Cost analysis of two techniques of grading sizing and packing Red Delicious apples in North Central Washington

Graduation date: 1967This study originated with industry recognition of inadequate\ud flexibility in currently used procedures for grading, sizing, and\ud packaging fresh apples in North Central Washington. Field-run apples\ud are introduced into the process, and nearly all of the product must\ud be placed in a marketing package in the process. Portions of the\ud output products are stored for a 12-month marketing period. Frequently\ud during this marketing period there are changes in the types\ud of packaging demanded. In recognition of this problem, research has\ud developed prototype equipment for performing a presorting and presizing\ud function. Presorted and presized apples could be returned to\ud bulk bin storage for later selective market preparation. This study\ud provides cost information on the application of this new procedure\ud that should be useful to managers of packing plants.\ud The principal objective of the study is to determine how the\ud application of the new procedure would affect the production-point\ud marketing margins. An intermediate objective is to establish\ud industry structure and trends that might relate to the application of the new procedure. Cost analysis is limited to those operating\ud input costs that would likely be affected by the application of the\ud new procedure.\ud An economic-engineering method of analysis is used to measure\ud the relative efficiency of the old and new techniques. A sample of\ud four representative apple packing lines was analyzed for rate of\ud output in standard operating periods (eight-hour shifts) and for\ud average costs per unit of output in these periods. Cost per unit of\ud output associated with integrating the presorting and presizing\ud function into the process was estimated. Operating and cost models\ud were developed for both the standard packing line and the new method.\ud From analysis of standard packing line operation, it was concluded\ud that presorting and presizing the 50 per cent of the total seasonal\ud volume with the lowest quality would improve the rate of product\ud output on standard packing lines. This is the basis for estimating\ud operating and cost models of the new technique. Models are based on\ud annual seasonal output volumes of 210,000, 28O,000 and 350,000 boxes\ud (42 pounds of apples per box). These volumes represent a majority\ud of the larger packing plants in North Central Washington.\ud Average operating input costs per unit of output increase due to\ud the application of presorting and presizing. The increase was approximately\ud $ .025 per unit of output. This is one per cent of the average\ud production-point marketing margin. Application of the new method\ud would not increase the economic efficiency of this specific phase of\ud grading, sizing, and packing fresh apples. The application of presorting and presizing and integration with\ud the current packing line procedures in apple packing plants in North\ud Central Washington could result in total cost savings in individual\ud plants through the more efficient use of storage facilities. Approximately\ud 20 per cent more product can be stored in refrigerated storage\ud or modified atmosphere refrigerated storage in bulk form in bins as\ud compared to finished product storage. Presorting and presizing 50\ud per cent of the field-nm product would also result in greatly improved\ud flexibility in adapting to the market. The relatively small\ud additional cost of application of this presorting and presizing\ud function would improve the efficiency of many larger apple packing\ud plants. The economic value would vary with each plant. Individual\ud plant variables that should be analyzed are total seasonal volume and\ud trends, storage capacity, current packing line efficiency, and\ud marketing program