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


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


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


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


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


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


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


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


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


Recommendation

Hire Independent

Crew

Long-TermInvestment

BetrayalUnforeseen

Circumstances


One Year Roadmap

Recruit and find qualified candidates

Prep for harvesting

season

Harvesting season

Follow-up to ensure

satisfaction


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




• 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


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


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




(hour) 291.98 277.88


South Field Calculations (con’t )


3 Truck rental per day 10,057.16



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


Cutting Time 1,006.07 1,006.07


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




Total Time (min) 18,749.65 19,458.12

(hour) 312.49 324.30


North Field Calculations – 193 Rods

North Field Calculations (con’t)

DIY Using Itinerant

3 Truck rental per day 10763.69



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


Cutting Time 1,031.98 1,031.98


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




Total Time (min) 19,680.74 20,385.66

(hour) 328.01 339.76


North Field Calculations – 198 Rods

North Field Calculations (con’t)

DIY Using Itinerant






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







Total 18265.17 Total 5861.12

Engineering

Mr. Alberts Harvesting Decision - Team 3