National Cranberry Cooperative Harvard Case Solution & Analysis

National Cranberry Cooperative Case Solution

Problem Statement

National Cranberry Cooperation is considered as the largest organization in US, which operates in berries industry, and its operations have spread throughout the US. The operations of the company are highly mechanized and it involves several processes in order to bring berries to the market. Management of the company is facing the problem of increased in overhead cost instead investing heavy amount in order to improve processes at RP1.

national cranberry cooperative case solution

national cranberry cooperative case solution

Cost Analysis

It is expected that company delivers about 18340 barrels per day and for this purpose company 243 trucks in the distribution network of the company. The average capacity of each truck is about 75 barrels.
The management of the company performs sample check on daily basis. For sample check purpose management of the company decides 0.3 barrels on daily basis. On the basis of sample analysis management concluded that the grower is credited with respect to the quality rating of the color.
Management of the company take certain measures in order to improve the quality of the berries and it is expected that bonus of 0.5 dollar per barrel paid in order to get the best quality of berries and it is expected that it helps to a certain limit and increases the percentage of delivery of cranberries but it also increases the amount of labor wages and bonus amount which creates serious concerns for the management of the company.
Moreover in order to increases the amount of deliveries it is expected that a light meter should be installed which could cost 10000 dollars to the company. In addition to this it is expected that in order to run this light meter system permanent skilled operator is also required which would cost the same as the chief berry receiver.
It is expected that trucks dumped berries in to the bumpers in order to process these berries and cost of each bumper is about 200,000 dollars. Management of the company analyze that demand of wet berries is continuously increasing. With regards of increasing demand of wet berries which would cost $10,000 per bin. If management decides to change sixteen bins it would cost $160,000 which is also the matter of serious concern for the management of the company.

Work Force Analysis

It is expected that company has 27 permanent workers in order to perform operations during harvest season which remains for about 3 to 4 months and expected wage rate of each employee is $3.75/hour. In order to sun operations more smoothly management of the company also arrange 15 seasonal workers on a wage rate of $2.25/hour and expected time duration of seasonal workers is about five months and expected working time of these workers is about 40 hours per week. Whereas, there are 15 seasonal workers for a time period of 5 months and 10 days who are paid $2.25/hour. Furthermore, if the seasonal workers carry on their work for more than 40 hours per week. Moreover over time of these seasonal workers is paid on 1-1/2 basis.
It is expected that demand of the berries remains high for 3.5 months and during these months expected workforce of the company includes 27 permanent workers and 15 seasonal workers. The average number of workers for the remaining months is supposed to be 27 workers which work in different shifts and it is expected that average time of running of machine is expected to be 22 hours in a day and maximum working time of plant is also about 22 hours in a day.
It is expected that during peak season normally 9 workers worked more than average 40 hours in a week which increases the total labor wages significantly and it creates serious problems for the management of the company..................

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