NATIONAL

CRANBERRY
CORPORATION

Firdos PGP/14/142
Jovie PGP/14/145
Karthika PGP/14/148
Nitish PGP/14/155
Punyata PGP/14/167
Shikha PGP/14/175
The Cooperative
 NCC, is an organization which processes and
markets cranberries
 It is owned by the Cranberry growers
 99 percent of the sales are through the
Cooperative
 NCC one of the largest cooperatives
 One of the largest cooperatives in New
England states and eastern states in USA
 Case Facts
 In 1968 there was surplus production of Cranberries,
there was more production than utilization which led
to the growers resorting to Agricultural Marketing Act
of 1937

 Under this act, growers can regulate and control the

size of an agricultural market if the federal govt. and
more than two-thirds of the growers by number agree
to restrict crop produce.

 In
1970, the growers resorted to Agricultural
Marketing Act of 1937 again.
Case Facts Contd…
 In dry harvesting, cranberries were hand picked
 Increased mechanization of cranberry
processing
 Water harvesting - bogs were flooded &
cranberries were picked up from the surface of
water
 Increase in yield up to 20%
 Water harvesting increased rapidly
 Water harvesting caused some damage and
shortened the time cranberries could be held
prior to use or storage
Case Facts Contd…
 Percentage of water harvested berries is
expected to increase to 70% of total processed
fruits this year [1971]
 Last year water harvested berries constituted
58% of crop size.
 In Sept-Oct 1970, the total berries delivered
were 610,040 bbls.
 Maximum delivery in a day was 18,879 bbls
 Maximum wet berries delivered in a day were
12,432 bbls
Process Flow
Decision Problem

What measures should the NCC implement to

reduce truck waiting time and overhead
costs?
 Analysis
 The Bottleneck is the slowest process
 Bottleneck for wet berries processing is the dryer
which operates at 600 barrels/hour
 Berries start arriving at 7 AM and processing
starts at 11 AM
 BBLS of wet berries/hour = (18,879*.7)/12 =
1100 BBLS/hour
 BBLS of wet berries that temporary bins cannot
handle at 11 AM = 4400 – 3200 = 1200 BBLS
waiting on truck
Analysis contd…
 Wet berries arrive at 1100 BBLS/hour and
processing capacity is 600 BBLS/hour starting at 11
AM
 By 7 PM 8400 BBLS of wet berries are pending to be
processed(3200 BBLS in bins and 5200 BBLS on
trucks)
 Trucks finish unloading at 3.40 AM .
 This causes high waiting time for trucks and overtime
employment for workers
Recommended Solutions
1. Start processing at 7 AM with 2 shift system (8
hours each)
 At 7 PM there are (1100*12) – (600*12) – 3200 =
2800 BBLS waiting on truck
 Truck unloading finishes at 11.40 PM

Activity Cost for second shift

Receiving (6*6.5 + 9*4)*8 = 600
Destone, Dechaff and Drying (6.5*1)*8 = 52

Milling (10*6.5+ 5*4)*8 = 680

Shipping (8*6.5+12*4) = 800
Recommended Solutions Contd…

 Total overtime cost = $9555

 Second Shift cost = $63960
 Total cost / month = $73515

Activity Overtime hours Costs incurred /day ($)

Receiving 1 (6*6.5 + 9*6) = 93
Destone, Dechaff and 1 (6.5*1) = 6.5
Drying
Milling 1 (10*6.5+ 5*6) = 95
Shipping 1 (8*6.5+12*6) = 124
2. Install 2 new Dryers at ($40,000 each)
 Drying capacity increases to 200*5 =
1000BBLS/hour
 At 7 PM there are 2000 BBLS waiting on trucks
which gets cleared
Activity
by 8 PM
Overtime hours Costs incurred /day ($)
Receiving 5 (6*6.5 + 9*6)*5 = 465
Destone, Dechaff and 1 (6.5*1*1) = 6.5
Drying
Milling 1 (10*6.5+ 5*6) *1 = 95
Shipping 1 (8*6.5+12*6)*1 = 124

One month overtime cost = $20715 + Initial

Investment of $80,000
3. Convert Dry Berry holding to wet berry holding bins
 Convert 13 Dry berry holding bins into Wet berry
holding bins @ $7500 / bin = $97,500
 At 7 PM, 1950 BBLS on trucks which will be cleared
by 10.15 PM
Activity Overtime hours Costs incurred /day ($)
Receiving 8 (6*6.5 + 9*6)*8 = 744
Destone, Dechaff and 4 (6.5*1*4) = 26
Drying
Milling 4 (10*6.5+ 5*6) *4 = 380
Shipping 4 (8*6.5+12*6)*4 = 496

 Total overtime cost = $49,380

 Initial investment cost = $97,500
Should a Light Meter System be Installed?

 Totalcost = $20000
 Benefit/ Year = (450,000* .75*.5) = $168750
 We recommend this system be installed
Conclusion
 We recommend the installation of 2 dryers at
$80,000 with overtime cost of $20715/ month
during peak season
 Install the light meter system to reduce costs
incurred by inaccurate grading of berries
Thank you