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Fig 1: Process Flow Diagram Vinod Gupta School of Management IIT Kharagpur National Cranberry Cooperative
De-chaffing Capacity No. of de-chaffing units = 3 Capacity of each unit = 1500 bbls/hr Total de-chaffing capacity = 4500 bbls/hr Jumbo Separator and Bailey Mill Lines No. of separator units = 3 Average capacity of each unit = 400 bbls/hr Total separator capacity = 1200 bbls/hr Bagging Station Capacity Maximum output per day = 8000 Working hours = 12hrs. Capacity = 8000/12 = 667 bbls per day Bulk Bin Loading Capacity No. of loaders for bulk bin loading = 4 Capacity of each loader = 200 bbls/day Total bulk bin loading capacity = 4 * 200 = 800 bbls per day. Bulk Truck Loading Capacity No. of loaders of bulk trucks = 2 Capacity of each loader =1000 bbls/hr Total Capacity Bulk Truck loading Capacity = 2000 bbls/hr
At the end of 11 hours we have 6699 bbls of berries to be stored (609*11) out of which 3499 are waiting in trucks and 3200 are in inventory area. We also know one truck has 75bbls of berries so we have total 47 trucks (3499/75) in waiting which will take 5.83 hours (3499/609) to clear. Total time spent by truck drivers to unload is 270 hours (5.8*47) Labor overtime cost is 3.7*27*1.5*13for 10k bbls
Labor overtime cost for 20k bbls is 14.2*27*1.5*13+14.2*26*1.5*8 This can be summarized as 10000 bbls Dryer hours Plant operating hours Truck hours waiting Truck waiting cost(in $) Labor waiting time Labor waiting cost(in $) Table 1 11.7 8 0 0 3.7 1948.05 20000bbls 23 8 270 27000 14.2 11906.7
Now let us analyse various options that we have Solution 1 - Increase number of dryers by 1 New dryer capacity is 800 bbls/hr Labor overtime cost is 0.75*27*1.5*13= 394.875 Labor overtime cost for 20k bbls is 9.5*27*1.5*13+9.5*26*1.5*8=7965.75 Vinod Gupta School of Management IIT Kharagpur National Cranberry Cooperative
This can be summarized as 10000 bbls Dryer hours Plant operating hours Truck hours waiting Truck waiting cost(in $) Labor waiting time Labor waiting cost(in $) Cost of additional dryer Table 2 Total savings (1948.05+11906.7)-(394.875+7965.75) = 5494.125 We have return on investment 5494/60000*100 =9.2% 8.75 8 0 0 0.75 394.875 60000 20000bbls 17.5 8 54 5400 9.5 7965.75 60000
Solution 2 - Increase number of dryers by 2 New dyer capacity is 1000 bbls/hr Labor overtime cost is 0 in case of 10k bbls Labor overtime cost for 20k bbls is 6*27*1.5*13+6*26*1.5*8=2187.9 in case of 20k bbls This can be summarized as
10000 bbls Dryer hours Plant operating hours Vinod Gupta School of Management IIT Kharagpur 7 8
20000bbls 14 8
Truck hours waiting Truck waiting cost(in $) Labor waiting time Labor waiting cost(in $) Cost of 2 additional dryer Table 3 Total savings (1948.05+11906.7)-(2187.9) = 11666.85 Return on Investment 11666.85*100/120000 =9.75
0 0 0 0 120000
0 0 6 11666.85 120000
Option 2: Converting Dry bin into bins that can be used for both dry and wet bins
10000 bbls Bins used for dry berries Plant operating hours Truck hours waiting Truck waiting cost(in $) Labor waiting time Labor waiting cost(in $) Cost of 2 additional dryer 7 8 0 0 0 0 120000