currently being seen for the
plant. With more wet berries expected to be processed for next year, the problem may get even
worse leading to more overtime costs.

Overall, it seems that the plant is more geared towards processing dry berries. The plant has
not kept pace with the processing capabilities needed for wet berries even as deliveries for wet
berries have gone up substantially in the last few years.


2. For your numerical analysis, consider a day where 18,000 barrels of berries arrive of which 70%
are wet. Assume that trucks arrive evenly spaced throughout an 11-hour day starting at 7:00
am, and that processing operations (i.e. receiving, dechaffing, milling, etc.) also start at 7:00 am.
Estimate the number of hours the plant must operate to complete the day's work.

Total Berries = 18,000
Wet Berries @70% = 18,000*70% = 12,600
Dry Berries @30% = 18,000*30% = 5,400

Since first set of truck arrives at 0th hour, we will have delivery for 12 hours. Therefore,
throughput for wet berries and dry berries,

wet = 12,600/12 = 1,050 bbl/hr
dry = 5400/12 = 450 bbl/hr

Looking at the process flow for the two operations,




For the dry berries there are no wait times as such processing of dry berries will finish in 12
hours.

Since we have a bottleneck at Drying for the processing of the wet berries, the total processing
times will be much more. In this case,

Makespan =(1050 bbls/hr * 12 hr) / (600 bbls/hr) =21 hours

Thus the plant must operate for 21 hours to finish the days work.


3. When during the day would trucks be waiting? How much truck waiting time would you expect?

Maximum total temporary holding bin capacity for wet berries is 3,200 bbls (3*400 + 250 *8).
wet = 12,600/12 = 1,050 bbl/hr
drying = 600 bbl/hr
INV (drying) = 450 bbl/hr

Truck waiting time would start when the bins for the wet berries will be full.
Truck wait time start = Max Capacity/ INV buildup rate
Truck wait time start = 3,200 bbl/450 bbl/hr = 7.11

If trucks start arriving at 7:00 AM, then the truck wait times would start at around 2:00
PM.


We can also see Inventory buildup as follows,

Time
Bin INV
(Backlog)
INV on
Trucks
# Trucks
Waiting
7:00 0 0 0


As can be seen, the trucks start waiting right after 2:00 PM and the truck queue clears out at
22:40 PM when the Bin INV falls back to maximum capacity of 3200 bbls.

Total truck wait time would be equal to sum of # of trucks waiting each hour. From the table
above, this would be equal to 127 hours.

We can also see that the maximum Inventory of unprocessed wet berries = (1050-600)*12 =
5,400 bbls is at 19:00. That is also the time when the last of the trucks would roll in for the day.


4. Suppose the cost of renting trucks with drivers is $18.00/hour. Based on your analysis, what
recommendations would you make to Mr. Schaeffer?

Option 1: Buying and installing two new dryers

Cost =2*25,000 =$50,000 (This will increase the drying capacity to 1,000 bbl/hr)


Option 2: Converting dry berry holding bins to dry or wet holding bins

We are short in holding wet capacity by 2,200 bbls. Thus we will have to convert a minimum of 9
bins

Cost of converting 9 dry berry holding bins =9*5,000 =$45,000


8:00 450 0 0
9:00 900 0 0
10:00 1350 0 0
11:00 1800 0 0
12:00 2250 0 0
13:00 2700 0 0
14:00 3150 0 0
15:00 3600 400 5
16:00 4050 850 11
17:00 4500 1300 17
18:00 4950 1750 23
19:00 5400 2200 29
20:00 4800 1600 21
21:00 4200 1000 13
22:00 3600 400 5
22:40 3200 0 0
23:00 3000 0 0
0:00 2400 0 0
1:00 1800 0 0
2:00 1200 0 0
3:00 600 0 0
4:00 0 0 0
Option 3: Compensate growers for driver overtime

Cost Total overtime: 12,000 * 2.25*1.5 = $40,500
Cost Driver compensation = 127 * 18 = $2,286

Total Cost =42,786

Even with overtime costs, Option 3 comes out to be cheaper than options 1 & 2.

Another recommendation would be to install the Light Meter System

Plant paid $0.50 on 450,000 bbl. @ 50% over charge and install cost of 10,000,
Savings =0.5*0.5*450,000 10,000 =$102,500

Thus the plant would be saving $102,500 with the Light Meter System

5. Suppose the cost of converting dry berry holding bins so they can store either water-harvested
or dry berries drops to $2,000 per bin. If everything else remains unchanged, how would this
cost reduction affect your recommendations?

With reduced cost of conversion,

Cost of converting 9 dry berry holding bins =9*2,000 =18,000

This is much cheaper than Option 3 as calculated above. Thus, in such a scenario we would
recommend Option 2 and not Option 3.

6. What is the capacity (in bbl. per hour) of receiving plant 1 (RP1)?

Total plant capacity is determined by Separator process @ 1,200 bbl/hr. This assumes
processing Wet berries @600 bbl/hr and Dry berries @600 bbl/hr