Prepare and submit a case memo on the course site. Follow instructions you find there. As you prepare your memo, please note these assumptions concerning RP#1 operations as the basis for your analysis and recommendations. Some of them differ slightly from statements in the case. On a typical busy day, 17,280 barrels (bbl) of cranberry deliveries arrive evenly over the 12-hr period starting from 7am. This is based on a typical busy day in September. Since berries arrive evenly, you can ignore variability in calculation Plant processing is assumed to start at 7 a.m., and any work after the scheduled end of the second shift at 11:00 p.m. will incur overtime costs The process is approximately a continuous flow type. Wet berries are 75% of all berries, dry berries 25% Holding bins 17-24 are dedicated to wet berries. Capacity of the dumpers is 3,000 bbl / hr (logic: it takes on average 7.5 minutes to dump a truck, a truck holds on average 75 bbl. So, from Littles Law, each of the five dumpers will take 600 bbl / hr). There are 3 (not 9) separator lines, with maximum rate of 450 bbl/hour per line, average effective capacity of about 400 bbl/hour per line. Cranberry processing operation steps (shown as boxes in the flow map) hold negligible amount of inventory compared to what bins and trucks (shown as triangles in the flow map) can hold. Drivers are paid $100/hr. Rates for other employees are given in the case.

Question 4: (10 points) Analyze Capital Investment Decisions: Bin Conversions

Suppose that no new dryers will be purchased. An alternative countermeasure to accommodate an increase in the percentage of wet berries in the current year is to convert some of the dry-only bins to accommodate wet berries. A. How many bins would NCC need to convert to eliminate all truck waiting? B. Using your answer from 4A, quantify the costs and benefits of this investment. C. Recommend best number of bins to convert and justify briefly. D. If you could choose dryer purchase, bin conversion or a combination, what would you choose? Justify briefly.