ISE 311 Case Study 1 Presentation

1. Mr. Albert’s Harvesting Decision
Dr. Greene
Jacob Groezinger | Nitzan Hillel | Arthur Itzhaki | Brandon Kerr
Team 3
ISE 311 A51 – Enterprise Systems
Monday, February 22, 2016

2. Agenda
Introduction
Assumptions
Background
Analysis
Conclusions
Recommendations
Ideas for Future Research

3. Framework Analysis Conclusions Recommendation
Introduction
Mr. Albert’s Farm
• Location:
• Ord, Nebraska
• Mission:
• Harvests three different-shaped fields
• Experience:
• Crew was late last year
• Mr. Albert feels that he lost his money
• Requests:
• Time and cost estimates
• Advice on which direction to go in
3

4. Framework Analysis Conclusions Recommendation
Assumptions
General Assumptions:
• Timeframe: November (before harvesting season)
• Hiring a trustworthy crew
• Quality of the work between the two groups is comparable
• Itinerant crew will be working the same amount of hours this year as they
worked last year
• Mr. Albert is in good health
4

5. Framework Analysis Conclusions Recommendation
Assumptions (con’t)
Calculation Assumptions:
• Labor rates and base prices constant
• Inflation: 1.37% / year
• The indirect costs remain constant
• Harvesting process is started on-time
• Crew works 13.5 hours per day
• No additional costs in finding workers
• When the tractor turns, it is pivoting on one point and not changing location
5

6. Framework Analysis Conclusions Recommendation
Assumptions (con’t)
Harvesting Assumptions:
• Mr. Albert is using fields to harvest corn:
• 58.7% of Nebraska crop revenue
• 47.5% of Nebraska crop volume
• Harvesting season for corn is July through September
• Quality of the crops are similar year to year
• Consistent weather for optimal harvest
7

7. Framework Analysis Conclusions Recommendation
Objective
Task:
Evaluate current harvesting situation and determine the costs associated
Intended Output:
Provide a recommendation about the two pathways
Dimensions:
Outline of initiative, expected benefits and costs, discussion of the
implementation plan, and potential risks
11

8. Framework Analysis Conclusions Recommendations
Overview of Fields
South Field North Field Penny Hill
~731 acres ~704 acres ~336 acres

9. Framework Analysis Conclusions Recommendations
Annual Worth Over Five Years
0 1 2 3 4 5
$800,000.00
$900,000.00
$1,000,000.00
$1,100,000.00
$1,200,000.00
$1,300,000.00
$1,400,000.00
Cost
Year
Annual Worth Analysis
DIY Total
Itinerant Total

10. Framework Analysis Conclusions Recommendations
Difference in AW (5 Years)
-$150,000.00
-$100,000.00
-$50,000.00
$0.00
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
$350,000.00
Cost
Yearly Difference
Difference from Itinerant and Independent AW

11. Framework Analysis Conclusions Recommendations
Present Worth Graph (5 Years)
$5,219,976
$5,904,034
$4,300,000
$4,500,000
$4,700,000
$4,900,000
$5,100,000
$5,300,000
$5,500,000
$5,700,000
$5,900,000
$6,100,000
$6,300,000
PW DIY PW Itinerant
Cost
Present Worth Cost Analysis

12. Framework Analysis Conclusions Recommendations
Key Pathways
Harvest Individually Hire Itinerant Company
5-Year Present Value of Cost: $5.22 million 5-Year Present Value of Cost: $5.90 million
Timeline: 56 working days Timeline: 54 working days
Pros Cons Pros Cons
Trustworthy and
dependable crew
Hassle of hiring and
managing crew
Does not need to worry
about managing a team
Hassle of making sure
company is working
effectively
Complete autonomy
Having to train new
employees
No investment in
equipment
May arrive late
Branding around values
Research equipment to
buy
No training necessary
Not invested in business
outcome

13. Framework Analysis Conclusions Recommendations
Recommendation
Hire
Independent
Crew
Long-Term
Investment
Betrayal
Unforeseen
Circumstances

14. Framework Analysis Conclusions Recommendations
One Year Roadmap
Recruit and
find qualified
candidates
Prep for
harvesting
season
Harvesting
season
Follow-up
to ensure
satisfaction

15. Framework Analysis Conclusions Recommendations
Risks and Mitigants
Down Season
for Crops
• Other
business
endeavors
(farmer’s
market,
restaurant)
• Sell future
contracts on
corn product
Technological
Advancements
• Find a trade-
in or upgrade
program
• Develop
strategy for
harnessing
new
technologies
Equipment
Failure
• Equipment
insurance
• Hire internal
mechanics
Natural
Disaster
• Crop
insurance
• In case of
drought,
research
methods for
effective
water use

16. Framework Analysis Conclusions Recommendations
Ideas for Future Research
Ideas for Future Research
• Strategy for incorporating new
technologies
• Exit opportunities
• Potential opportunities to expand
farm
• Employee development program
• Continuous process improvement
for Mr. Albert’s supply chain

17. Questions

18. • Boucher, Matt. (2013). Just What do Farmers do in the Winter Anyhow? Off
the Cobb.
• Farmland Investor Center. (2014). Considering Hiring a Farm Manager?
• Hofstrand, Don. (2007). Farm Business Strategies. Iowa State University,
Extension and Outreach.
• McMahon, Tim. (2014). Average Annual Inflation by Decade. Long Term U.S.
Inflation.
• NetState. (2015). Nebraska Economy. Nebraska.
• PickYourOwn. (2015). Nebraska Crop Harvest Calendar.
References

19. Appendix

20. Assuming it's 258 rods
South Field DIY Using Itinerant
Speed (ft/min) 176.00 185.00
Laps 266.06 266.06
Minutes per Lap 40.88 38.89
Cutting time (min) 10,875.30 10,346.24
Turning Time (2*90deg) 79.50 79.50
moving up 16 ft (min) 24.09 22.92
Cutting and Turning Time 10,978.90 10,448.65
Amount of Empties 304.97 290.24
Addition Emptying Time 5,885.91 5,601.64
Total Field Time (min) 16,864.80 16,050.29
(hour) 281.08 267.50
Total Miles 363.31 363.31
South Field Calculations – 258 Rods

21. South Field Calculations (con’t)
DIY Cost Using Itinerant
3 Truck rental per day 9,681.65
2 Truck rental per mile 247.05
1 Truck rental per mile 65.40
3 Driver 14,672.38 Total Cost per Hour 130,809.90
1 Harvester 7,589.16 Total Cost per Mile 181.66
Total 32,255.64 Total 130,991.56

22. South Field Calculations – 268 rods
Assuming 268 rods
South Field DIY Using Itinerant
Speed (ft/min) 176.00 185.00
Laps 276.38 276.38
Minutes per Lap 40.88 38.89
Cutting time (min) 11,296.83 10,747.25
Turning Time (2*90deg) 82.80 82.80
moving up 16 ft (min) 25.09 23.87
Cutting and Turning Time 11,404.72 10,853.92
Amount of Empties 316.80 301.50
Addition Emptying Time 6,114.20 5,818.91
Total Field Time (min) 17,518.92 16,672.83
(hour) 291.98 277.88
Total Miles 377.36 377.36

23. South Field Calculations (con’t )
DIY Cost Using Itinerant
3 Truck rental per day 10,057.16
2 Truck rental per mile 256.61
1 Truck rental per mile 67.93
3 Driver 15,241.46 Total Cost per Hour 135,883.58
1 Harvester 7,883.51 Total Cost per Mile 188.68
Total 33,506.66 Total 136,072.26

24. North Field DIY Using Itinerant
First 2 passes speed 80.00 80.00
laps 2.00 2.00
Minutes per Lap 503.03 503.03
Cutting Time 1,006.07 1,006.07
Amount of Empties 27.95 27.95
Addition Emptying Time 539.36 539.36
Total field time (min) 1,545.43 1,545.43
Speed (ft/min) 176.00 185.00
Laps 197.00 197.00
Average minutes per Lap 56.85 54.09
Cutting time (min) 11,199.86 10,655.00
Amount of Empties 311.11 295.97
Addition Emptying Time 6,004.37 5,712.26
Total Field Time (min) 17,204.23 17,912.69
Total Time (min) 18,749.65 19,458.12
(hour) 312.49 324.30
Total Miles 379.01 379.01
North Field Calculations – 193 Rods

25. North Field Calculations (con’t)
DIY Using Itinerant
3 Truck rental per day 10763.69
2 Truck rental per mile 257.73
1 Truck rental per mile 68.22
3 Driver 16312.20 Total Cost per Hour 145988.42
1 Harvester 8437.35 Total Cost per Mile 189.51
Total 35839.20 Total 146177.93

26. North Field DIY Using Itinerant
First 2 passes speed 80.00 80.00
laps 2.00 2.00
Minutes per Lap 515.99 515.99
Cutting Time 1,031.98 1,031.98
Amount of Empties 28.67 28.67
Addition Emptying Time 553.26 553.26
Total field time (min) 1,585.24 1,585.24
Speed (ft/min) 176.00 185.00
Laps 197.00 197.00
Average minutes per Lap 59.80 56.89
Cutting time (min) 11,780.07 11,206.99
Amount of Empties 327.22 311.31
Addition Emptying Time 6,315.43 6,008.19
Total Field Time (min) 18,095.50 18,800.42
Total Time (min) 19,680.74 20,385.66
(hour) 328.01 339.76
Total Miles 398.65 398.65
North Field Calculations – 198 Rods

27. North Field Calculations (con’t)
DIY Using Itinerant
3 Truck rental per day 11298.20
2 Truck rental per mile 271.08
1 Truck rental per mile 71.76
3 Driver 17122.24 Total Cost per Hour 166143.09
1 Harvester 8856.33 Total Cost per Mile 199.32
Total 37619.61 Total 166342.42

28. Time (hour) Miles
Area 1 13.95 13.90
Area 2 34.42 37.41
Area 3 28.77 31.65
Area 4 82.26 91.51
Total 159.40 174.47
Total Work Days 11.81
Penny Hill Calculation
DIY Cost Using Itinerant
3 Truck rental per day 5490.51
2 Truck rental per mile 118.64
1 Truck rental per mile 31.40
3 Driver 8320.77 Total Cost per Hour 5773.89
1 Harvester 4303.85 Total Cost per Mile 87.24
Total 18265.17 Total 5861.12