This case study on the National Cranberry Cooperative allows students to analyze the production process and system in a cranberry receiving plant.
Jeffrey G. Miller and R. Paul Olsen
Harvard Business Review (675014-PDF-ENG)
August 01, 1974
Case questions answered:
- What problems is National Cranberry Cooperative (NCC) experiencing, and what potential solutions are mentioned?
- Analyze the process in Receiving plant #1 that is processing the water-harvested berries. Determine the capacity, bottleneck, and the maximum number of trucks waiting in line.
- Analyze the impact of starting crews at an earlier time; converting storage bins so that they can be used for water-harvested berries; and installing new dryers.
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Case answers for National Cranberry Cooperative
1. What problems is National Cranberry Cooperative (NCC) experiencing, and what potential solutions are mentioned?
One problem that National Cranberry Cooperative is experiencing is the high overtime costs. To combat this problem, on peak days, NCC can fire up the operation in 2 shifts (7:00am – 3:00pm & 3:00pm – 11:00pm).
Another problem is the trucks waiting in line because bins are full. A possible solution to this problem is the purchase of new equipment.
NCC also needs to purchase a few new dryers, which cost $60,000 each. The company needs more bins for wet berries due to the increased percentage of wet berries. However, NCC can solve this problem by purchasing just a few new dryers and converting some of the dry berry bins (1-16) to wet berry bins ($10,000 per bin).
The company also experiences an incorrect assessment about the quality of berries (2B or 3), causing excess cost. The company can install a light meter system for color grading ($40,000 cost) to help solve this problem.
2. Analyze the process in Receiving plant #1 that is processing the water-harvested berries. Determine the capacity, bottleneck, and the maximum number of trucks waiting in line.
Inventory = Flow Rate * Flow Time
1) Receiving & testing:
Flow rate (from exhibit 1): Total wet pounds delivered/# hours
Total pounds of berries delivered during peak days is around 18,000 (from Exhibit 2)
Out of which, 70% is wet berries -> 12,600 wet berries
# hours = (1140-411)/60 = 729/60 = 12.15 hours (round down to 12 hours for simplicity)
Flow rate: 12,600/12 = 1,050 bbls/hr
Time: 7-8 minutes per truck (avg 7.5 mins) = 0.125 hrs
National Cranberry Cooperative has 5 Kiwanee dumpers, so 5 trucks can empty their contents at the same time
Inventory (Average truck delivery): 75 bbls
Flow rate: 75/0.125 * 5 = 3,000 bbls/hr
3) Temporary holding
Expected % of wet for next year = 70%
Total capacity of bins