Cranberry Cooperative Association Essay Example

justify;">Bins: designed to accommodate the growing quantity of moist berries (Exhibit 1)

The cost benefit analysis for the proposed actions is as follows:

The suggested changes in the analysis align with our anticipation of an increase in wet berry production due to rapidly advancing technology.

Our analysis is based on the following assumptions:

• - Supply of cranberries -18000 barrels/ day
• - Supply of Wet cranberries - 70% and Dry cranberries - 30%
• - Wet and Dry cranberries are taken up as 2 different products while processing
• - Supply of cranberries is staggered over 12 hours each day
• - Plant operates throughout the day without disruption
• - Steady state of operations is assumed (that the process is always full)
• - Shared resources between wet and dry processes will be split in the ratio of 70-30 for capacity calculation
• - Kiwane dumpers usage is assumed to be divided in 3 being allocated to wet cranberries and 2 allocated to dry cranberries
• - All

the common holding bins will be used for wet cranberries

The exhibit 1 shows the process flow diagram of cranberry processing, and exhibit 2 displays the calculation of process capacity and utilization. It is possible to switch the common process smoothly from one type of cranberry processing to another.

The colour grading system was found to inaccurately categorize grad 2b berries as class 3 berries in 50% of cases, resulting in suppliers not receiving the appropriate premium. Our analysis of a business case for implementing a new colour grading system is as follows: Premium Paid = $1.5 per barrel for Type 3.

In 1995, there were 450,000 barrels of berries that could potentially be categorized as grade 3 berries. Out of these, 50 percent (225,000 barrels) were wrongly identified, resulting in an excessive payment of $337,500. The installation of a light meter, costing $40,000 and taking 6 months to set up, is necessary. An operator is also needed to run the light meter, but since they will be paid the same as the Chief Berry receiver, there will be no extra cost in operating the machine.