Evaluate the cost-benefit analysis with corresponding roi
1. Bottleneck Analysis
Do a ‘quick and rough’ capacity analysis. Assume the following in your analysis –
a) Average time to unload a truck = 7.5 minutes
b) Do not let the description of the quality grading (also called separation) stage confuse you. Assume that the three separator lines each can separate about 400 bbls. per hour.
c) Assume that the split between dry and wet berries is a 70:30 ratio split to reflect the percentage of wet berries (70%) expected in 1981.
d) Shared resources capacities can be reallocated as necessary between dry and wet berries with little or no changeover time.
e) Actual processing time of berries is very short.
f) Bulking and bagging capacity is more than adequate.
Consider the minimum and maximum capacities at each stage to analyze the boundary conditions. What are the bottlenecks for dry and wet berry processing? What are the capacities (in barrels per hour) for dry and wet berry processing?
2. If you were to assist Mel O’Brien, what would be your recommendations to Mel? What do you think of the decision last winter to buy a fifth Kiwanee dumper?
You may find it useful to consider a day when 18,000 barrels of berries (both Dry and Wet Berries) arrive in trucks between 7 a.m. and 7 p.m. at a constant hourly rate (1,500 barrels/hour). As you know, 70% of the berries are wet.
3. Evaluate the cost-benefit analysis with corresponding ROI numbers for additional investments to capacity, if needed. Consider all possible options across the various stages in the operation.
Article: National Cranberry Cooperative, 1996