National Cranberry

1. Mark the capacity and utilization of each resource in the process flow diagram at the end of this document. You may compute either the actual utilization or the implied utilization. [10 points]

Assume one dechaffing unit is used for dry berries, and two dechaffing units are used for wet berries (because the wet berries received are accounted for 75% of the total berries and wet and dry berries are processed through different machines).

1. Enter your answer and supporting arguments for question 2 here. [15 points]

Our calculation is based on the lower storage, which is 3,200 bbls. Assume working time from 7am to 7pm, total 12 hrs

Dumpers operating rate: 17,280*0.75/12 = 1,080 bbls/hr

Inventory build up rate: 1,080 – 600 = 480 bbls/hr

Trucks begin waiting after: 3,200/480 ≈ 6.67 hrs (13:40pm)

At 7pm, total inventory is 5,760 bbls (3,200 bbls in bins, the rest 2,560 bbls in trucks)

Empty truck time: 2,560/600 ≈ 4.26 hrs (23:16pm)

1. Enter your answer and arguments for question 3 here (If you have graphs, please attach them). [20 points]

• The fifth Kiwanee dumpers:

Cost: $75,000, still have high overtime costs

The capacity of each dumper is 600 bbls/hr, and demand is 1,440 bbls/hr. Before purchasing the fifth dumper, U = 1,440/(600*4) = 0.6, which is under full utilization. Thus purchasing the fifth does not improve efficiency.

We do not recommend purchasing the fifth dumper.

• Converting dry bins to wet:

Assume:

Wet and dry berries cannot be mixed in the same bin, and the storage after converting remains the same, which is 250 bbls per bin.

Cost:

Holding bins 1-16: dry berries only, holding bins 17-24: either wet or dry berries, holding bins 25-27: wet berries only.

Currently, only 41% of the bins (11 out of 27 bins) are usable to store wet berries, and 75% of the bins (around 20 out of 27 bins) should be used to store wet berries. Thus, 9 bins (converting from bins 1-16) should be converted to store wet berries. Converting fee is $5,000 per bin. Total cost is 9*$5,000 = $45,000.

Benefit:

New capacity = 9*250 bbls = 2,250 bbls, the total capacity increased 2,250 bbls to 5,450 bbls

Because the capacity is increased, the overtime costs will decrease.

Recommendation: purchasing the fifth dumper is not a good decision, we recommend converting dry bins to wet, or other possible methods.

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