National Cranberry Cooperative Essay Example

do in any other part of the process.The next longest process is the separating process.

Assume that, according to exhibit 1 in the National Cranberry Cooperative (Abridged) case, RP1 receives approximately 18,000 barrels of cranberries a day. (see exhibit 3) •The cranberries spend 15 hours in the separator. To speed the drying process, RP1 should buy two more dryers. These two dryers will raise the dryer capacity to 1000 barrels per hour. Adding the dryers will lower the time the cranberries spend in the dryers enough to relieve the bottleneck. see exhibit 3) •At 12,600 (70% of 18,000) wet barrels per day, the cranberries currently spend 21 hours a day in the dryers.

•Adding one dryer lowers the time in the dryers to 15. 75 hours a day. •Adding two dryers lowers the time in the dryers to 12. 6 hours a day. Spending 12.

6 hours in the dryers relieves the dryer bottleneck and the separator becomes the bottleneck. Long-term, RP1 should begin to look at how to relieve this next bottleneck. The time spent waiting for the holding bins to empty causes extra overtime.Simply adding in two new dryers will decrease this overtime.

The 21 hours currently spent in the dryers will be decreased to 12. 6 hours. However, the slowest process will then be the separator at 15 barrels per hour, so the throughput time is cut by (21-15=6) six hours. This results in an average of six overtime hours saved daily.

Currently, there is no need to add holding bins. While the bottleneck is still located in the dryers, adding capacity in the holding bins will only cause the cranberries to

wait in the bins longer and will not improve throughput time.Purchasing two new dryers for the National Cranberry Cooperative’s receiving plant number 1 will reduce the wait time for trucks by speeding up the overall process. The quicker process will result in a reduction of overtime hours.

The two new dryers will cost RF1 $40,000 each, for a total of $80,000. Saving six hours a day in overtime will reduce the yearly overtime by 18% (6 hours a day*7 days a week*52 weeks a year = 2,184 hours), saving the plant $21,300 per year in overtime costs. The dryers can pay for themselves in four years.