'"•"iO Division of Agricultural S c I • n < t • UNIVERSITY OF CALIFORNIA HO l6i At, AN ANALYSIS OF COSTS OF PROCESSING STRAWBERRIES FOR FREEZING Carleton C. Dennis UNIVERSITY OF CALIFORNIA DAVIS OCT lo 1958 L < >-} i i i\ Y\ Y CALIFORNIA AGRICULTURAL EXPERIMENT STATION GIANNINI FOUNDATION OF AGRICULTURAL ECONOMICS Mimeographed Report No. 210 July 1958 i FOREWORD AND ACKNOWLEDGMENTS This is the second in a series of research reports on the frozen decidu- ous fruit and vegetable industry. The first report dealt xfith a survey of the industry on the Pacific Coast. Future reports will include additional studies of processing plant costs and efficiency, freezing costs, demand and price relationships of frozen foods, and interregional competition in the industry. These studies are being made under a regional research project by the Experiment Stations of the states of California, Oregon, and Washington and the Territory of Hawaii in cooperation with the Agricultural Marketing Service, U. S. Department of Agriculture. This report concerns costs and efficiency in plants processing straw- berries for freezing while a future report will cover the freezing operation. It is based on studies of operations of California frozen fruit and vegetable plants made in 1956 and 1957* The author is indebted to Robert H. Reed, Agricultural Marketing Service, U. S. Department of Agriculture, for important contributions in securing the cooperation of the plants studied and in collection of the basic data of this study. Special credit is due to L. L. Sammet, Specialist in the Experiment Station, University of California, who was consulted frequently in planning the study and in the analysis and who has substantially influenced the preparation of this report. »jar>oO ol ft 21/0 ■ ... [oldoslloo n± brra boibirfa adnfilq artt 10 no tJ-sioqooo tilycnoo susvf orfv: .eimolxlsO lo y.txEietrlrfJ .nold-e TABLE OF CONTENTS Page FOREWORD AND ACKNOWLEDGMENTS 1 INTRODUCTION . . . . c 1 Source of Data o ........ 2 Labor Standards • • Equipment • 3 Total Cost Estimation ••••• • •* PLANT ORGANIZATION AND COST COMPONENTS h STAGE ANALYSES AND INDIRECT COST COMPONENTS 7 Dumping • • / Quality Sort and Size Grade ...... 1U Slicing and Sugar System ......... ...... lo Slicing and Sugar Mixing J° Sugar Supply ••••• 20 Total Cost of the Slicing and Sugar System 23 Filling 25 Cartons, 10 and 16 Ounce • • • Tins, 6| Pound ••«.•• *9 Tins, 30 Pound 31 Casing ?° Receiving, Checkout, and In-Plant Transportation W Estimating Fork-Lift Truck Requirements U3 Miscellaneous Equipment and Materials • U5 Superintendence and Miscellaneous Labor ....... ho Administration and Office Costs 50 Building Costs • . PLANT COSTS 8 Simplifications •• •• •• 5j= Plant Cost Calculations ^ Total Plant Costs and Effect of Cost-Determinant Variation ..... 5c Products Packed and Plant Size •• g Length of Operating Season ... 5c Strawberry Quality •••• j* Underutilization of Plant Capacity ..... W Production in Multiproduct Plants ...... ... 6] SUMMARY 68 •i * ' * "* * p ** ». • ft, # • • ♦ • • ** «. ♦» •l • . ft. ^ *• ** •l * •» * *# * Hi * «c H A. 4> 4r *l »■ * ^ ** 9, *» % + '- ; *■ \ ♦i * \ K * % % • • % * % - ■ ■ iXEl % % * * % % "S \ % % % ft % % % * • <% \ V % V 1 • % K \ « i - AN ANALYSIS OF COSTS OF PROCESSING STRAWBFRRI^S FOR FREEZING by Carleton C. Dennis^ INTRODUCTION The Pacific Coast states are the major source of the national frozen straw- berry supply, a position which has been achieved by very rapid growth in re- cent years. In the ten-year period, 191*6-1956, total annual production of frozen strawberries in the western region of the United States increased from 78,000,000 to 255*000,000 pounds. The 19k6 output of this region represented only about 1+8 per cent of the national frozen strawberry supply while the 1956 output was about 82 per cent. This rapid growth in frozen strawberry produc- tion in certain areas has required corresponding expansion in processing fa- cilities e— ^ During this period of rapid expansion, the freezing industry has adapted many existing cannery techniques but also has developed processing and handling methods peculiar to its own needs. Fairly standardized techniques are used for many of the operations performed. For some operations, however, there are several methods currently in use, and for these the plant manager or owner con- templating the construction of a new plant or change in an existing plant needs information as to relative costs • This report is intended to supply this kind of information as well as an over-all description of the strawberry processing operation and an estimate of processing costs under California conditions. It is also expected to furnish a basis for comparing processing costs in different regions of the country and in this way contribute to future studies of the relative advantage of strawberry production in these regions. 1/ Cooperative Agent of the Experiment Station, University of California, andTthe Agricultural Marketing Service, U. So Department of Agriculture. 2/ The term "processing" is used in this report to include all the activi- ties involved from receiving the raw product at a freezing plant to moving the packaged, unfrozen product to the plant exit. It does not include freezing. 2. Source of Data Data on labor and equipment utilization and costs were obtained through time and production studies, equipment inventories, processor interviews, and accounting records in seven California strawberry processing plants in 1956 and 1957. In these plants capacity output rates range from approximately 7,500 to 25,000 pounds per operating hour. Similar data were obtained in ten plants processing Lima beans for freezing, and this provided additional infor- mation for certain cost components. Data concerning equipment costs and opera- tion were also obtained from several major equipment manufacturers, custom manufacturers, and contractors. Labor Standards Labor standards were developed for each of the jobs performed in straw- berry processing plants as a basis for calculation of labor requirements when using each of the available techniques.-' These standards are considered to be the continuous output rate which a reasonably efficient worker should attain. They do not represent the average or the best output achieved, but a check against actual labor utilization indicates that they do lie between these extremes. Time and production studies were used wherever this technique was appli- cable to determine the amount of working time required to perform each of the jobs done in strawberry processing. An allowance of 15 per cent of total work time was then made for nonproductive time such as unavoidable delay, rest periods, and personal time. This gave the total per unit time from which units of output per hour were computed. For example, it was found that 0.0971 minute was required to set an empty strawberry crate from a conveyor to a pallet, including miscellaneous activities required to perform this job such as obtaining and placing empty pallets. With the allowance for nonproductive time, the total time per crate is 0.11U2 minute. This figure, divided into 60 minutes, gives a work standard of 526 crates per hour. 1/ These standards with descriptions of the jobs performed are listed in Appendix Table A« 3. Accounting record data were utilized to determine job standards in those cases, such as sorter and utility labor, where time and production studies are not well adapted. As with the data from time and production studies, analysis of the accounting record data was designed to provide estimates of potential performance rates at levels of above average but less than the maximum achieved rates ^ The number of workers required for each job when operating at various out- put rates was then determined on the bssis of one worker for each multiple and additional fraction of the applicable job standard. The current wage rates (1958) of the Collective Bargaining Agreement between the Frozen Food Operators and the California State Council of Cannery Unions were applied to these re- quirements to determine hourly labor cost with respect to method used and out- put capacity. Equipment Equipment output capacities were estimated from plant observations, esti- mates of managers, and specifications of manufacturers. Installed equipment replacement costs were based on manufacturer quotations and contractor instal- lation estimates which include electricalwork and connection to primary water 2/ lines.—' i<\lherever there were price differences in regard to a given type of equipment, the lowest price of equipment capable of accomplishing the desired objective with comparable efficiency was used. This is consistent with the objective of the study— to determine the lowest cost methods of processing strawberries for freezing— even though the higher price equipment may have certain advantages not possessed by the less expensive equipment. With each available technique, the lowest cost combination of equipment needed in each stage at given output rates was calculated on the basis of esti- mated equipment output capacities and installed prices. 1/ For example, see page lit for the use of such data in developing produc- tion standard for quality sorting. 2/ These costs were obtained in 1957 but are applicable to the 1958 process- ing season since they had not changed significantly through the first half of that year. "■ u. Total Cost Estimation Using the performance standards described above, labor and equipment re- quirements in relation to output rate were determined for each technique avail- able to perform the operations required in strawberry processing. Appropriate wages, equipment replacement, and variable operating costs were applied to these physical requirements to determine, for each technique, total costs of operation. With such estimates, comparison of costs and selection of the most efficient techniques for various sizes of plants and lengths of season can be made. The plant was divided into several independent parts to simplify the cost analysis, and total plant costs are the combination of the costs of these parts. These costs, being built on labor and equipment performance standards, are not the actual costs of one or a sample of plants but represent costs of "synthesized," efficient plantSo They represent cost levels that are attain- able in well-organized, efficiently operated plants. PLANT ORGANIZATION AND COST COMPONENTS Several operations, as indicated by the process flow diagram (Figure 1) and a representative processing plant floor plan (Figure 2), are involved in processing strawberries for freezing. When the berries are received at the plant, they are first weighed and usually set aside to await processing. They are transferred from this temporary storage to a dump station, dumped, Trashed, and conveyed over quality inspection belts where they are manually sorted to remove debris and defective berries. The graded berries then go through a cable or sieve sizer. Following the sizing operation, different operations may be performed— depending upon the final product. The berries may be packed either whole or sliced. Whole berries are directed from the sizer to the package-filling operation. Berries to be sliced are conveyed to the slicer, mixed with sugar, and then moved to the package fillers. After filling, 30-pound containers of either whole or sliced berries are placed on pallets to be taken to the freezer while smaller containers are placed in corrugated paper cases before palletiz- ing. These activities can, for convenience of analysis, be grouped into several production stages— each of which may consist of one or a group of closely re- lated activities. These stages are selected to allow independent cost analysis ■ l<| cstsisqc 1 "^JJrt3ioi5'i9 ^be sice .3*3 o^/jEs^* j2X:s£cI< I ■ * 1 Receive Load truck D Temporary storage ^^Transportation Dump Wash and stack crates Quality sort and size grade. Dispose rots and refuse Slice and add sugar Sort and fill sortouts Fill, 30 pound (whole) Fill, 16 oz. to 6^2 lb. (whole) 'Fill, 10 oz. to 6'/2 lb. (sliced) Fill, 30 pound (sliced) Case - in and palletize Case- in and palletize Clerical tally Freeze Figure 1. Process Flow Diagram for Strawberry Processing Plants, California, 1958 6. PACKING MATERIALS STORAGE DOORWAY TEMPORARY PRODUCT STORAGE TOOL ROOM OFFICE LEGEND 1. Pallet conveyor 2. Dump platform 3. Crate conveyor 4. Dumper 5. Empty crate conveyor and washer 6. Berry conveyor, dumper to shaker-washer 7. Shaker-washer 8. Inspection belt, inclined with sorting platform 9. Sortout flume 10. Dewatering belt 1 1 . Sortout hopper 12. Scale 13. Conveyor, steel roller 14. Berry conveyor, inspection belt to siie grader 15. Size grader 16. Conveyor, whole berry 17. Whole berry hopper 18. Berry conveyor, size grader to slicer 19. Slicer and sugar mixer 20. Holding tank, sliced berry 21. Carton filler, 10 and 16 ounce 22. Carton closer, 10 and 16 ounce 23. Conveyor, carton 24. Carton caser, 10 and 16 ounce 25. Case conveyor 26. Case sealer and compressor 27. Filler, 6Hi-pound tin 28. Closer, 6%-pound tin 29. Conveyor, 6!4-pound tin 30. Conveyor, skate, (case-in) Figure 2. Floor Plan for a Representative Medium Size Strawberry Processing Plant. California 1958 7. of each segment of the total plant. Within some of the stages, there are alter- native methods or techniques which can be used to perform a given operation. This means that there are several ways of organizing a plant. For each size of plant and length of season, there is a least-cost technique within each stage and a least-cost organization utilizing a combination of least-cost stages. The plant stages, together with several categories of indirect costs not associated with a specific stage, form plant cost components. The cost compo- nents considered in this study are (1) dumping, (2) quality sorting and size grading, (3) slicing and the sugar system, (U) container filling, (5) casing, (6) receiving, checkout, and in-plant transportation of products and materials, (7) miscellaneous equipment and materials, (8) supervisory and miscellaneous labor, (9) office and administrative expense, and (10) building costs. STAGE ANALYSES AND INDIRECT COST COMPONENTS Dumping In the dumping stage field crates are taken from an adjacent pallet and dumped, the crates and berries are washed, and the crates res tacked on a pallet for return to the producer. Two methods, differing only in the dumping phase, were observed in the plants studied. Workplace arrangements for these methods, called "manual" and "mechanical" to describe the actual dump operation, are shown in Figures 3 and U. With the manual dump the crate-dump worker takes a crate from the palletj turns and places the crate against a bar on the dump hopper; dumps the crate slowly; completing the dump by tapping the inverted crate on a bar over the hopper; and then places the crate on the crate-washer conveyor. In a plant with mechanized dumping, a set-on man transfers the crates singly from the pallet to a conveyor which leads to the mechanical dumper. The crate passes though the dumper and onto the crate-washer conveyor. The berries are dumped onto a wide conveyor belt which carries them to the shaker-washers. Shear gates remove the berries from the belt, dividing them among the inspection lines as desired. Several alternative mechanical dumpers and distribution systems have been discussed with plant operators and equipment manufacturers. The mechanical [OS Y,JL\ . aftcqfifl rsr.sia .;. ■'F.1130ZX" 1 one Tjioer bisque .ed£Oo gniMxtfd* (Q£) bne f-ns crallGq Jn9o43" ox anxiaYiib t 3bcrii9m owT .i< ori-tem -vdSfif 10I airretnsinsns eosIqriioK •b^tbu.ta a,ti piK ,jjoitBieqo qm»b L&uioa sni sdiioasb oj "3 'ollsq sri.t rrail s^jkio euli tQffiui is^'iow IO stffiU ■ •sett no sieio grit aeaslo ns: 1 ttm • Hi. Quality Sort and Size Grade There are two basic equipment arrangements in this stage. In one of these, size grading precedes the quality sort while in the other the order is reversed. Since this study detected no cost advantage for either method, only the cost of the quality sort prior to size grading, the more common method, is presented here. Berries are deposited on quality-sort belts from the shaker-washers of the dumping stage. These belts, with few exceptions, are 30 inches wide and 2£ to 30 feet long with an incline of 3 to 5 feet. Workers stationed along each side of the belt discard rots (overripe berries and those otherwise unfit for freezing) and divert sortouts (primarily underripe berries but including other minor defects) to the sort out filling station. The sorted berries move either directly from the sorting belt into a cable or sieve size grader or are conveyed or flumed to the grader where they can be divided into three or more sizes. From the grader they enter the slicing and sugar stage or the whole berry filling stage. Quality-sort labor is the major cost of this stage. The amount of sorting labor required depends upon both sorting rate and per cent of the raw product that must be removed from the inspection belt. Berry quality varies throughout the season and from year to year, necessitating adjustment of the number of sorters used for most efficient operation. Since sorting labor represents a large share of the total cost of processing strawberries, a detailed analysis was made to determine the number of sorters required under various conditions. Simply observing good fruit with the objective of finding and removing defective fruit which may be present requires effort which cannot be measured through ordinary time and production studies. For this reason plant record data, supplemented by studies of labor usage and total quantities of strawberries dumped to the inspection belts and removed as sortouts and rots, were utilized to obtain sorting labor standards. An average of the amount of labor actually used, including the most inefficient as well as the efficient performances, would represent only an average output rather than a reasonably efficient performance which the labor production standards of this study are designed to represent. For this reason the least efficient half of the performances in each plant was discarded before calculating the job standard. :■ ■ - ■ ' -' ' ' - ' . " • . . . .. • : ■ ...... " ■ •• ' i ■■ ■ >-i4. ■ ., ■ • If '■■ 15. It was found that sorting labor requirements vary somewhat with grade of berries being packed, but that sorting for Grade A, sliced,, and Grade B, whole, are of approximately equal difficulty and, for given rates of product flow, require the same numbers of sorters. Since most of the berries frozen are of these grades, data presented in this report on the cost of sorting relate primarily to them. Figure 6 shows the number of workers required with respect to quantity of berries dumped and per cent of those berries which must be removed from the inspection belt— sortouts and rots — to pack the above grades. From this figure it can be found, for instance, that when 5,000 pounds per hour are dumped to the inspection belt and 15 per cent of the berries must be removed by sorting labor, 9o8 — in round numbers 10 — sorters are required. Likewise, where 5>000 pounds are dumped and the percentage of sortouts and rots is 10, 9 sorters are required; or if the percentage is 20, 12 sorters are needed. While devised to indicate sorting labor requirements for Grade A. sliced or Grade B whole berries, readings from Figure 6 can be adjusted to give sorting labor requirements of other grades. To obtain labor requirements for Grade A whole berries, it is necessary to add one additional hour of sorting labor to the amounts read from the chart for every 100 pounds of sortouts and rots removed from the inspection belt. Six-tenths hour less of sorter labor is required for every 100 pounds of sortouts and rots removed from the inspection belt when packing Grade B, sliced. The equipment requirements of this stage consist of quality-sort belts, conveyors, and size graders. To determine capacity requirements of equip- ment to be used in conjunction with inspection belts— both in this and other stages — it was necessary to determine inspection belt capacity. This was done as a part of the sorting labor study. The average quantity run per hour during this study was found to be h,200 pounds. With approximately 65 per cent of the observations, the rates ranged between 3,000 and 6,000 pounds per hour, and with 70 per cent of the observations, the observed rate was less than 5,000 pounds. Since most of the observations were at or just below 5,000 pounds per hour, this is taken as a reasonable estimate of belt capacity. Table 2 gives the information needed to determine total season costs of this stage. The upper section of the table gives equipment replacement costs for plants having one to five inspection belts. The lower section shows the annual fixed charge and hourly variable charge for equipment and the labor charge at several percentages of sortouts plus rots. IB .! U > 1 10 20 30 40 50 Hundred pounds of berries sorted (total) per hour Figure 6. Number of Sorters Required Per Inspection Belt with Respect to Total Quantity of Berries Sorted and Per Cent of Berries Removed from the Belt by Inspection Labor when Packing Grade A, Sliced, or Grade B Whole Strawberries & California, 1958 a/ To estimate sorter requirements for packing Grade A whole berries, add one sorter to the reading of this chart for each 100 pounds of rots and sortouts (100 pounds sorted times per cent removed). To estimate for Grade B sliced berries, subtract six tenths sorter for each 100 pounds of rots and sortouts* 17. TABLE 2 Equipment Total, Annual Fixed, and Hourly Variable Costs at Selected Capacity Operating Rates and Hourly Labor Costs at Selected Operating Rates and Percentages of Sortouts Plus Rots California, 1958 Number of a/ Equipment replacement costs—' quality sort bp! Raw product Quality sort. / belt^ Conveyor (sort belt to grader) Size grader Sort out section Total equipment cost pouncis per hour dollars _ 1 5,000 2,050 0 / 1, 310 1,018 4,378 2 10,000 4,100 565 i,3io 1,138 7,113 3 15,000 6,150 712 2,245 1,259 10,366 4 20,000 8,200 859 2,245 1,380 12,684 5 25,000 10,250 1,277 3, 555 1,500 16,582 Equipment e7 Hourly sorting labor cost-' at Annual Hourly various levels of sortouts plus rots fixed j charge—' variable charge—' Per cent 5 10 15 20 dollars 1 5,000 620 .29 12.17 15.65 17.38 20.86 2 10,000 980 .49 24.34 31.29 34.77 41.72 3 15,000 1,433 .71 36.51 k6.9k 52.15 62.58 h 20,000 1,7*5 .87 48.68 62.58 69.54 83.44 5 25,000 2,302 1.1* 60. 84 78.23 86.92 104.31 a/ See Appendix Table B for itemized list of equipment replacement costs and annual fixed charges. b/ Includes fluorescent lighting over belts. c/ This equipment not required in a one-belt plant. d/ Includes charges for power and, variable repairs and maintenance. Electric power calculated at 2.5 cents per hour per motor horsepower. Variable repairs and maintenance calculated at 0.5 per cent of replacement cost of equipment per 100 operating hours. e/ Calculated at vasce rate of $1,64 per hour plus 6 fer cent to cover Social Security, State Unemployment, and paid holidays. 18. With the data on annual fixed costs and variable costs per hour given in Table 2, total season costs can be computed. Such cost estimates, supplemented with similar calculations for berry-input rates lying between belt capacity rates, are represented graphically in Figure 7 by the lightly drawn, broken lines which show the relation of total cost to rate of berry input with three different lengths of season and four different percentages of berry removal by the sorters. As with the dumping stage, "planning costs" for given lengths of season and percentages of berry removal are shown by the heavy dashed lines. Each such line shows, for the hours operated per season and percentage of berry removal specified* season total costs with efficient operation in relation to berry-input rate. The cost relationships given in Figure 7 can be conveniently expressed in a "planning equation" as follows: TSC «= 3U3 + 190(H) + 85.6(1) + 186.8(H)(1) + 10.1*3 (H) (I) (Q) where TSC « Total season cost (in dollars) of the quality-sort and size-grade stage H = Hundred hours of quality-sort and size-grade operation per year I «= Thousand pounds per hour of quality-sort and size-grade capacity Q = Per cent of berries removed from inspection belt —pounds removed divided by pounds dumped (100) • Slicing and Sugar System The link between the sorting and grading stage and the sliced berry filling stage consists of moving the berries between stages, slicing them, and adding and mixing sugar with the berries. Only one portion of this stage, supply of sugar to the metering and mixing equipment, is affected by variation in method. For this reason the costs of sugar supply and of the remainder of the stage are divided and presented separately here. Slicing and Sugar Mixing This is a mechanical operation requiring no direct labor. The berries are deposited on a conveyor after grading and move to the slicer. Automatic sugar metering and mixing equipment then combines berries and sugar in the desired proportion and the berries enter the filling stage. This equipment • •- •• ' - ' ■ • '■ ' - ; ; " ■ ■ MS.'". ' • ' - ■ • ' ' ■ ' ■■ ■ t ■ %4 I ■ • • • ■■- • - : ' • i "... . :• . . .'• - . ' - H ' • - ■ • *' VI H ■ . '" ' ffJ •••••• ■ "• ■>■■■ ■ ■ ■ ■ tm " ' fa - ■ . . - • v • - • • • ■•• •• ■ io i • . '-- rsq ■'■ ' . a) ' rj« r? ;•■ 5 v . .: • ' \ • ... j . • ' ' ' •• -- : •■ ' ! - ■ • . • •) .A: 1 ' , ■ .V. I i : ': 19. Hourly strawberry input rate, thousand pounds Figure 7. Total Annual Costs of the Quality-Sort and Size-Grade Stage of Plants Processing Strawberries for Freezing with Respect to Hourly Strawberry-Input Rate, Berry Quality, and Length of Operating Season when Packing Grade A, Sliced, or Grade B Whole Strawberries,^ California, 19$Q &/ To estimate quality-sort and size-grade costs for packing Grade A whole strawberries, add $17. UO to the reading of this chart for each 1,000 pounds of rots and sort outs removed from the inspection belt (hourly input rate times hours operated annually times per cent removed). To estimate for Grade B sliced straw- berries, subtract $10.50 for each 1,000 pounds of rots and sortouts removed. 20 must be of sufficient capacity to handle the maximum output of the plant as determined by inspection belt capacity and minimum berry removal, resulting in an unavoidable undercapacity operation of berry slicing and sugar mixing equipment during most of the season. There are many alternatives in equip- ment and equipment arrangements which would satisfy the requirements of this operation. Thus, while there would be a best arrangement for each plant, there is no single arrangement which would be best for all plants. The differences are relatively small, however, and the equipment chosen is a representative combination that gives a practical basis for cost estimation. The equipment units required and their replacement, annual fixed, and hourly variable costs are given for plants of different berry-input capacity rates in Table 3. Sugar Supply There are two methods of supplying sugar to the metering and mixing equipment. The first of these requires practically no equipment but uses a large amount of labor and is referred to here as the "manual" method. The other is almost completely automatic, requiring only a nominal amount of labor so is called the "mechanical" method. In the manual method, bagged sugar is kept in supply at the sugar station by fork-lift truck which delivers approximately 25 bags per trip. The bagged sugar is then manually dumped into a hopper over the sugar meter. This involves obtaining the bags of sugar from a near-by pallet, opening them, emptying the sugar into a hopper, and folding and stacking the empty bag. A labor standard of l,#o pounds of sugar per man-hour applies to this job. The mechanical method uses bulk sugar which is delivered to the plant by tank truck and placed in a silo or storage bin. It is taken from this bin by gravity and/or power conveyor and moved as needed to point of use. Table h shows the replacement, fixed, and variable costs of these sugar supply methods for five plant sizes as determined by number of quality inspection belts. Calculations for the manual system in this table are based on the most commonly used berry-sugar ratio— h to 1— and 5 per cent of cull berries (rots). A smaller sugar ratio or greater per cent of culls would decrease the variable cost of the manual system operation while more sugar or less culls would increase this cost. Such variations, however, do • ■ - ■ •- • • i . ' ' v '. ' ■ I Km . : ■ ■ ■ ;:• ■ , • •••••• ■ - i .. •.■ . . t . /-" • • i} l0 H£ ■ : . .... ■: %, .: ■ \ n 1 ■ ■ ■■ .. ••; ■ - H ■ ■ - J , .. . • : • • . ■ ■ ■ f. , ... . . ■ • • • ■ • ■ ' ' ' • " ■ ' : • j • tftgtl • 21. TABLE 3 Replacement, Annual Fixed, and Hourly Variable Equipment Costs for Slicing and Sugar Mixing with Respect to Plant-Input Capacity in Plants Processing Strawberries for Freezing, California, 1953 PI ant -input capacity Equipment replacement COstSr Annual fixed j charge-^ Hourly variable cogtjj/ Conveyor, grader to slicer Slicer Mixer with sugar feed and control pounds jper hour dollars 5,000 560 910 1,880 53k 0.21 10,000 560 910 2,380 617 0.23 15,000 560 910 2,880 699 0.30 20,000 1,120 1,820 U,760 1,233 0.17 25,000 1,120 1,820 5,260 1,316 0.50 a/ See Appendix Table B for itemized list of equipment replacement costs and annual fixed charges. b/ Includes charges for power and variable repairs and maintenance. Electri- cal power estimated at 2.5 cents per horsepower hour. Variable repairs and maintenance estimated at 0.5 per cent of replacement cost per 100 operating hours. 22. TABLE h Total Season Costs of the Sugar Supply System with Respect to Plant-Input Capacity in Plants Processing Strawberries for Freezing, California, 1958 Number of q uaTity Insp ection belts Item 11 * 1 3 U \ ... 5 pounds Capacity (berry input per hour) Sugar supplied per hour^/ 5,000 1,188 10,000 2,375 15,000 3,563 20,000 U,75o 25,000 5,938 Manual system dollars i Equipment replacement cost ; Annual fixed chargeb/ , Variable repairs and mainte- nance per 100 hours£/ Labor cost per 100 hours.XXcfe sno^i; ppd gninnsXq *tari*o ££• ni TABLE 5 Labor Requirements, Hourly Variable Costs, and Equipment Replacement and Annual Fixed Charge for Filling 10-0unce Cartons, 24 Cartons Per Case, with Respect to Plant-Output Capacity in Plants Processing Strawberries for Freezing, California, 1958 Output capacity (cases per hour) Workers required^/ Feed , cartons 0 -' Operate equip-, ment^ Supply , cartonsS' Variable costs per hour Labor?/ Power and repair! tj Totalfi/ Bag stand Equipment replacement costs and annual fixed chargefe/ Bag Carton Carton Total Annual unloader conveyors conveyors replace- carton with car- ( filler ( seamer to ment closer ton run Filler to seamer) "case in") cost rental number dollars Without mechanical carton- feeding aids 100 1 1 X 5-55 0.29 5.81+ 50 1+,010 200 2 1 1 7.29 0.29 7.58 50 1+,010 300 2 l 1 7.29 0.55 7.81+ 100 7,120 71+5 1+00 3 2 1 10.91+ 0.55 11.1+9 100 7,120 71+5 500 3 2 ~~* 1 10.91+ 0.81+ II.78 150 11,130 71+5 600 2 1 12.68 0.81+ 13.52 150 11,130 7^5 700 4 2 1 12.68 1.10 13.78 200 ll+,2l+0 1,1+90 800 5 3 2 18.23 1.10 19.33 200 ll+,2l+0 18,250 1,1+90 900 5 3 2 18.23 1.36 19-59 250 1,1+90 1,000 6 3 2 19.97 1.36 21.33 250 18,250 21,360 1,1+90 1,100 6 3 2 19.97 1.62 21.59 300 2,235 1,200 7 4 2 23.62 1.62 25.21+ 300 21,360 2,235 1,300 8 4 2 25.36 1.91+ 27.30 350 25,370 2,235 1,1*00 8 4 2 25.36 1.91+ 27.30 350 25,370 2,235 2,980 1,500 9 k 2 27.09 2.20 29.29 1+00 28,1+80 7&5 765 765 765 1,530 1,530 1,530 1,530 2,295 2,295 2,295 2,295 3,060 3,060 3,060 l+,825 M25 8,730 8,730 13,555 13,555 17,1+60 17,1+60 22,285 22,285 26,190 26,190 31,015 31,015 34,920 950 950 1,900 1,900 2,650 2,650 3,800 3,800 4,750 ^,750 5,700 5,700 6,650 6,650 7,600 With mechanical carton- feeding aids 100 1 1 1 5-55 0.37 5.92 50 1,380 4,010 765 6,205 950 200 1 1 1 5-55 0.37 5.92 50 1,3&0 4,010 765 6,205 950 300 2 1 1 7-29 O.63 7.92 50 1,380 7,120 745 765 10,060 1,900 1+00 2 1 1 7.29 0.63 7.92 50 1,380 7,120 745 765 10,060 16,265 1,900 500 2 1 1 7.29 1.00 8.29 100 2,760 11,130 745 1,530 2,850 600 3 2 1 10.94 1.00 11.94 100 2,760 11,130 745 1,530 16,265 2,850 700 3 2 1 10.94 1.26 12.20 100 2,760 14,240 1,490 1,530 20,120 3,800 800 3 2 2 12.85 1.26 14.11 100 2,760 14,240 1,490 1,530 20,120 3,800 900 1+ 2 2 Hv.59 1.60 16.19 150 4,140 18,250 1,490 2,295 26,325 ^,750 1,000 1+ 2 2 1^.59 1.60 16.19 150 4,140 18,250 1,490 2,295 26,325 4,750 1,100 1+ 3 2 16.49 1.86 18.35 150 4,140 21,360 2,235 2,295 30,180 5,700 1,200 5 3 2 18.23 1.86 20.09 150 4,140 21,360 2,235 2,295 30,180 5,700 6,650 1,300 5 3 2 18.23 2.25 20.46 200 5,520 25,370 2,235 3,060 36,385 1,1+00 5 3 2 18.23 2.25 20.48 200 5,520 25,370 2,235 2,980 3,060 36,385 6,650 1,500 6 3 2 19.97 2.51 22.48 200 5,520 28,480 3,060 40,240 7,600 a/ Labor standards (cases per hour): feed cartons, without mechanical aids — 185; feed cartons, with mechanical aids--280; operate equipment — one worker per filling line; supply cartons— 750. b/ See Appendix Table B for list of equipment replacement costs and annual fixed charges, c/ Hourly wage, $1.64. d/ Hourly wage, $1.80. e/ Base wage plus 6 per cent to cover F.I.C.A., State Unemployment, and paid holidays. f/ Electric power estimated at 2.5 cents per motor horsepower. Repair estimated at 0.5 per cent of replacement cost of equipment per 100 operating hours. jg/ Includes labor, power, and variable repairs. h/ The annu a l fixed charge in this table includes carton closer rental. 1 I 1 ' I ' I I I I I I I I 500 Hour Season 50 40 30 20 10 "1 i rn | — r— i — i — i — r— i — i — | — r 1000 Hour Season Without mechanical carton feeding aids With mechanical carton feeding aids Planning costs 1 1 1 1 1 ' 1 I 500 1000 ''I'll''' " i i i I — i — i — i — i — i — r 2000 Hour Season 500 1000 Output rate, cases per hour 1 1 1 1 I 1 1 1 I 1 i i i ■ I 500 1000 29. is not presented here. However, the following planning cost equation has been developed from an analysis of 16-ounce carton filling similar to that given for 10-ounce cartons. TSC - m + 332(h) + 367(P) + 55.7(h) (P) where TSC ■ Total season cost (in dollars) of filling 16-ounce cartons h ■ Hundred hours per year of 16-ounce carton filling P ■ Thousand pounds per hour of 16-ounce carton filling capacity .1/ Although the costs per case are nearly the same for 16-ounce as for 10- ounce cartons, they differ substantially on a poundage basis due to difference in weight per case. For instance, if a plant were to fill 10-ounce cartons at a rate of 10,000 pounds per hour for 1,200 hours per year, its annual filling costs would be: TSC = 1*88 + 335(12) + 587(10) + 83.3(12) (10) - f 20,37k, and if packed under the same conditions with the exception of using 16-ounce rather than 10-ounce cartons, its costs would be: TSC = U88 + 332(12) + 367(10) + 55.7(12) (10) « $H* t 826. Tins, 6? Pound Of the containers considered in this report, 6§-pound tins represent the smallest proportion of the California strawberry pack. The same filling method, with one exception, was used for this container in all of the plants studied. Since the exception was a comparatively high-cost operation at all output rates, and to avoid disclosure of individual plant costs, only the standard method is presented here. This is similar to method A of the 10- cunce and 16-ounce cartons. The tins are placed usually two at a time on a short conveyor to the filler where they are automatically filled and trans- ferred to the closer. From the closer they are either conveyed or roll down an inclined chute to the casing station. One closer is used in conjunction with each filler, and two workers are required — one to feed tins to the filler and the other to operate the equipment. Filler capacity is estimated at 200 cases of six tins each per hour. Table 6 gives the crew requirements, variable costs, and fixed charges for output rates of 50 to 300 cases per hour. Total annual filling costs, 1/ See footnote on p. 26 • o 1 j ISi'ao 6 " ©rasa ?i If '>dTfOO"81 V TABLE 6 Labor Requirements, Hourly Variable Costs, and Equipment Replacement and Annual Fixed Charge for Filling 6|-Pound Tins, 6 Tins Per Case, with Respect to Plant-Output Capacity in Plants Processing Strawberries for Freezing, California, 1958 Output Workers required*/ Variable costs per hour Equipment replacement costs and annual fixed cnargefiy capacity (cases per hour) Feed, tins£' Operate equip-, ment§/ Labor®/ Power and , repair^' ToteLlV Filler Closer Conveyor (seamer to "case in") Total investment Annual fixed charge number dollars 50 100 150 200 250 300 1 1 3.65 3.65 3.65 3.65 7.29 7-29 .76 •76 • 76 •76 1.52 1-52 k.kl 4.41 4.41 4.41 8.81 8.81 8,125 8,125 8,125 8,125 16,250 16,250 5,005 5,005 5,005 5,005 10,010 10,010 765 765 765 765 1,530 1,530 13,895 13,895 j 13,895 13,895 27,790 27,790 2,267 2,267 2,267 2,267 4,534 4,534 1 1 1 2 2 1 1 1 2 2 a/ Labor sta nd a r ds; feed tins — 200 cases per hour; operate equipment — one worker per fill line. b/ See Appendix Table B for list of equipment replacement costs and wnrniqi fixed charges, c/ Hourly wage, $1.64. d/ Hourly wage, $1.80. e/ Base wage plus 6 per cent to cover F.I.C.A., State Unemployment, and paid holidays. f/ Electric power estimated at 2.5 cents per motor horsepower. Repair estimated at 0.5 per cent of replacement cost of equipment per 100 operating hours. g/ Includes labor, power, and variable repairs. 31. computed from the information given in Table 6, are shown for 100-, 300-, and 500-hour seasons by the lightly drawn lines of Figure 11. Shorter operating seasons are considered in these cost calculations as compared with the cost calculations for cartons because the 6|-pound tins generally are filled during only a fraction of the total time the plant is in operation. The planning costs for filling 6|-pound tins, as shown by the dashed lines of Figure 11, are represented by the following equation: TSC = 1,133 + 221(h) ♦ 291(P) + S6oli(h)(P) where TSC = Total season cost (in dollars) of filling 6^-pound tins h = Hundred hours per year of 6|-pound tin filling operation P « Thousand pounds per hour of 6|-pound tin filling capacity oi/ Tins, 30 Pound Sliced Strawberries .— Sliced berry filling in 30-pound tins is usually a diversion or overflow operation from the consumer-size filling lines, It is a simple operation with practically no variation in method. Sliced and sugared berries flow into a fill hopper from the mixer. The fill worker takes an empty tin from an adjacent stack or from a chute, places it on a scale which is under a spout on the hopper, fills it by opening and closing the spout, places a lid on the tin, and pushes it aside on a conveyor to the set-off station. The tins are moved from the conveyor to pallets by a set- off worker. The lid is often placed on the tin by the set-off worker rather than by the fill worker, but this has no effect on filling costs. Equipment replacements costs, annual fixed charges, and variable costs of filling this product are given in the bottom section of Table 7. Total 1/ See footnote on p. 26 » .... .. .. -jo* ,-r.;.V 8 Calculated costs Planning costs Hours operated annually ( 500 J. 100 200 Output rate, cases per hour Figure 11. Total Annual Costs of Filling 6§-Pound Tins, 6 Per Case, in Plants Processing Strawberries for Freezing with Respect to Length of Operating Season and Hourly Output Rate California, 19£8 33. TABLE 7 Requirements, Hourly Variable Costs, and Equipment Replacement and Annual Fixed Charge for Filling 30-Pound Tins with Respect to Plant-Output Capacity in Flants Processing Strawberries for Freezing, California, 1958 Equipment replacement cost and annual fixed charged/ Output required!!^ Variable costs per hour Fill hopper Mixing screw with Con- Total capacity Workers Power without sugar con- trol and fill hopper replace- ment cost Annual fixed charge (tins per hour) Stamp tin£/ Fill . tind/ Add sugar 0 ' Set offi' Labor£/ and repair^' Total fi/ sugar meter Scale veyor ( steel roller) number dollars Whole berries — sut ar manually added 50 100 150 200 250 300 h/ 1 1 1 2 2 1 1 2 2 2 3 1 1 2 2 2 3 1 1 1 2 2 2 5.55 7.29 10.94 12.85 lit. 59 18.23 .03 .03 .05 .05 .05 .08 5.58 7.32 10.99 12.90 14.61+ 18.31 200 200 Uoo ItOO ItOO 600 260 260 520 520 520 780 75 75 150 150 150 225 535 535 1,070 1,070 1,070 1,605 77 77 154 154 154 231 Whole berries — sugar mechanically added 50 100 150 200 250 300 h/ 1 1 1 2 2 1 1 2 2 2 3 1 1 1 2 2 2 3.82 5-55 7.U6 9.37 11.11 13.02 .10 .10 .12 .12 .12 .16 3.92 5.65 7.58 9.49 11.23 13.18 1,315 1,315 1,515 1,515 1,515 1,715 260 260 520 520 520 780 75 75 150 150 150 225 1,650 1,650 2,185 2,185 2,185 2,720 261 261 338 338 338 415 Sliced berries — suga r mechanically added 50 100 150 200 250 300 h/ 1 1 1 2 2 1 1 1 2 2 2 1 . 1 1 2 2 2 3.82 5-55 5.55 9.37 11.11 11.11 .03 .03 .03 .05 .05 • .05 3.85 5.58 5.58 9.lt2 11.16 11.16 200 200 200 ItOO ItOO ItOO 260 260 260 520 520 520 75 • 75 75 150 150 150 535 535 535 1,070 1,070 1,070 77 77 77 154 154 154 a/ Labor standards (tins per hour): stamp tin—220; fill tin, whole berries—140; fill tin, sliced berries—155; add sugar, whole berries— 140; set off--l65. b/ See Appendix Table B for list of equipment replacement costs and annual fixed charges, c/ Hourly wage, $1.64. d/ Hourly wage, $1.80. e/ Base wage plus 6 per cent to cover Social Security, State Unemployment, and paid holidays. f/ Electric power estimated at 2.5 cents per motor horsepower. Repair estimated at 0.5 per cent of replacement cost of equipment per 100 operating hours. g/ Includes labor, power, and variable repairs . h/ Job performed by "fill tin" or "set off" worker. 3U. annual costs, computed at #)-tin intervals in output rate from the infor- mation given in Table 7, are shown by the lightly drawn lines of Figure 12. Planning costs shown by the heavy, dashed lines of Figure 12 are represented by the following equation: TSC - 169 + 179(h) + lli*(h)(P) where TSC " Total season cost (in dollars) of filling 30-pound tins of sliced strawberries h = Hundred hours per year of 30-pound tins, sliced berry filling operation P ■ Thousand pounds per hour/Of 30-pound tins, sliced berry filling capacity.-^ Whole Strawberries o— The filling operation is practically the same for 30-pound tins of whole berries as for sliced berries. However, while sliced berry filling is closely integrated with filling lines for consumer-size cartons, whole berry filling is an independent operation,. Although the same main sugar supply is used for both sliced and whole berries, separate labor and equipment must be supplied to combine sugar and whole berries in the proper proportion. Sugar mixing equipment consisting of a meter and screw-type mixer which also serves as the conveyor from the size grader to the whole berry fill hopper is usually used for this operation. However, in some plants, sugar is manually rather than mechanically added to the berries to avoid investment in separate sugaring equipment for this item. When this method is used, an additional worker is required to work with each "fill" worker to add a measure of sugar to each tin as it is filled. Since sugar is often manually added to whole berries as a part of the filling operation, costs are computed with both the manual and mechanical sugaring methods to allow cost comparison. Table 7 gives the crew requirements, equipment replacement costs, annual fixed charges, and variable costs of filling 30-pound tins of whole berries using the manual and mechanical sugaring methods. Total annual costs for 100-, 300-, and 500-hour seasons, computed at 00-tin intervals from the information given in Table 7, are shown for this product by the lightly drawn lines of Figure 13. Planning costs are shown by the heavy, dashed lines of Figure 13 and are given by the equation that follows. 1/ See footnote on p. 26. 35 Figure 12. Total Annual Costs of Filling 30-Pound Tins of Sliced Strawberries in Plants Processing Strawberries for Freezing in Relation to Length of Operating Season and Hourly Output Rate California, 1#8 100 200 Output rate, tins per hour Figure 13. Total Annual Costs of Filling 30-Pound Tins of Whole Strawberries in Plants Processing Strawberries for Freezing in Relation to Method Used, Length of Operating Season, and Hourly Output Rate California, 1958 36. TSC = 20h + 205(h) + 22(P) + 123.1(h) (P) where TSC = Total season cost (in dollars) of filling 30-pound tins of whole berries h = Hundred hours per year of 30-pound tins, whole berry- filling operation P = Thousand pounds per hour/of 30-pound tins, whole berry filling capacity.-^ The 30-pound tin sliced berry and 30-pound tin whole berry filling costs given above are not comparable due to the omission of sugaring costs from the sliced berry calculations. To place these costs on the same basis, it is necessary only to add the slicing and sugar mixing costs as given in the slicing and sugar system stage to the sliced berry equation. There are three casing methods generally used for carton casing in strawberry freezing plants* These were analyzed in relation to the quantities and costs of labor and equipment required at different output rates. In the manual method, method A, there are four components. These are: (1) stencil, form, and staple case; (2) fill case; (3) manually seal casej and (k) set off. Workers for stenciling and forming the stapled-bottom case are stationed on a raised platform or mezzanine. The stenciling job consists of obtaining bundles of flat cartons from near-by temporary storage, placing them on a table and removing the twine binding, applying one stencil to each case, and moving the stenciled flat cases to a case-forming table. Flat cases are formed manually by the case former as he transfers them individually from the table to a power stapler. The bottom of the case is stapled and the case placed in a chute which leads to the casing area. A casing worker transfers the case from the chute to a filling station, takes four cartons at a time for the carton conveyor, and places them in the case. When filled, the case is pushed aside to the case-sealing and palletizing station. Here, a set-off worker receives the case, applies glue to the case flaps, usually with a 3" to U" brush, and sets it aside to a pallet for transfer to the freezer. Pallets are stacked with layer dividers, generally consisting of six 1" x ii" to 2" x 3" slats, placed between every second layer to allow air circulation. Casing 1/ See footnote on p. 26. 37. Method B eliminates the labor involved in the case stapling and manual sealing of method A through use of a nonstapled case and automatic case- sealing equipment. The components of this method are: (l) stencil and form case, (2) fill case, (3) mechanically seal case, and (h) set off. Stencil and case-form workers are stationed near the casing station where cases are stenciled as in method A. The flat case is then opened, the bottom flaps folded in, and the case inverted to flatten the bottom flaps and prepare the case for manual fillings The formed case is set aside to the casing conveyor or, if cases accumulate temporarily, to a stack of cases adjacent to the conveyor. The fill-case worker takes the case from this location and fills it as in method A. The case then passes through an automatic case sealer and compressor to the palletizing area. A set-off worker sets the case aside to a pallet as in method A. In method C, the most mechanized method observed, the cartons are conveyed directly from the closer into a casing machine where they are mechanically filled. The components of this method are: (l) stencil case, (2) form case and operate casing machine, (3) mechanically seal, and (h) set off. The stencil and set-off components are the same as in method B. The casing machine and its operator, who forms the case, replace both the case- forming and case-filling workers. A case is formed in this method by opening the flat case, folding the bottom flaps down, and placing the case over a sleeve on the casing machine. While the discussion of casing methods has been directed to carton casing up to this point, the descriptions of casing methods A and B also apply to 6|-pound tins with the exception that two tins rather than four cartons are generally transferred to the case at a time. Use of an automatic casing machine as described in method C was not observed in use for 6^-pound tins during this study. Crew requirements, variable costs, and equipment replacement costs and annual fixed charges for output rates of 100 to 1,500 cases per hour of 10- ounce cartons, 2h per case, are given in Table 8. Similar tables are given in Appendix Tables D and E for 16-ounce cartons and 6|-pound tins. Total annual costs in relation to output per hour and length of season — calculated from the information contained in these tables— are shown in Figures llj. to 16. These graphs show that all methods are nearly equal in total seasonal cost at low rates of output for short seasons. However, method B becomes 38 o TABLE 8 Labor Requirements, Hourly Variable Costs, and Equipment Replacement and Annual Fixed Charge for Casing 10-0unce Cartons, 24 Cartons Per CaBe,wlth Respect to Plant-Output Capacity in Planto Processing Strawberries for Freezing, California, 1958 Output capacity (cases per hour) Workers required^/ Stamp. Form case?' caseS' Fill Set , off!/ Variable costs per hour Labor^/ Power and repalrl' alS/ Equipment replacement costs and annual fixed charge? Stapler Casing machine Sealer and com- pressor Con- , veyorsiy Miscel- . laneou&i' Total replace- ment cost Annual fixed charged' number 100 200 300 4oo 500 600 700 800 900 1,000 1,100 1,200 1,300 l,l4O0 1,500 dollars k/ k/ T 1 1 1 1 2 2 2 2 2 2 2 3 5-38 9.03 12.51 16.15 16.15 21.3k 21.54 28.66 28.66 32.31 34.05 37.69 39. 43 1(3.08 1(6.56 Method A—stapled case, manual .05 .05 .10 .10 .11 •15 .15 .20 .20 .20 .21 .2* .26 • 30 • 31 5.U3 9.08 12.61 16.25 16.26 21.69 21.69 28.86 28.86 32.51 34.26 37-93 39.69 43.38 1(6.87 675 675 1,350 1,350 1,350 2,025 2,025 2,025 2,700 2,700 2,700 3,375 3,375 4,050 M50 filling, manual sealing 75 75 75 75 150 150 150 150 225 225 225 225 300 300 300 160 160 260 260 260 360 360 520 520 520 620 620 620 721 780 100 k/ 1 1 3.65 .63 4.29 6,485 5,295 75 85 11,940 11,940 1,965 200 y 1 1 3.65 .63 4.29 6,485 5,295 75 85 1,965 300 1 1 1 5.38 •63 6.02 6,485 5,295 75 85 11,940 1,965 1,965 400 1 1 2 7.29 .63 7.93 6,485 5,295 75 85 11,9^0 500 1 2 2 9.03 1.26 9.67 12,970 10,590 150 110 23,820 3,922 600 1 2 2 9.03 1.26 10.31 12,970 10,590 150 110 23,820 3,922 700 1 2 3 10.94 1.26 12.22 12,970 10,590 150 110 23,820 3,922 800 2 2 3 12.68 1.26 13.96 12,970 19,»*55 10,590 15,885 150 170 23,880 35,760 3,922 900 2 3 3 14.42 1.89 15.70 225 195 5,886 1,000 2 3 3 14.42 I.89 15.70 19,455 15,885 225 195 35,760 5,886 1,100 2 3 4 16.32 1.89 18.24 19,455 15,885 225 195 35,760 5,886 1,200 2 3 4 16.32 I.89 18.24 i9#*55 25,940 15,885 225 195 35,760 5,886 1,300 2 3 4 16. 32 2.52 18.24 21,180 300 220 47,640 7,843 1,400 2 4 5 19.97 2.52 21.89 25,940 21,180 300 220 47,640 7,843 1,500 3 4 5 21.71 2.52 23.63 25,940 21,180 300 280 47,700 7,851 910 910 1,685 1,685 1,760 2,535 2,535 2,695 3,W»5 3,W»5 3,5"*5 4,220 !*,295 5,070 5,130 142 142 267 267 277 401 401 422 544 544 557 668 678 803 810 Method E--nonstapled case f manual filling. mechanlca] sealing 100 k/ y 1 1 3.65 • 30 3-95 5,295 75 85 5,1*55 895 200 V 2 1 5.38 .30 5.68 5,295 75 85 5,455 895 300 1 1 1 8.86 .30 9.16 5,295 75 85 5,1*55 895 400 1 2 3 2 14.25 .30 14.55 5,295 75 85 5,>*55 895 500 1 2 3 2 14.25 • 59 14.84 10,590 150 110 10,850 1,782 600 1 2 4 15.98 • 59 16.57 10,590 150 110 10,850 1,782 700 1 4 3 19. 6' • 59 20.22 10,590 150 110 10,850 1,782 600 2 ,3 5 3 23.11 .60 23.71 10,590 150 170 10,910 1,789 900 2- 5 3. 23.ll .89 24 .00 15,885 225 195 16,305 2,676 1,000 2 1 6 ■3 J 26.58 •89 27.47 15,885 225 195 16,305 2,676 1,100 2 4 6 4 28.49 .89 29.38 15,885 225 195 16,305 2,676 1,200 2 4 7 4 30.23 .89 31 .12 15,885 225 195 16,305 2,676 1,300 2 5 8 4 33-71 1.19 34.90 21,180 300 22c 21,700 3,563 1,400 2 5 8 5 35.62 1.19 36.81 21,180 300 220 21,700 3.563 1,500 3 5 9 5 39.00 1.19 40.28 21,180 300 280 21,760 3,571 Method C--nonstapled case, mechanical casing. mechanics 1 sealing a/ Labor standards (cases): stamp case— 700; form case, method A — 260; form case, method B— 315; f°™ case, method C--440 (operate easing machine); fill case, method A— 160; fill case, method B — 185; set off, method A— 195; set off, methods B and C— 345 (units, cases per hour), b/ See Appendix Table B for list of equipment replacement costs and annual fixed charges, c/ Hourly wage, $1.64. d/ Hourly wage, $1.80. e/ Base wage plus 6 per cent to cover F.I.C.A., State Unemployment, and paid holidays. f/ Electric power estimated at 2.5 cents per motor horsepower. Repair estimated at 0.5 per cent of replacement cost of equipment per 100 operating hours . gj Includes labor, power, and variable repairs. h/ Includes charges for skate conveyors at $4.20 per foot and steel roller conveyors at $6.75 per foot. l/ Includes charges for case-stamping tables, stencil materials, case-forming tables, and ease chutes where required. 11 Calculated as percentage of replacement cost of equipment. Includes depreciation, 10 per cent; fixed repair, 1.5 per cent; ta *es, 1 per cent; Insurance, 1 per cent; and Interest, 3 per cent (approximately 5-5 per cent on undepreciated balance). Total of 10. 5 per cent, k/ Job requires small amount of time and is performed by other workers. 500 1000 500 1000 500 1000 Output capacity, cases per hour Figure llu Total Annual Costs of Casing 10-0unce Cartons, 2h Per Case, in Plants Processing Strawberries far Freezing in Relation to Method Used, Length of Operating Season, and Hourly Output Rate, California, 1958 • Planning costs ~i — i — i — | — i — i — i — r 500 Hour Season — t — i — i — i — | — i — i — i — r — 1000 Hour Season — Method "a" - Stapled case, manual casing, manual sealing Method B Non-stapled case, manual casing, mechanical sealing Method C — Non-stapled case, mechanical casing and sealing I I I L_l l_L_L 500 500 Output capacity, cases per hour 500 Figure 1$* Total Animal Costs of Casing 16-Ounce Cartons, 2U Per Case, in Plants Processing Strawberries for Freezing in Relation to Method Used, Length of Operating Season, and Hourly Output Rate, California, 1958 41. I I 1 100 200 Output rate, cases per hour Figure 16, Total Annual Costs of Casing 6§>-Pound Tins, 6 Per Case, in Plants Processing Strawberries for Freezing in Relation to Method Used, Length of Operating Season, and Hourly Output Rate California, 1?58 U2. superior to method A at higher rates of output and for longer seasons. Some savings in total seasonal cost through use of method C, where applicable, appear possible even in comparatively short seasons of 500 operating hours if output rate is high. This is due to the fact that the casing equipment used in method C has high fixed capacity and becomes most efficiently used at high rates of output. Since a very large portion of the costs of this method are fixed costs which do not increase with number of hours operated, the greatest advantage of method C appears when operating hours per season increase. Planning costs for the casing stage, shown graphically by the heavy, dashed line of Figures Ik to 16, are given by the following equations: 10-ounce cartons, 2k per case TSC » U7S + 232(h) + 3U3(P) + 9U(h)(P) where TSC ■ Total season cost (in dollars) of casing 10-ounce cartons, 2k per case h ■ Hundred hours per year of casing 10-ounce cartons, 2k per case P = Thousand pounds per hour of 10-ounce cartons casing capacity*-' 16-ounce cartons, 2h per case TSC » 281 + 29k(h) + 23U(P) + 6U(h)(P) where TSC =» Total season cost (in dollars) of casing 16-ounce cartons, 2k per case h » Hundred hours per year of casing 16-ounce cartons, 2k per case P = Thousand pounds per hour of 16-ounce cartons casing capacity .2/ 6^-pound tins, 6 per case TSC = UO + 281(h) + 28(P) + 106.U(h)(P) where TSC = Total season cost (in dollars) of casing 6?-pound tins, 6 per case h = Hundred hours per year of casing 6i-pound tins, 6 per case P ■ Thousand pounds per hour of 6|-pound tins casing capacity .1/ 1/ See footnote, page 26 • •J ! * >« ■ ■ ... ■ 905 ■ ■■■ . • .: ?f,v [« 5 ■ ... . ■ -. 'in - : it 0 ::■> mi H • ,i .. ■ • • . - , . • •• • • • - . •' tMhWn'Xi ■ • • •; - j SOTtRHOa, jjfti'S&a Us i^i 'io;, eft) •is \ 2 U3 Receiving, Checkout, and In-Plant Transportation The same equipment and crew can be used for receiving raw product and for moving materials and finished product within the plant. In all except the largest plants, this is the usual practice. These activities are, therefore, combined in this report to form one stage. Strawberries are usually delivered to the processing plant on flat-bed trucks, the berries being in crates of approximately lii-pound capacity, stacked on pallets with an average of about 55 crates per pallet. Processor responsibility begins with removal of pallets from the truck. In all plants observed, this is accomplished by fork-lift truck. The pallet is typically transferred from the truck to a dormant platform scale and then set aside to temporary storage to await processing. The receiving stage is considered to be completed when the pallet has been moved from temporary storage to the dump station. The second use of fork-lift equipment is to move loaded pallets of packed product from the palletizing area to the checkout area where freezer personnel assume responsibility for the product. The fork-lift truck is also used for a variety of minor jobs such as handling packing materials. Estimating Fork-Lift Truck Requirements To enable estimation of the fork-lift truck time requirement in a given plant, measurements were taken of the time actually used for the various components of each of the jobs performed. It was found that per pallet time requirements averaged 3.391 minutes for receiving^ and 2.050 minutes for 2/ checkout-' activities* Since the average weight of berries received per pallet is approximately 750 pounds, the receiving time per 1,000 pounds is 1.33 times the time require ment per pallet. The total receiving time per 1,000 pounds is thus k.521 minutes. \l Includes removing the pallet of raw product from the truck, moving it to the scale, waiting for weighing, moving to temporary storage, removing from temporary storage and taking to dump station, placing empty crates on the truck, and moving the empty fork-lift truck to the grower truck and from the dump station. 2/ Includes pickup of the pallet, moving to the checkout area, recording the type and amount of product, time, etc., and returning with empty fork-lift truck to the palletizing area. £«jfl3*» lis & *dt£SBXq erf* airidft - ' ' - Of — • • • I I , • ... y : • ... . . ; '- '■ ft ' : is iq t tu •■- . .. ■ .•• ' • r't ■ f] .... . j r- . !, . ,, . . . ■. ■ . . • ' • icq ,J ■ •■• - • , ; tT^-V. . I . ... JiiU-J v. alii 1 , 5 :JC[ Jsflj ££U.tOX J tit hh. To enable estimation of fork-lift truck and driver time requirements based on plant-input capacity, estimates of checkout times are converted to a raw product basis. This requires specification of the amount of raw product removed before packaging, amount of sugar added, and weight of packaged product per pallet. These are estimated as follows for this analysis, based on typical values observed during this study? 5 per cent of the raw product is removed from the inspection belt as rots, the berry-sugar ratio is h to 1, and pallets are loaded with 90 cases of 10-ounce cartons— 2h per case— or 1,350 pounds each. On this basis the time requirement for checkout activity is 1,803 minutes per 1,000 pounds of raw product input. If more berries are removed as rots, a smaller proportion of sugar is added to the berries, or more product is handled per pallet load, checkout time required per 1,000 pounds of raw product input will be reduced while the reverse of each of these conditions will increase the checkout time requirement. In addition to the receiving and checkout operations described above, there are various miscellaneous operations performed by fork-lift trucks and operators. These consist primarily of handling packaging materials and are estimated to amount to 10 per cent of the total work time. From the above results, total time requirements per 1,000 pounds of raw product are then found as follows: Activity Minutes required Receiving IIP' Checkout 1 » 8 °3 Miscellaneous , / Unavoidable delay- 7 1*75? Total time requirement per 1,000 pounds of raw product 8.78U The total time requirement per 1,000 pounds of raw product given above can be applied to specified average receiving rates to estimate, as in other stages, the number of machines and workers required. This procedure ignores the fact, however, that a large part of the raw product is received before the processing operation begins and that much of the miscellaneous work can be performed while the plant is not operating. Therefore, we cannot neces- sarily say that a plant,which on the basis of its capacity output rate 1/ Includes scheduled rest periods and nonproductive time due to uneven flow of product, personal time, etc. Various studies indicate that this var: in particular plants from 15 to U0 per cent of the total time input. Twenty per cent is used here as a practical minimum. • V.J : - St EJ I • 8« .. . . :•' •■ u; ■ ■ • • - • )9fS ••• • ■ , ' : ■ . ■ .-. • "•' l*>0 ' : -* '. ' ,...•> • •• • . • ;■ - - . - : , , • ■ . • .... = ; . | . .... ■ { , . , ' ' • ■ ' ' •' ' - ' tu I . • J . .' l-vj -: > ■ Vital ' •. • ■ .- - • • / rj . ,. : . • • ■ • ' '- Llfrl - erf : : - i 51 ••; 5'; ' . tOC " ' ■ ■■ - .y . I '•' •■' •■' :■' - ■• 1 . ■. ■ ; ' fOq ' . f. ■■ ■. . ; •>•-. . ■ • ' • ' • ; ' •■ . . . r ■ I ■ ■■■ '• twbcnvq. u . s ntn • 3 •" • ••; .... ■ • - >-. - .-, . . : ■• ■ ■ j ..... . si| «# ;f.j. : ' I ;r. • us. requires 60 minutes of fork-lift truck operation per hour of plant operation, must have just one fork-lift truck or that a plant of slightly higher output capacity requires two. However, on the basis of plant inventories and obser- vations, this type of calculation appears to give a good indication of the number of fork-lift trucks required to fulfill requirements during peak load periods. The work performed before the day's processing operation begins is balanced by unavoidable periods of delay during the latter part of the processing period. On this basis one fork-lift truck will be required for every 6,800 pounds of plant-input capacity. The hourly variable costs of operating a fork-lift truck consist of a charge of 29 cents^^for variable repairs and maintenance, 21 cents for fuel and oil, and ^2 0 30^^for labor. The variable repairs and maintenance and the fuel and oil charges— a total of 50 cents per hour or 7 cents per 1,000 pounds- are made only for the hours of truck operation required to handle the plant capacity. The labor charge is based on the number of trucks required and the hours of plant operation o Total annual costs of the receiving and in-plant transportation stage include, in addition to the costs of fork-lift truck operation, the costs of a receiving scale, berry crates, and pallets. Hourly variable and annual fixed charges for these items are given in Table 9» Total annual costs, based on this table, are shown in Figure 17* Planning costs, given by the heavy, dashed line in Figure 17, are found from the following equation: TSC = 66h + 122(H) + 237(P) + Wu9(H)(P) where TSC » Total season costs (in dollars) of the receiving, checkout, and in-plant transportation stage H » Hundred hours plant is operated annually P ■ Thousand pounds of strawberry input per hour. Miscellaneous Equi pment and Materials Equipment costs have been included in the estimates of stage costs wherever the equipment is used exclusively in one stage. Many miscellaneous 1/ Estimated on the basis of 0.5 per cent of the replacement cost of a fork-lift truck ($5,775) per 100 operating hours. 2/ Calculated on the basis of 1958 night wage rate of $2.17 plus 6 per cent to cover Social Security, State Unemployment Compensation, and paid holidays. TABLE 9 Equipment Replacement Costs, Annual Fixed Charges, and Hourly Variable Costs of Receiving, Checkout, and In-Plant Transportation vith Respect to Plant- Input Capacity in Plants Processing Strawberries for Freezing, California, 1958 Input capacity (pounds per hour) Fork- truck . driver 1 " Variafc Fork truck 0 / le costs pei Receiving scaled • hour Crates and . pallets?' Total Equipment re Receiving scale 'placement Crates and pallets costal/ Fork truck Anni Crates and pallets ial fixed cl Receiving scale iarges.fi/ Fork truck Total 5,000 10,000 15,000 20,000 25,000 2.30 4.60 6.90 6.90 9.20 0.37 0.73 1.10 1.46 1.83 0.07 0.07 0.07 0.07 0.07 0.29 0.57 0.86 1.15 1.43 3.03 5.96 8.93 . 9-58 12.53 dollars 1,430 1,430 1,430 1,430 1,430 2,866 5,733 8,599 11,465 14,331 5,775 11,550 17,325 17,325 23,100 516 1,032 1,5*8 2,064 2,580 188 188 188 188 188 953 1,906 2,859 2,859 3,812 1,657 3,126 4,595 5,m 6,580 a/ See Appendix Table B for list of equipment replacement costs and annual fixed charges. b/ Calculated on the basis of one driver per fork truck at $2.17 per hour plus 6 per cent to cover Social Security, State Unemployment, and paid holidays. c/ Includes charges of $0.29 for variable repairs and maintenance and $0.21 for fuel and oil per hour of fork-lift truck operation, d/ Estimated at 0.5 per cent of replacement cost per 100 hours of plant operation, e/ Estimated at 1.0 per cent of replacement cost per 100 hours of plant operation. 5 10 15 20 Hourly strawberry input rate, thousand pounds Figure 17. Total Annual Costs of Receiving, Checkout, and In-Plant Transportation In Plants Processing Strawberries for Freezing In Relation to Length of Operating Season and Hourly Strawberry- Input (Raw Product) Rate, California, 1958 Plant hourly strawberry input capacity, thousand pounds Figure 18. Total Annual Costs of Miscellaneous Equipment and Materials in Plants Processing Strawberries for Freezing with Respect to Length of Operating Season and Plant-Input (Raw Product) Capacity- Calif ornia, 1$$8 U8. equipment items are not, however, assignable to particular stages but are part of the general plant equipment overhead* These are grouped together for inclusion in the following section on total plant costs. Individual equipment prices are given in Appendix Table C, and estimated total annual charges for these items are shown in Figure 18 and given by the equation below. Calcu- lation of these costs include an annual fixed charge of 16.5 per cent of the equipment replacement cost to cover depreciation, repairs, insurance, taxes, and interest on investment and a variable charge per 100 operating hours of 0.5 per cent of the equipment replacement cost for repairs and maintenance plus an allowance for cleaning and housekeeping materials a TSC = 1,072 + 32.5(H) + 9.2(F) + 1.3(H) (P) where TSC " Total season cost (in dollars) of miscellaneous equipment and materials H ■ Hundred hours of plant operation per year P = Thousand pounds of hourly plant capacity. Superintendence and Miscellaneous Labor There are several general labor and supervision categories in addition to those included in the above stage analyses 9 These include the plant superintendent, foremen, weighmaster, janitors, cleanup men, and utility men. In addition, each California strawberry processing plant is under continuous U. S. Department of Agriculture inspection which requires the presence of one inspector per pla::t» The costs of U. S. Department of Agriculture inspection are paid for on a contractual basis. Requirements and costs of the other general categories vary among plants. These costs, based on observations of actual plant opera- tions and studies of accounting records of labor utilization, are shown in Figure 19 and are given by the following equation: TSC « 2,800 + 711(H) + 12U(H)(P) where TSC => Total season cost (in dollars) of superintendence and miscellaneous labor H = Hundred hours of plant operation per season P = Thousand pounds of hourly plant capacity. t ' ..... ... '• ' ' ■ * ' •■ ■ ■ ■ ■ ■ • 6 4 1 1 1 1 1 1 1 1 - Hours operated annually - onnn ^ C\J\J\J - — - IOOO ^^0' - ^^^^^ 500 1 1 1 1 5 10 15 20 Plant hourly strawberry input capacity, thousand pounds Figure 19. Total Annual Costs of Superintendence and Miscellaneous Labor in Plants Processing Strawberries for Freezing with Respect to Length of Operating Season and Plant-Input (Raw Product) Capacity California, 1958 10 15 20 Hourly strawberry input rate, thousand pounds Figure 20. Total Annual Costs of Administration in Plants Processing Strawberries for Freezing with Respect to Length of Operating Season and Plant-Input (Raw Product) Capacity California, 1958 Administration and Office Costs This cost component includes all those miscellaneous expenses associated with plant administration which cannot be directly assigned to a particular stage of the plant. It includes officer and office employee salaries, plant managers, fieldmen, office supplies, professional fees, and miscellaneous expenditures such as telephone, licenses, dues, subscriptions, donations, etc. It does not include sales expense. Several of the cost categories included are difficult to obtain individually from plant records or from actual obser- vations due to the dual nature of the duties of many of the administrative personnel. In some plants the manager may perform bookkeeping or fieldman duties while bookkeepers or clerical workers often serve to some extent in an administrative capacity. Costs of administration are related to both size of plant and length of processing season. While it seems logical that this cost would not increase proportionately with either of these variables due to fixed and partially fixed costs, the available data preclude a precise development of this rela- tionship. Therefore, total administration costs are given on the basis of pounds of strawberries processed per year (pounds processed per hour times hours operated per year). This relationship is shown in Figure 20 and given by the equation below. Although this lacks the degree of precision desired, it is, nevertheless, felt to be a good approximation to costs of adminis- tration with respect to output in typical situations. TSC = (P) where TSC » Total season costs of administration and office operation H m Hundred hours of plant operation per year P = Thousand pounds per hour of plant capacity. Building Costs Floor space requirements for well-organized plants of various capacities, based on observations in the sample of plants included in this study, are given in Table 10. These total space requirements include space allowances for processing, temporary raw product storage, packing materials storage, tool room, rest rooms, and offices.-^ An exterior paved area is commonly provided 1/ See Figure 2. TABLE 10 51. Building Space Requirements, Replacement Costs, and Annual Fixed Charges with Respect to Plant-Input Capacity in Plants Processing Strawberries for Freezing, California, 1958 Plant strawberry input capacity Enclosed building area , requirement-' Building replacement costh/ Annual building chargec/ pounds per hour square feet dollars 5,000 5,983 29,312 2,609 10,000 11,5*6 U6,595 15,000 17,109 63,880 5,685 20,000 22,672 81, l€k 7,22U 25,000 28,235 98,UU8 8,762 a/ Estimated from the following equation: A = U20 + 1112. 6x where A is the enclosed area in square feet and X is the plant strawberry input capacity in thousand pounds per hour. b/ Estimated from the following equation which is based on 1957 wage rates for construction labor and prices for building tr&terials: C = 10,722 + 3.107X where C is the building cost and X is the plant enclosed area in square feet. This includes the cost of building with concrete side wall and floor and asphalt roof, mezzanine, sanitary plumbing and primary water lines (but excluding plumbing costs assignable to specific equipment items), and all electrical wiring and lighting (except that which is assignable to specific equipment items). The basic building replacement cost information was obtained from Sammet, L. L., Economic and Engineering Factors in Agricultural Processing Plant Design (unpublished Ph.D. thesis, University of California, Berkeley, 1958)7 P- c/ This is based on the building replacement cost and includes depreciation, 2.5 per cent; repairs, 1.8 per cent; insurance, 0.6 per cent; taxes, 1.0 per cent; and interest, 3.0 per cent (approximately 5.5 per cent on unde- preciated balance) for a total of 8.9 per cent. This charge is the plan- ning cost for buildings and is represented by the following equation: C ■ 1,070 + 307. 7X where C is the annual building charge and X is the plant strawberry input capacity in thousand pounds per hour. The use life and annual charge percentage of replacement cost of buildings was derived from information contained in Sammet, L. L. , and I. F. Davis, Building and Equipment Costs. Apple and Pear Packing (Berkeley: University of California, College of Agriculture, Agricultural Experiment Station, December, 1952), p. 21. (Giannini Foundation Mimeographed Report No. ikl.) Processed. I 52 to serve as a receiving area and occasional storage area for packing materials, empty berry crates, pallets, or raw product awaiting processings Two types of construction are common in California strawberry processing plants. In general, the smaller and older plants are of frame construction with corrugated, galvanized iron sheets on roof and sides. The newer plants tend to have concrete sidewalls and asphalt roofing. All plants have concrete floors at ground level. Clear height from the floor to the roof trusses varies from 15 to 25 feet. Annual building costs are approximately equal for these two types of construction when length of building life, upkeep, and differences in insurance rates are considered. Costs shown here are for concrete sidewalls and asphalt roof since the trend is to that type of construction. Replacement costs— based on engineering estimates using 1957 wages and prices of materials— and annual fixed charges for these plants including the building, plumbing, wiring, and exterior paving are given in Table 10. The wiring charge includes the main panel, general lighting, and all overhead wiring. Plumbing is provided only for the rest rooms and primary water lines. Electrical drops and switches and plumbing connections to specific items of equipment are included in the installation cost for that equipment. PLANT COSTS The preceding section has dealt with a description of the various cost components, alternative techniques used within stages, and a synthesis of costs by cost component. This section uses the cost relationships developed for individual components to indicate the total cost of processing in relation to rate of plant output per hour and hours operated per season. Simplifications There are many factors affecting the costs of processing strawberries for freezing. Several of these, however, are so nearly constant per unit of output, regardless of plant size or hours of operation, that they add a constant amount to average costs. These have been omitted from the analysis to avoid the introduction of unnecessary complications. Limits have been imposed on certain other variables to keep the analysis within workable limits. 3 aganoja-XsnoiBo^o;) bnr> &gip ■^rtiviaoa'x b sb avisa ox Snijirava xoirboTq vsi to t exeXXi»q t as*fltO >£ned vxqma gnleaeooiq Y'nsdvsijs ctmolXXaC ox aornnoo eia noixoirixenoo 'Jo aaqicx om 9X9Tonoo 9vi?rf admXq XXA .gixr.loo'i JXsriqas bus aXXovabis axoiorfoo evfld 0 eesairit loorr srix ox tooXI orix moil xrt^ieri leslD ..XetraX tarrois xa c :> aochXli/d XaxmnA aoeX nsriw noxjot-ixsnoo to aXXfi . .noi^ot'id-saoo lo sq^J jarf* o* a± b^aix srix aonls looi : i ■ • n^ttnLoi at ania-aoo-iq lo xaoo Xcxox arix axsoihriX ox ajnarto ixboosiq aril" 3xXs t 3in&n<' loo xaoo Yd i >d rxic urod *ieq Xi/qxuo xnaXq lo axon ox nois.'TsrivB'x&s $aias9r>o'a lo axeoo srix anixos'nfi a«xojoel '-rtsci oia aieril lo xXrw iaq xrtaxanoo Yltaan os ais ,*r9V9vod , oRe.it lo X) + 1.6(15) (10) = $1,37*. If, as in this example, 10 per cent of the berries are removed from the inspection belt and the berry-sugar ratio is h to 1, the 15*000 pounds per hour of raw product input is reduced to 13,500 pounds of berries, while 3,375 pounds of sugar are added, making a total output of 16,875 pounds per hour. Using this figure as output pounds, the cost calculation for 10-ounce cartons is as follows: TSC = 963 + 930(P) + 587(h) + 177.3(P)(h) = 963 + 930(16.875) + 587(10) + 177.3(16.875) (10) ■ d £2,l4i6. The cost of packing the sortouts can be found from the 30-pound tin, whole berry equation. Five per cent of the raw product input is removed from 57. the inspection belt as sortouts and the berry-sugar ratio is k to 1; thus, 750 pounds of berries plus 188 pounds of sugar (a total of 938 pounds) are packed per hour and this cost is: TSC = 20U + 22 (P) + 205(H) + 123ol(P)(h) « 20h + 22(0.938) + 205(10) + 123.1(0.938) (10) = $3,U30 The total plant cost is now the total of all of these costs. Average cost is found by dividing total annual cost by the number of pounds processed. This can be done on the basis of pounds of raw product input or packed product output. With input rate given, packout rate is determined by berry quality and the amount of sugar added to the berries. This has been demonstrated in the above example where 15,000 pounds of hourly berry input became 16,875 pounds of hourly packout. Average cost per 1,000 pounds on an input basis, in this case, is $16. Sh ($>2U8,lk2 divided by 15,000,000 pounds) and on a packout basis is $lh»10 ($2l;8,lli2 divided by 16,875,000 pounds). Using the cost equations as described above, the total season cost can be estimated for any specified situation— plant size, length of operating season, berry quality, berry-sugar ratio, and product (or products). However, each of these cost determinants must be specified in advance to allow this cost calculation. The effect each of them has on total and average costs will be illustrated using the estimating procedure given above. In any given plant, capacity input rate is determined by the number of quality inspection belts. Therefore, in a plant operating at capacity, quantity is specified in terms of input in calculation of total annual and average unit costs. However, these costs are of more interest and value on a product packout basis; so in the following demonstrations of the effect of the various determinants on costs, they are given in these terms. Common costs Slicing and sugar mixing 10-ounce cartons, 2k per case Sortouts $190,891 1,375 52,UU6 3,1*30 Total *:2l*8,lli2 • t ■■ ■ 58. Total Plant Costs and Effect of Cost-Determinant Variation Products Packed and Plant Size Total season costs for the five different forms of packed berries con- sidered in this report are shown for a 1,000-hour season and in relation to packed output rate in Figure 21A. Panel B of Figure 21 expresses these total costs in terms of average costs per 1,000 pounds of product packed, These curves are the long-run planning curves—total and average— for plants pack- ing any one of the products shown under the conditions specified. This figure shows that packing in larger containers tends to result in a lower processing cost per pound. The figure also illustrates the effect of plant size on these costs o Average costs decrease very rapidly with increased plant size in the lower ranges of plant size but less rapidly as plant size becomes greater. This decrease of average cost as plant size increases is due to a combination of the spreading of certain fixed costs— such as buildings, equip- ment, and supervision — over a greater poundage and the substitution of various cost-reducing techniques in the larger plants « Length of Operating Season There are many fixed and partially fixed elements of cost which either do not vary or do not vary proportionately with the number of hours operated. A longer processing season spreads these costs over a greater output with a resulting decrease in unit costs. Figure 22 demonstrates the effect of the number of hours operated annually on total season and average unit costs using 10-ounce cartons as the example. This figure shows that, while there is an appreciable decrease in the cost per pound as length of season increases, the majority of this decrease comes in the shorter seasons. The decrease in average cost with each additional 100 hours of annual operation becomes less as season length increases. Strawberry Quality Berry quality, as measured by the quantity of berries that must be re- moved from the inspection belt by quality-sort labor, affects total and unit processing costs in two ways. Poor berry quality, for example, increases the costs of sorting a given quantity of raw product; but with a reduced packed ?0l I I I I i i I r <2 300 _o ~o "D C o £ 200 en o o o 3 § 100 o .o A. TOTAL COSTS q- 10 ounce cartons, 24 per case D-6V2 pound tins, 6 per case c- 16 ounce cartons, 24 per case d-30 pound tins, sliced berries e-30 pound tins, whole berries 1 1 1 I -l_L ■ I I I I 1 1 I I 10 15 20 Hourly output rate 5 . 10 , thousand pounds of product 2 , Total art ATCrage Planning Costs of Packing Various Products in Single-Product Plants Processing S^^s^^t^cSTpSed on Output Poundage, a 1,000-Hour Operating Season, MPjr Cent of ttelerS Srt Remold from the Inspection Belt, and a U to 1 Berry-Sugar Ratio, California, 195° 8 I I I I t — i — i — r I i i i [ i i i i | I i i I A. TOTAL COSTS 10 i_ a ~o T3 "O c o to to o o c o 600 500 400 300 200 100 Hours operated annually -2000 to ■a c o CL 19 18 T3 C o to I 17 a. to i_ ~o T3 to" to o u tu CP o 14 0) < 13 TT | I I | l I I AVERAGE nnual T i i i i I i i i i UX-i-J J I — L 15 20 Hourly output rate, thousand pounds of product Season, 10 Per Cent of the Berry Input Removed from the Inspection Belt, and a h V;3y«3I*"*^'.':''-''- ;i . i <:-""»'V.- ' '; 0 , , •, . v . i -, it •"• .' • • next-mi ' sail?: . 95 aiv ©.t*cto jMrxrota > a ; % "i — r— i — r £ 300 - o T3 "D C o CO 3 o Total for a i i i I | i i i i | i l A. TOTAL COSTS cost planning curve single - product plant £ 200 CO to o o o 3 C C o 100 ( - — Total plant capacity, .5~*-> thousand pounds per hour ' ' ' ■ I i i ■ i I « » I ' ■ ■ ' I 10 15 20 -S 191- c 3 O O. C o CO 1 17 01 Q. co 16 a 18 - 15 - o CO~ CO O o a> 14 o> o < 13 >v I I I I I I I I B. AVERAGE COSTS Average cost planning curve for a single -product plant Total plant capacity, thousand pounds \ per hour. 1 1 1 I ' ■ ' ' I ■ ' ' ' I ' ■ ' ' i i i i 10 Hourly output rate, thousand pounds of product 15 20 Figure 25. The Relationship Between Planning Costs in Single-Product Plants Processing Strawberries for freezing and Planning Costs of a Specific Product which Represents a Portion of Total Output of a Multiproduct Plant Using 10-Ounce Cartons, 2l» Per Case, as an Example — Costs Based on Hourly Output Poundage, a 1,000-Hour Operating Season, lO Per Cent of the Berry Input Removed from the Inspection Belt, and a k to 1 Berry-Sugar Ratio, California, 1958 CD 67 this figure are the planning costs for a single-product plant shown in Figure 21 for 10-ounce cartons. The solid lines are the costs which would apply to a particular product— in this example, 10-ounce cartons— if the product were packed in a larger plant packing other strawberry products. The vertical distance between the dashed line and a solid line is the difference in cost of packing in single-product or multiproduct plants^ For instance, if a plant of 5,000-pound input capacity operates under the conditions given in the caption and packs only 10-ounce cartons, the total season cost is ^99, 500; and if this same quantity is packed in a plant of 25,000-pound total capacity, the total season cost of the 10-ounce cartons is $83,500— a difference of $16,000. Just as in the demonstration of the higher costs incurred in plants working at less than capacity, these curves gradually move together until they merge at the point where the product involved uses the entire plant capacity. However, in this case the single-product planning curve (broken line) is above (of higher cost) the planning curves which apply to given products within multiproduct plants e 1/ This difference is not due, per se, to the fact that a product is packed in a multiproduct plant but to the larger total plant capacity—due to multi- product operation— and the resultant economies of scale which become available to certain parts of the process for each specific producto 68. SUMMARY There has been a rapid expansion in frozen strawberry production in the western states in recent years requiring a corresponding expansion in processing facilities. The purposes of this report are to present information concerning relative costs of different methods or techniques used in preparing straw- berries for freezing as an aid to plant operators when planning new facilities or alterations to present facilities and to develop estimates of total costs of processing strawberries under California conditions. For convenience of analysis, crew and equipment requirements are given for each of several plant stages for various rates of operation for each of the methods commonly used. Most economical methods with respect to annual operating hours and hourly rates of operation are determined. High labor- consuming methods frequently are shown to be most efficient at low output rates and for short seasons with mechanization becoming more advantageous as output rate and season length increase. Planning curves and planning equations, which indicate costs in relation to output rate when least-cost techniques are used, are developed for each plant cost component. The cost components considered in this study are: (1) dumping, (2) quality sorting and size grading, (3) slicing and the sugar system, (h) container filling, (5) casing, (6) receiving, checkout, and in-plant transportation of products and materials, (7) miscellaneous equipment and materials, (8) super- visory and miscellaneous labor, (9) office and administrative expense, and (10) building costs. In the dumping stage the costs of two methods, called "manual" and "mechanical," are given. The manual method, although used in the majority of California plants at present, is shown to be the most efficient in only the small plants operating comparatively short seasons. While quality sorting and size grading is one of the high cost stages, this operation is highly standardized among the plants studied and costs of only one method are presented. There are two methods— manual and mechanical— of supply- ing sugar to the metering and mixing equipment of the slicing and sugar system stage. In the manual method sugar is manually dumped from 100-pound bags to a hopper over the metering device, while in the mechanical method, bulk sugar is delivered to the plant by tank truck, placed in a silo or storage bin, and then moved by gravity and/or power conveyor as needed to point of use. The sugar supply costs are lowest for the manual method only in small plants operating short seasons. A sugar price differential eliminates even this area of advantage for plants operating under California conditions. (fi ft! . . . ■ ,. . ; • ■ 3d no; ■ - . . j ... • ' i (Of) ■ - .; . . ■■• ■ . . ■ ■ basxbao'. - i -■ bdt&98t „"T1 ■ ' ■ .V. '. . ' •.' i* . . ' 69- The methods used in the container-filling stage vary from a highly- mechanized operation with 10- and l6-ounce cartons to little mechanization in filling 30-pound tins. While the filling methods are dissimilar for different containers, for particular containers they are very similar among different plants. In large plants with long-season operation, costs of filling 10- and l6-ounce cartons are substantially less with the use of a mechanical aid in feeding cartons to the filler than with manual methods. There is little dif- ference in costs with these methods with shorti-season operation in small plants. Manual placement of sugar in 30 -pound tins as the tin is filled with straw- berries was estimated to result in higher cost than mechanical metering and mixing for all except very short seasons and low -output rates. There are three methods employed for casing consumer-size cartons. Method A uses a stapled case, manually places the cartons into the case, and manually seals the case. Method B uses a top- and bottom-glued case, manually places the cartons into the case, and mechanically seals the case. Method C uses a top- and bottom-glued case, mechanically places the cartons into the case, and mechanically seals the case. Methods A and B are nearly equal in cost for plants of all sizes for a 500-hour season. For longer seasons, method B has a cost advantage. The total seasonal costs of method C, however, are lower than for either methods A or B for all except very small plants operating short seasons. Cost estimates developed for plant cost components are brought together to estimate total plant costs. Based on the planning equations developed in this study, average processing costs are shown to decline as length of season is increased. The majority of this decline comes in the shorter seasons with the decrease in average cost being less for each additional 100 hours of annual operation as season length increases. The effect of berry quality on processing cost is especially noticeable when costs are based on packed output. Poor berry quality increases the cost of sorting a given quantity of raw product and, to obtain a given quantity of packed output, greater quantities of raw product must be run. A combination of the ability of a large plant to make more efficient use of its building, equipment, supervisory personnel, etc., and the use of various cost-reducing techniques which are economical only in large plants results in decreasing average processing cost as plant size increases. Most of the econo- mies of scale are realized by plants of 10,000-pound-per-hour capacity and very little additional decrease in average processing cost is obtained by plants of over 1 5, 000 -pound-per-hour capacity. . • ■ " -' 70. APPENDIX TABLE A Summary of Labor Production Standards for Jobs Performed in Plants Processing Strawberries for Freezing, California, 1958 Job classification and description _ — 1 Production standard units per hour Dump crate, manual Get full crate from pallet, dump, place crate on conveyor to crate washer. Dump crate, mechanical Get full crate from pallet and set on conveyor to dumper. Alternate wiun worKer on less sircnuous juu. 1,200 crates Empty crate, set off Get empty crate from conveyor and stack on pallet. 525 crates Feed 10-ounce cartons, without mechanical aids Get empty cartons from paper bag and place on conveyor to filler. 185 cases (2k cartons per case) Feed 10-ounce cartons, with mechanical aids Get empty cartons and place on bag unloader. 280 cases (2U cartons per case) Feed tins, 6^ pound iransier rouna tins <£ xo u ax. a time from paper bag to filler. 200 cases \U UXXIO pel lace/ Fill case Method A— Get case from case chute, fill, push case aside. 10-ounce cartons, 2k per case 16-ounce cartons, 2k per case 6^-pound tins, 6 per case xou c as es 120 cases 120 cases Method B — Get case from conveyor on wmcn case is niieu, in±, pusn asiue. 10-ounce cartons, 2I4 per case 16-ounce cartons, 2k per case 6-j-pound tins, 6 per case 185 cases 130 cases 130 cases Fill 30-pound tin, whole berries Get tin from can race or stack, place under spout, open spout and fill tin to proper weight, push aside lliO tins (Continued on next page.) Appendix Table A continued. 71. Job classification and description Production standard units per hour Fill 30-pound tin, sliced berries Get tin from can race or stack, place under spout, open spout and fill tin to proper weight, push aside. 155 tins Form case Method A— Get flat case from table and form, stitch case bottom, set aside to case chute. 10-ounce cartons, 2k per case 16-ounce cartons, 2h per case 6^-pound tins, 6 per case 260 cases 235 cases 235 cases Method B~ Get flat case from table and form, invert case and push bottom flaps down, set aside to conveyor or stack. 10-ounce cartons, 2k per case 16-ounce cartons, 2k per case 6f--pound tins, 6 per case 315 cases 280 cases 280 cases Method C— Get flat case from table, form, and place on casing machine. 10-ounce cartons, 2h per case 16-ounce cartons, 2h per case kkP cases kkO cases Palletize cases Method A — Apply glue to case top flaps, close flaps, and set case aside to pallet. Includes time allowance for obtaining pallets from temporary storage and for placing layer dividers between every second layer. 10-ounce cartons, 2k per case 16-ounce cartons, 2h per case 6|--pound tins, 6 per case 195 cases 175 cases 130 cases Methods B and C— Obtain sealed case from conveyor, set aside to pallet. Includes time allowance for obtaining pallets from temporary storage and for placing layer dividers between every second layer. 10-ounce cartons, 2ii per case 16-ounce cartons, 2k per case 6^-pound tins, 6 per case 3k$ cases 270 cases 130 cases Palletize 30-pound tins Place lid on tin, move tin from conveyor to pallet, place slats between layers of tins. 165 tins Stamp case Obtain bundles of flat cases from temporary storage, remove twine binding, apply one stamp per case, and transfer to case-form table (Continued on next page.) #5rwniTTi03 A otoVT ■MS 9 89SS0 <|X£ 0i93£O 0$S a9usi 0655 39ii>- 5 Olill ■ B99S0 C£t esinoo* baoiXa t nkr bnuoq-G£ Xflft 9oaIq ^oe*3 -xo ooai nso iroi! niJ i»S rti* XXJBc baa d-mqs'neqo t *tipqe mbnu . 9 Oi a« n a uq 1 3 ri §X or i oqoiq oi .fiJcr.io easo ot sfcias is? ,rx>tood ssso /lojiie 9Bfl:"; *t*| -US t 8n0J r tR0 6 0(31/0-01 33so leq 4$ ,anojiso oorr»o-?X ■ «mio'i bns aXo'si jioi** easo JeXi teO— 6 borftfsM J-ea t nwob uqsXl mot-tad rianq trie eaao iisrni .jiojate to loys'/noo oi abXaa oaso t&q iiS ,«moJ-i3o so.iuo-OX oaeo ieq iiS ,and*TBO gonx/o-dX 92j?o iaq c t Hf£ii bnuoq-^d 92so loq iiS. f.r.oiie.o oonuo-OX aaso I9q i!S ^anoiijeo &onoo-dX y% 893B0 esi^sXIeS 990X0 t aq",X'i qoi &&?o oi 90X5 xXqqA— A borfjsK a&bolonl . t9XXeq oi eb.fes ©aftq Jsa bns t aqsXl motl htm££kq §nitite$do 10I oonswoXXa stats I ■ ■ saso isq ilS ^.noiifio sonuo-OI 9SS9 i9q 42 t uiio.Jifio eonuc-dX et.p'j isq d ( 3nti bnyoq--!^ mo-fl 93co belaea nxfiicfO— 0 bos 8 eborfcteh ■■Cisioqcsjj .Toil acteXXsq §nlfl±ft#» w ^4p«=«<»-' F.l.ca., sft» n«wio^»t, «>* p^a hoiu«.. j, po-r rt 2.5 _ ^ -tor . — - « ~ — " ' <°" " ~ per 100 operating hours. g/ Includes labor, power, and Tariable repairs, h/ Job performed by "form case" worker. ft