mr. alberts harvesting decision - team 3

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

Agenda

Introduction

Assumptions

Background

Analysis

Conclusions

Recommendations

Ideas for Future Research

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

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

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

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

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

Framework Analysis Conclusions Recommendations

Overview of Fields

South Field North Field Penny Hill

~731 acres ~704 acres ~336 acres

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

Co

st

Year

Annual Worth Analysis

DIY Total

Itinerant Total

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

Co

st

Yearly Difference

Difference from Itinerant and Independent AW

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

Co

st

Present Worth Cost Analysis

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 autonomyHaving to train new

employees

No investment in

equipmentMay arrive late

Branding around valuesResearch equipment to

buyNo training necessary

Not invested in business

outcome

Framework Analysis Conclusions Recommendations

Recommendation

Hire Independent

Crew

Long-TermInvestment

BetrayalUnforeseen

Circumstances

Framework Analysis Conclusions Recommendations

One Year Roadmap

Recruit and find qualified candidates

Prep for harvesting

season

Harvesting season

Follow-up to ensure

satisfaction

Framework Analysis Conclusions Recommendations

Risks and Mitigants

Down Season for Crops

• Otherbusiness endeavors (farmer’s market, restaurant)

• Sell futurecontracts 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

NaturalDisaster

• Crop insurance

• In case of drought, research methods for effective water use

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

Questions

• 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

Appendix

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

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

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

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

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

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

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

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

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