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 Table of Contents
 Summary
 Introduction
 Filling and weighing bags
 Handling and loading packed...






Group Title: Agricultural economics report - University of Florida Dept. of Agricultural Economics ; no. 61-10
Title: Cost of alternative methods of bagging and loading potatoes in the Southeast
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Title: Cost of alternative methods of bagging and loading potatoes in the Southeast
Physical Description: 28 p. : ; .. cm.
Language: English
Creator: Capel, G.L
Greene, R.E.L
University of Florida -- Agricultural Experiment Station. -- Dept. of Agricultural Economics
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Publication Date: 1961
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Table of Contents
    Front Cover
        Front Cover
    Table of Contents
        Page i
    Summary
        Page ii
        Page iii
    Introduction
        Page 1
    Filling and weighing bags
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
    Handling and loading packed bags
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
Full Text


Agricultural Economics
Report No. 61-10


George L. Capel
and
R.E.L. Greene


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Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida
in cooperation with
Marketing Economics Research Division
Agricultural Marketing Service
United States Department of Agriculture


March, 1961


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CONTENTS


PREFACE . . .

SUMMARY . . .

INTRODUCTION . .

Method of Study . .

FILLING AND WEIGHING BAGS

Description of Methods .

Labor Requirements. .

Burlap Bags . .
Paper Bags . .

Analysis of Costs .

Burlap Bags . .
Paper Bags . .

HANDLING AND LOADING PACKED

Description of Methods.


..ii

. . .. ii

. . .ii

. . . 1

. . . 12




. . . 3

. . . 5


. . . 5


. . . 9

BAGS. . .12

. . .12


Burlap Bags Loaded in Motor Trucks Only .14

Labor Requirements. . .. .. 14
Analysis of Costs .. . .. .16

Burlap and Paper Bags Loaded in Motor
Trucks and Rail Cars . .. ..20

Labor Requirements for Burlap Bags. .. .20
Labor Requirements for Paper Bags .22
Analysis of Costs for Burlap Bags .22
Analysis of Costs for Paper Bags. .24













PREFACE


This study is part of a project undertaken jointly by the Florida

Agricultural Experiment Station and Agricultural Marketing Service, USDA,

as a result of the changing technology in handling potatoes in the South-

east. The project is a continuation and extension of earlier regional

research on factors affecting market quality and the use of mechanical

harvesters. Two earlier reports in this series are: "Packing Costs and

Grading Efficiency in Florida and Alabama Potato Packinghouses," Agricul-

tural Economics Mimeo Report 59-7, December, 1958; and "An Analysis of

Costs for Packing Potatoes in 10-pound Bags in the Southeast," Agricultural

Economics Mimeo Report 60-6, December, 1959.


SUMMARY

This report presents a comparison of costs for alternative methods

of performing two potato packinghouse operations: (a) filling and weighing

bags and (b) handling and loading packed bags. The comparisons are based

on data obtained in potato packinghouses in Florida.

Two methods for filling and weighing bags were studied. In the

older method, the bags are filled and set off to be weighed as a separate

operation. In the newer method, workers fill the bags and simultaneously

weigh them on scales built into the filling stations. For both burlap and

paper bags, the newer method has lower costs at the annual volume levels

at which most packinghouses operate (25,000 hundredweights for firms packing

burlap and 24,000 bags for firms packing 50-pound paper bags). The cost

difference is greater for paper bags. On the average, four workers simul-

taneously filling and weighing have an output about equal to six performing

the two jobs separately.













Packed bags can be handled in at least three ways--on 2-wheel hand

trucks, conveyors, and fork trucks. In this report, costs are compared for

the hand truck and conveyor methods for loading motor trucks and rail cars,

and all three methods for loading motor trucks only. In most situations,

costs are lower for the hand truck method. An important exception is in

loading motor trucks only--the conveyor method has lower costs at average

to high annual volume levels. In other words, when trucks only are loaded,

this method has a cost advantage at the annual volume at which most packing-

houses operate. The conveyor method is well adapted to use in this situation.

However, when both trucks and rail cars are to be loaded, the hand truck

method has the lowest costs, except at the highest volume levels used in

this study. It is concluded, therefore, that in loading a combination of

trucks and rail cars, the use of hand trucks is advisable from a cost stand-

point. The fork truck method has higher costs than either of the other two

methods, although it is possible that its use would be feasible under certain

circumstances.












COSTS OF ALTERNATIVE METHODS OF BAGGING AND
LOADING POTATOES IN THE SOUTHEAST

by

George L. Capel and R. E. L. Greene


INTRODUCTION

Jobs requiring the most labor in potato packinghouses in the South-

east are those to bag and load Size A potatoes. More workers are involved

in these operations than even in grading. Packinghouse operators can be

expected, therefore, to seek ways to reduce the cost of these jobs by

reducing the amount of labor used. An indication that such attempts have

been made is the introduction of new equipment and methods for some of the

jobs. This report is concerned with two such developments.

The jobs involved are (a) filling and weighing and (b) handling and

loading packed bags. The specific purpose of this report is to compare the

relative costs of performing these jobs by the alternative methods available,

for both burlap and paper bags.


Method of Study

The first step in computing the costs presented was to determine

labor and equipment requirements for performing various jobs. This was done

by making extensive work sampling studies of the use of labor and equipment

in Florida and Alabama packinghouses. From these data, production standards
2
were computed for each job. These standards were used to determine crew


Agricultural Economist, Marketing Economics Research Division, AMS,
USDA; and Agricultural Economist, Florida Agricultural Experiment Station,
respectively.

2There were small differences in the production standards developed
from the data collected in Alabama packinghouses as compared with those for
Florida. In this report, the Florida standards are used. However, the con-
clusions would be basically the same using either set of production standards.














sizes for the appropriate output rates, and to list equipment requirements.

Labor costs were computed directly from the crew sizes, assuming currently

appropriate wage rates. Fixed and variable equipment costs were calculated

from the equipment requirements, based on replacement cost of the equipment

and electricity requirements. These data provided estimates of annual fixed

and variable costs per unit which were combined to estimate total costs for

a range of annual volume levels.


FILLING AND WEIGHING BAGS


Description of Methods

Fifty- and 100-pound bags of potatoes are filled from a bagging

table after grading. The potatoes move on the table on a wide conveyor belt.

Metal bars are placed at intervals to divert the potatoes to bagging stations

on one or both sides. At the bagging station, the potatoes move down a chute

which has positions for attaching two bags at the bottom. It is equipped with

a device to guide the potatoes into one of the bags. When the bag is filled,

a worker moves the guide to fill the other bags. He then removes the filled

bag, sets it off for subsequent handling operations and places an empty bag

on the chute.

The alternative method arises not from the layout of the bagging

table, but from the method used to determine the correct weight of potatoes

placed in the bag. The older method is to have a platform scale positioned

behind the worker at each bagging station. The worker fills the bag at the

bagging station and then sets it on the platform scale. A second worker for

each station tends the platform scales, checking the weight and removing or














adding potatoes as necessary. After checking the weight, he sets the bag

off for the next operation--bag closing.

In a newer method, the filling and weighing jobs are combined into

one operation requiring one worker per station rather than two. This combi-

nation of jobs became possible with the development of scales permitting

simultaneous filling and weighing. In filling burlap bags, the bag is

attached to a rack built on the scales which holds the bag upright and open

under the filling chute. Conversion to simultaneous filling and weighing

is simpler (and cheaper) for paper bags because they stand without support

and only have to be guided at the top by the bagging chute. Consequently,

the newer method has been adopted more rapidly by firms packing 50-pound

paper bags than those packing burlap bags.

An obvious difference in equipment requirements between these two

methods is that, for joint filling and weighing, two scales are required per

filling station rather than one. Less labor is used, however, in the newer

method because only one man is required for filling and weighing at each

station rather than two. This ratio of labor elimination is not exactly

maintained, however, because the output of each station is reduced somewhat

when filling and weighing is done simultaneously,


Labor Requirements

Burlap bags,--Labor requirements for filling and weighing 100-pound

burlap bags in the Hastings area are 0.7741 man minutes per hundredweight for

performing the jobs together and 1.1223 man minutes when they are done sepa-

rately. Corresponding figures for 50-pound bags are 1.1138 and 1.5055 man














minutes, respectively, These requirements to fill bags result in production

standards of 78 hundredweights per man hour for one man filling and weighing

100-pound bags simultaneously and 54 hundredweights for 50-pound bags. Per-

forming the jobs separately, two men can fill and weigh 107 100-pound bags

or 80 hundredweights of 50-pound bags per hour. These standards result in

the output rates by numbers of packing stations shown in Table 1. Four men

filling and weighing separately are roughly equivalent in output to three

men performing the jobs as a single function. The comparisons of costs,

therefore, were made first using four stations for combined filling and

weighing (Method A) and three for separate (Method B) and then eight and

six for the two methods, respectively.


TABLE I.--PRODUCTION STANDARDS FOR FILLING AND WEIGHING 100- AND
50-POUND BURLAP BAGS AND 50-POUND PAPER BAGS ACCORDING
TO METHODS, HASTINGS AREA AND SOUTH FLORIDA, 1956


Burlap Bags Paper Bags
Number
of 100-pound 50-pound 50-pound
Packing
Stations Method A Method B Method Aa Method B Method A Method B

- -hundredweights per hour- - 50-1b. bags per hour

2 156 214 108 160 214 260
3 234 321 162 240 321 390
4 312 428 216 320 428 520
5 390 535 270 400 535 650
6 468 642 324 480 642 780
7 546 749 378 540 749 910
8 624 856 432 600 856 1040

aFilling and weighing performed simultaneously.

bFilling and weighing performed separately.














Paper bags.--Labor requirements for filling and weighing 50-pound

paper bags are 0.5633 man minutes per bag for filling and weighing simulta-

neously (Method A) and 0.9251 man minutes for filling and weighing separately

(Method B). These labor requirements result in production standards of 107

bags per hour for Method A and 130 bags for two men working with Method B

(Table 1). In this case, again, the closest comparisons are possible between

three packing stations for Method B and four with Method A and the correspond-

ing higher rates achieved with six and eight stations, respectively.


Analysis of Costs

Burlap bags.--Fixed and variable costs of labor and equipment for

filling and weighing 100- and 50-pound burlap bags by the two methods are

shown in Table 2. Variable costs for four stations in Method A are $4.18

at an output of 312 100-pound bags per hour or 1.34 cents per bag. The

corresponding cost per hundredweight for 50-pound bags is 1.94 cents. Total

fixed cost at this rate is $411. Similar figures are shown at the higher rate

of output for Method A. Fixed costs for Method B are lower than for Method A

but variable costs are higher.

Total costs for the two methods given in Tables 3 and 4 show that

Method B has a cost advantage at the lower annual output levels, because of

low fixed costs. As volume is increased, however, Method A has lower costs

as its low variable costs offset the fixed cost disadvantage. For example,

at an annual output of 100,000 hundredweights, the difference in costs is

slightly less than $300 whether only 100-pound bags (Table 3) or a combination

of 50- and 100-pound bags are packed (Table 4). In each case, costs are equal
















TABLE 2.--ESTIMATED VARIABLE AND FIXED COSTS FOR FILLING
100- AND 50-POUND BURLAP BAGS ACCORDING TO


AND WEIGHING
METHODS


Method A Method B Method A Method B
Item 4 3 8 6
stations stations stations stations


Variable Costs

Cost per hour:
Labor $ 4.00 $ 6.00 $ 8.00 $12.00
Electricity .02 .02 .03 .03
Repairs .16 .10 .29 .17
Total $ 4.18 $ 6.12 $ 8.32 $12.20

Cost per hundredweight
(cents):
100-pound bag 1.34 1.91 1.33 1.90
50-pound bag 1.94 2.55 1.93 2.54


Fixed Costs

Replacement costs:
Bagging table $ 1748 $ 1448 $ 2989 $ 2389
Scales 1360 510 2720 1020
Total $ 3108 $ 1958 $ 5709 $ 3409

Annual fixed costs: a
Bagging table $ 231 $ 191 $ 395 $ 315
Scales 180 67 359 135
Total $ 411 $ 258 $ 754 $ 450


The total
taxes, 1.0;


aComputed as 13.2 percent of replacement costs.
percentage is comprised as follows: depreciation, 6.7;
insurance, 1.0; interest, 3.0; and fixed repairs, 1.5.

















TABLE 3.--ESTIMATED TOTAL AND AVERAGE COSTS FOR FILLING AND WEIGHING 100-POUND
BURLAP BAGS ACCORDING TO METHODS FOR VARYING ANNUAL VOLUMES


Method and Output per Hour
Annual
Volume Method A Method B Method A Method B
(cwt.) 312 321 624 642


Total Cost per Season (dollars)

10,000 545 449 887 640
20,000 679 640 1020 830
30,000 813 ,831 1153 1020
40,000 947 1022 1286 1210
50,000 1081 1213 1419 1400
75,000 1416 1690 1752 1875
100,000 .... .... 2084 2350
125,000 .... .... 2416 2825
150,000 .... .... 2749 3300
175,000 .... .... 3082 3775

Average Cost per Hundredweight (cents)

10,000 5.45 4.49 8.87 6.40
20,000 3.40 3.20 5.10 4.15
30,000 2.71 2.77 3.84 3.40
40,000 2.37 2.55 3.22 3.02
50,000 2.16 2.43 2.84 2.80
75,000 1.89 2.25 2.34 2.50
100,000 .... .... 2.08 2.35
125,000 ....... 1.93 2.26
150,000 .... .... 1.83 2.20
175,000 .... .... 1.76 2.16

















TABLE 4.--ESTIMATED TOTAL AND AVERAGE COSTS FOR FILLING AND WEIGHING A
COMBINATION OF 100- AND 50-POUND BURLAP BAGS ACCORDING TO
METHODS FOR VARYING ANNUAL VOLUMES


Method and Output per Hour--hundredweights
Annual
Volume Method A Method B Method A Method B
(cwt.)a 312 321 624 642


Total Cost per Season (dollars)

10,000 563 468 905 659
20,000 715 678 1056 868
30,000 867 888 1207 1077
40,000 1019 1098 1358 1286
50,000 1171 1308 1509 1495
75,000 1551 1833 1886 2018
100,000 .... .... 2264 2540
125,000 .... .... 2642 3062
150,000 .... .... 3019 3585
175,000 .... ..... 4108

Average Cost per Hundredweight (cents)

10,000 5.63 4.68 9.05 6.59
20,000 3.58 3.39 5.28 4.34
30,000 2.89 2.96 4.02 3.59
40,000 2.55 2.74 3.40 3.22
50,000 2.34 2.62 3.02 2.99
75,000 2.07 2.44 2.51 2.69
100,000 .... .... 2.26 2.54
125,000 .... .... 2.11 2.45
150,000 .... .... 2.01 2.39
175,000 .... .... .... 2.35


aAssumes that the total annual
100-pound bags and 30 percent 50-pound


volume consists of 70 percent
bags.














for the two methods at an annual volume of about 25,000 hundredweights,

assuming the use of the rate of output of just over 300 hundredweights

per hour. At an output of over 600 hundredweights per hour, costs are

equal at a higher point--just over 50,000 hundredweights per season. In

each case, beyond the points of equal costs, Method A has an increasing

cost advantage.

Paper bags.--Data in Table 5 show fixed and variable equipment and

labor costs for filling and weighing 50-pound paper bags by both methods.

The largest variable cost item in both cases is labor. Variable costs are

0.97 cents per bag for Method A, but 1.56 cents for Method B. Total fixed

costs are about $350 and $650 for the four and eight stations, respectively,

in Method A. Fixed costs for Method B are lower than for Method A.

Total costs per season, combining fixed and variable costs, are

shown in Table 6. At both rates of output Method B has lower costs at the

lower total season volumes. However, this advantage decreases as annual

volume is increased. Costs are equal for the lower output rates at a season

volume of about 24,000 bags and at the higher output rate, at about 47,000.

In each case, beyond the point of equal costs the advantage increases for

Method A. For example, using an eight station organization with Method A

at 200,000 bags per year, the advantage in costs is about $900. At the

lower rates of output--four stations for Method A at 100,000 bags, the

cost advantage of Method A is about $450.

















TABLE 5.--ESTIMATED VARIABLE AND FIXED COSTS FOR FILLING AND WEIGHING
50-POUND PAPER BAGS ACCORDING TO METHODS


SMethod A Method B Method A Method B
Item 4 3 8 6
stations stations stations stations


Variable Costs

Cost per hour:
Labor $ 4.U0 $ 6.00 $ 8.00 $12.00
Electricity .02 .02 .03 .03
Repairs .14 .08 .25 .14
Total $ 4.16 $ 6.10 $ 8.28 $12.17

Cost per 50-pound
bag (cents) 0.97 1.56 0.97 1.56

Fixed Costs

Replacement costs:
Bagging table $ 1348 $ 1148 $ 2189 $ 1789
Scales 1360 510 2720 1020
Total $ 2708 $ 1658 $ 4909 $ 2809

Annual fixed costs:a
Bagging table $ 178 $ 152 $ 289 $ 236
Scales 180 67 359 135
Total $ 358 $ 219 $ 648 $ 371


aComputed as 13.2 percent of replacement costs. The total
percentage is computed as follows: depreciation, 6.7; taxes, 1.0;
insurance, 1.0; interest, 3.0; and fixed repairs, 1.5.

















TABLE 6.--ESTIMATED TOTAL AND AVERAGE COSTS FOR FILLING AND WEIGHING 50-POUND
PAPER BAGS ACCORDING TO METHOD FOR VARYING ANNUAL VOLUMES


Method and Output per Hour (50-pound bags)
Annual
Volume Method A Method B Method A Method B
(bags) 428 390 856 780


Total Cost per Season


10,000
20,000
30,000
40,000
50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000


455
552
649
746
843
1086
1328
1570

*.. *
... *


375
531
687
843
999
1389
1779



...


(dollars)


745
842
939
1036
1133
1376
1618
1860
2103
2346
2588
2830


527
683
839
995
1151
1541
1931
2321
2711
3101
3491
3881


Average Cost per


4.55
2.76
2.16
1.86
1.69
1.45
1.33
1.26



,* e
... *


3.75
2.66
2.29
2.11
2.00
1.85
1.78



* o.
*.. *


50-pound Bag (cents)


7.45
4.21
3.13
2.59
2.27
1.83
1.62
1.49
1.40
1.34
1.29
1.26


10,000
20,000
30,000
40,000
50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000


5.27
3.42
2.80
2.49
2.30
2.05
1.93
1.86
1.81
1.77
1.75
1.72


---~~ -~-- '---


Id i i m m I i v
















HANDLING AND LOADING PACKED BAGS

Three basic methods were studied for handling and loading packed

bags. These were (a) hand truck, (b) conveyor, and (c) industrial fork

truck. All three methods were observed in use for handling burlap bags

in packinghouses that loaded motor trucks only. Only the first two were

observed for handling burlap or paper bags to both motor trucks and rail

cars.

Description of Methods

In each method, the bags are filled, weighed, and securely closed

in some manner, as described in the previous section of this report.

Methods used for these operations are independent of selection of the

methods used to handle packed bags. In handling burlap bags in the hand

truck method, workers are stationed adjacent to the bag sewers to stack

the bags annually on the trucks. For paper bags, the bag tier performs

this function. The hand truck operator positions the empty truck for

convenient loading. Four 100-pound or eight 50-pound bags are a typical

load. The hand truck operator pushes the loaded truck to where it is to

be unloaded. This might be a temporary storage point or in a motor truck

or rail car. Workers are assigned to remove the bags manually from hand

trucks and place them in storage or in the load.

In the conveyor method, bags are moved from the filling stations

to the load by a conveyor system. The system is designed to run adjacent

to the filling stations. To minimize labor required, this part of the system

should be at floor level to simplify placing the bags on the conveyor.















At the loading end of the system, provision is usually made for positioning

the end conveyor as nearas possible to the actual point where the bags are

to be placed. In trucks this is done with a standard extension conveyor.

In rail cars this is difficult because the flow of bags must turn after

entering the door of the car. No method was observed which made this turn

and transported the bags to the end of the car. Loaders were required to

carry the bags from the car door to the spot where they were to be placed

in the loaJl.

Workers are stationed at the filling stations to place burlap bags

on the conveyor, but this is done by the bag tier for paper bags. The

number of workers required for this operation depends on the way the

system is arranged. If conveniently located and installed at floor level,

the number can be held to a minimum. In some cases it was possible for

bag sewers to perform this operation with only a moderate decrease in the

production standard for sewing. Workers are also needed in some cases to

prevent bags from falling from the conveyor on turns. Again, this depends

on the arrangement of the system. Loaders are stationed in the motor truck

and rail car to take bags from the conveyor and to place them in the load.

These workers also move the conveyors as required in loading and in shifting

from one truck or car to another. Conveyor systems were observed in use for

loading burlap bags in motor trucks only, and in both motor trucks and rail

cars. In all cases where paper bags were packed, provision was made for

both truck and rail car loading.

For the fork truck method, industrial fork trucks are used for

transporting packed bags from the filling stations to the load. The use















of fork trucks requires that the bags be stacked on pallets, which are not

used in any of the other methods. Workers are stationed at the filling

stations to place the packed bags on the pallets. These workers also obtain

and place the empty pallets for loading. Loaded pallets are transported to

storage or to the load on the fork trucks. The only use of fork trucks

observed was in loading burlap bags in motor trucks under a physical arrange-

ment which prohibited the fork truck from entering the truck. Therefore, the

fork truck operator set the loaded pallet down on a low dolly at the rear of

the truck. Loaders then pushed the pallet to the spot where the bags were

to be placed in the load. Actual loading was done the same as in the other

methods.


Burlap Bags Loaded in Motor Trucks Only

Labor requirements.--Labor requirements and production standards for

performing various jobs in handling 100- and 50-pound burlap bags are shown

in Table 7. These data are for handling to motor trucks only, which modifies

some of the figures from those for handling to both trucks and rail cars. The

standard for setting bags on hand trucks is 265 100-pound bags per hour but

only 157 for setting on pallets. Two workers are required in each method when

packinghouses are operated at about 300 hundredweights per hour. In an effi-

cient arrangement of the conveyor system, the job of setting bags on the

conveyor can be done by sewers by slightly increasing the labor requirements

for sewing. In this case, the number of sewers would have to be increased by

one, when operating at about 300 hundredweights per hour. Or one worker could

be added to work only at setting bags on the conveyor.




















TABLE 7.--PRODUCTION STANDARDS FOR HANDLING 100- AND 50-POUND BURLAP BAGS
FROM THE PACKING LINE TO THE LOAD FOR TRUCK LOADING ONLY


100-pound Bags 50-pound Bags

Job Man minutes Output Man minutes Output
per hundred- per man per hundred- per man
weighta hour weighta hour

minutes cwt, minutes cwt.

Hand truck method:

Set bag on hand
truck .2265 265 .3871 155
Hand truck .4741 127 .7169 84
Load from hand
trucks .2636 228 .4356 138

Fork truck method:

Set bags on pallets .3819 157 .5639 106
Drive fork trucks .1885 318 .1885 318
Load from pallets .4800 125 .6960 86

Conveyor method:

Load from conveyor .2759 217 .3236 185

a
Includes an allowance for nonwork time.

Assumes distance of 40 feet between packing and loading areas.










16


Loading from hand trucks requires less labor than that for either of

the other two methods. In the conveyor method, loaders do more walking,

because conveyors do not extend the entire length of the motor truck. In

loading from pallets, loaders must spend part of their time moving them from

the rear of the truck to the place where loading is done. Under the system

observed, it was impossible for the fork truck to enter the motor truck. In

addition, loaders are required to handle empty pallets.

The methods differ greatly in the amount of labor required to move

potatoes to the load. To operate at about 300 hundredweights per hour with

the hand truck method, three hand truckers are needed. In the fork truck

method, one truck operator is required. No labor is required in the conveyor

method for handling from the time the bags are placed on the conveyor until

they reach the loading point.

Analysis of costs.--The fixed and variable costs for handling 100-

and 50-pound burlap bags of potatoes to the load and for loading motor trucks

only are shown in Tables 8 and 9. In the hand truck method, labor costs are

higher than for either of the other two methods. Labor comprises the major

share of variable costs. Repair costs are a significant item for the conveyor

method. Electricity costs are high for the fork truck method because of

recharging the batteries which power fork trucks; and for the conveyor

method because a large amount of electricity is required to operate conveyors.

Fixed costs are low for the hand truck method, but are relatively

high for the other two. In the conveyor method, a large investment in the

conveyor system results in high fixed costs. In the fork truck method, fork

truck rental is the large item.

















TABLE 8.--ESTIMATED VARIABLE COST PER HOUR FOR TRANSPORTING AND LOADING
100- AND 50-POUND BURLAP BAGS OF POTATOES INTO TRUCKS BY
SELECTED METHODS AT TWO RATES OF OUTPUT


Low Rate of Outputa


Labor
Electricity
Repairs
Total

Variable cost per
cwt. (cents)c


$ 7.000
.014
7.014

$ 7.014
2.48


$ 3.000
.075
.152
$ 3.227


1.14


$ 6.2500
.0670
.0075
$ 6.3245


2.23


High Rate of Outputa


Labor
Electricity
Repairs
Total

Variable cost per
cwt. (cents)


$13.000

.027
$13.027


2.30


$ 6.000
.150
.304
$ 6.454


1.14


$12.5000
.1340b
.0150
$12.6490


2.23


aThe low output rate is approximately equal to that attained
with a four-station bagging table using simultaneous filling and weighing,
and the high is about equal to the eight-station bagging table.

bAdapted from: R. K. Bogardus and S. W. Burt, Loading Out Fruits
and Vegetables in Wholesale Warehouses, U. S. Department of Agriculture,
Marketing Research Report 282, March, 1959.

CThis assumes that the total output is made up of 70 percent
100-pound bags and 30 percent 50-pound bags.















TABLE 9.--ESTIMATED REPLACEMENT AND FIXED COSTS OF EQUIPMENT FOR TRANSPORTING
AND LOADING 100- AND 50-POUND BURLAP BAGS OF POTATOES BY SELECTED
METHODS AT VARYING RATES OF OUTPUT


Low Output Rate High Output Rate

Replace- Annual Replace- Annual
Item ment Fixed ment Fixed
Cost Cost cost Cost


Hand Truck Method

Hand trucks $ 270 $ 45 $ 546 $ 89

Conveyor System

Conveyor system $2946 $ 485 $5880 $ 970
Built-up floor 100 12 200 23
Total $3040 $ 497 $6080 $ 993

Fork Truck Method

Fork truck a $ 500 a $ 900
Pallets $ 150 40 $ 300 80
Total $ 540 $ 980


aThe fork truck would be rented for the
assuming that it would be kept for two months.


indicated annual costs,


Total labor and equipment costs for all three methods are shown in

Table 10. At lower volume levels the hand truck method has lower costs

because of low fixed costs. As volume increases, cost differences decrease

until, at a volume of about 34,000 hundredweights (at the low output rate),

costs for the two methods are equal. For the high output rate, this point

is reached at about 78,000 hundredweights. Beyond these points costs are

lower for the conveyor method. The fork truck method has higher costs at

all volume levels.
















TABLE 10-;--ESTIMATED TOTAL AND AVERAGE LABOR AND EQUIPMENT COSTS FOR TRANS-
PORTING AND LOADING 100- AND 50-POUND BURLAP BAGS OF POTATOES IN
TRUCKS ONLY FOR VARYING ANNUAL VOLUMES


Low Output Rate High Output Rate
Annual
Volume Hand Con- Fork Hand Con- Fork
(cwt.)a Truck veyor Truck Truck veyor Truck
Method Method Method Method Method Method


Total Cost per Season (dollars)

10,000 293 611 763 319 1107 1203
20,000 541 725 986 549 1221 1426
30,000 789 839 1209 779 1335 1649
40,000 1037 953 1432 1009 1449 1872
50,000 1285 1067 1655 1239 1563 2095
75,000 1905 1352 2213- 1814 1848 2653
100,000 .... .... .... 2389 2133 3210
125,000 .... ... .... 2964 2418 3768
150,000 .... .. .... 3539 2703 4325

Average Cost per Hundredweight (cents)

10,000 2.93 6.11 7.63 3.19 11.07 12.03
20,000 2.70 3.62 4.93 2.74 5.10 7.13
30,000 2.63 2.80 4.03 2.60 4.45 5.50
40,000 2.59 2.38 3.58 2.52 3.62 4.68
50,000 2.57 2.13 3.31 2.48 3.13 4.19
75,000 2.54 1.80 "2.95 2.42 2.46 3.54
100,000 ... .... .... 2.39 2.13 3.21
125,000 ........ ... 2.37 1.93 3.01
150,000 .... ..... 2.36 1.80 2.88


aAssumes that total output
bags and 30 percent 50-pound bags.


is made up of 70 percent 100-pound














For this specialized type of operation--truck loading only--the

conveyor method seems to have a distinct advantage. The volume level at

which its costs are lower are those at which most firms operate. The

fork truck method seems to have a limited place. In addition to the handi-

cap of higher costs, fork trucks can be used only when the proper type of

floor is available. If this type of floor is not already available, its

construction would have to be considered as an added cost. This was not

done.in this study. Of course, if a firm owns a fork truck primarily for

use.in another operation, the cost disadvantage would be drastically reduced.

Even so, it is unlikely that costs for handling with fork trucks would be

lower than for either of the other methods. The fork truck method has the

advantage ihat its use is adaptable to temporary storage of a large portion

of the output. Palletizing of the bags permits storage with little extra

labor, although some extra pallets would be required. In each of the other

methods, storage can be done only with considerable extra labor.


Burlap and Paper Bags Loaded in Motor
Trucks and Rail Cars

Labor requirements for burlap bags.--Labor requirements and produc-

tion standards for performing various jobs in handling 100- and 50-pound

burlap bags of potatoes to the load and loading into motor trucks and rail

cars are presented in Table 11. Setting bags on hand trucks and loading

from hand trucks are jobs which are not changed by loading rail cars in

addition to motor trucks. Pushing of hand trucks has a different standard

because longer trucking distances are required. Motor trucks can be moved,

from the loading dock immediately after loading is completed. This is















TABLE 11.--PRODUCTION STANDARDS FOR HANDLING 100- AND 50-POUND BURLAP BAGS
AND 50-POUND PAPER BAGS FROM THE PACKING LINE TO THE LOAD FOR
PACKINGHOUSES LOADING TRUCKS AND RAIL CARS.


Burlap Bags 50-pound
Paper Bags
100-pound bags 50-pound bags

Man Out- Man Out- Man Output
Job minutes put minutes put minutes per
per per per per per man
hundred- man hundred- man bag hour
weighta hour weighta hour

minutes cwt. minutes cwt. minutes bags

Hand truck method:

Set bag on hand
truck .2265 265 .3871 155 b b
Hand truck .5641 106 .8369 72 .5311 113
Load from hand
trucks .2636 228 .4356 138 .1661 361

Conveyor method:

Load from conveyor ,4077 147 .6116 98 .3212 187


alncludes an allowance for nonwork time.

bin packinghouses handling paper bags, this job was combined with
other work.

cAssumes distance of 100 feet between packing and loading areas.


almost always done. Loaded rail cars are generally moved away only once

daily, which means that long loading platforms are required along rail

sidings. The greater the number of cars loaded daily, the longer the hand

trucking distance. The average production standard determined for hand

trucking 100-pound burlap bags was 106 bags per hour. This is about 83 per-

cent of the standard for hand trucking to.motor trucks only.















Loading from a conveyor requires more labor when loading rail cars

because the conveyors extend only to the car door and not to the end of the

car. This necessitates considerable walking by the loaders. Therefore,

the production standard for loading a combination of motor trucks and rail

cars is 147 100-pound bags per hour or about 65 percent of the standard

for loading trucks only. More idle time is required in the loading crew

because the labor requirements actually changes as the car is filled.

This is true because less walking has to be done as loading progresses.

Labor requirements for paper bags.--Labor requirements and produc-

tion standards for performing various jobs in handling packed 50-pound

paper bags are alsoL shown in Table 11. The job of placing bags on hand

trucks or on conveyors is performed in the same way in each method, by

the bag closing crew. Hand trucking constitutes a large part of the

handling crew, as evidenced by the production standard of 113 50-pound

bags per hour. This standard is relatively high because in South Florida

a larger proportion of the output is loaded in rail cars, necessitating

longer hand trucking distances than is usual when loading trucks only.

Production standards for loading from conveyors is high becausemof the

walking time required of loaders, especially when loading rail cars.

Analysis of costs for burlap bags.--The fixed and variable costs

for handling 100- and 50-pound burlap bags of potatoes to the load and

loading both rail cars and motor trucks are shown in Table 12, In the hand

truck method, variable costs are higher as more labor is required. Electric-

ity and repair costs are a significant item of costs for the conveyor method

















TABLE 12.--ESTIMATED VARIABLE AND FIXED LABOR AND EQUIPMENT COSTS FOR TRANS-
PORTING AND LOADING 100- AND 50-POUND BURLAP BAGS OF POTATOES IN
TRUCKS AND RAIL CARS BY SELECTED METHODS AT
VARYING RATES OF OUTPUT


Low Output Ratea High Output Ratea

Hand Hand
Item Truck Conveyor Truck Conveyor
Method System Method System


Variable Costs

Cost per hour:
Labor $8.000 $4.000 $15.000 $8.000
Electricity .... .120 ...... .240
Repairs .018 .240 .032 .480
Total $8.018 $4.360 $15.032 $8.720

Cost per hundredweight
(cents): 2.83 1.54 2.66 1.54

Fixed Costs

Replacement costs:
Hand trucks $ 360 .... $ 630 ....
Conveyor system ... $4698 ... $9396
Built-up floor ... 100 ... 200
Total $ 360 $4798 $ 630 $9596

Annual fixed costs:
Hand trucks $ 59 ... $ 104
Conveyor system ... $ 775 ... $1550
Built-up floor ... 12 ... 23
Total $ 59 $ 787 $ 104 $1573


aThe low output rate is equal approximately to that attained with
a four-station bagging table using simultaneous filling and weighing; and
the high is about equal to the eight-station bagging table.

bAssumes that thettotal output is made up of 70 percent 100-pound
bags and 30 percent 50-pound bags.















because of the amount of these items required to operate conveyors. Annual

fixed costs are much higher for the conveyor method, because of,::the corre-

spondingly higher investment in equipment.

Total labor and equipment costs for the two methods are shown in

Table 13. Because of lower fixed costs for the hand truck method, total

costs for this method are much lower at low annual volume levels than for

the conveyor method. As annual volume is increased, the relative difference

in costs between the two methods decreases, until costs are slightly lower

at the highest volume shown in the table. It is questionable whether the

use of the conveyor method is justified under these circumstances. Another

reason to question use of the conveyor method is that most packinghouses

use one or more workers to transfer bags manually between segments of the

conveyor. In such cases, costs would be higher than shown in this report.

For example, for a packinghouse packing about 75,000 hundredweights a

year using the conveyor method, the cost for one additional worker would be

$260.

Analysis of costs for paper bags.--Fixed and variable costs for

handling 50-pound paper bags are shown in Table 14. Variable costs per bag

are considerably higher for the hand truck method. Labor costs are twice

as large for this method as for the conveyor method. On the other hand,

annual fixed charges are much higher for the conveyor method because of the

large investment required in facilities. Also, high labor costs in the hand

truck method are moderated, to some extent, by materially lower costs for

electricity and repairs.

















TABLE 13.--ESTIMATED TOTAL AND AVERAGE LABOR AND EQUIPMENT COSTS FOR TRANS-
PORTING AND LOADING 100- AND 50-POUND BAGS OF POTATOES IN TRUCKS
AND RAIL CARS AT VARYING ANNUAL VOLUMES


Low Output Rate High Output Rate
Annual
Volume Hand Truck Conveyor Hand Truck Conveyor
(cwt.)a Method System Method System


Total Cost per Season (dollars)

10,000 342 941 370 1727
20,000 625 1095 636 1881
30,000 908 1249 902 2035
40,000 1191 1403 1168 2189
50,000 1474 1557 1434 2343
75,000 2182 1942 2099 2728
100,000 .... .... 2764 o 3113
125,000 .... .... 3429 3498
150,000 .... .... 4094 3883

Average Cost per Hundredweight (cents)

10,000 3.42 9.41 3.70 17.27
20,000 3.12 5.48 3.18 9.41
30,000 3.03 4.16 3.01 6.78
40,000 2.98 3.51 2.92 5.47
50,000 2.95 3.11 2.87 4.69
75,000 2.91 2.59 2.80 3.64
100,000 .... .... 2.76 3.11
125,000 .... .... 2.74 2.80
150,000 .... .... 2.73 2.59


percent 100-pound


aAssumes that the total output is made up of 70
bags and 30 percent 50-pound bags.

















TABLE 14.--ESTIMATED VARIABLE AND FIXED LABOR AND EQUIPMENT COSTS FOR TRANS-
PORTING AND LOADING 50-POUND PAPER BAGS OF POTATOES IN TRUCKS AND
RAIL CARS BY SELECTED METHODS AT VARYING RATES OF OUTPUT


Low Output Ratea High Output Ratea

Hand Hand
Item Truck Conveyor Truck Conveyor
Method System Method System


Variable Costs

Cost per hour:
Labor $6.000 $3.0000 $12.000 $6.0000
Electricity ..... .1050 ...... .2100
Repairs .018 .2206 .036 .4412
Total $6.018 $3.3256 $12.036 $6.6512

Cost per bag (cents): 1.41 0.78 1.41 0.78

Fixed Costs

Replacement costs:
Hand trucks $ 360 .... $ 720 ....
Conveyor system ... $4411 .. $8822
Total $ 360 $4411 $ 720 $8822

Annual fixed costs:
Hand trucks $ 59 ... $ 119 ....
Conveyor system ... $ 728 ... $1456
Total $ 59 $ 728 $ 119 $1456


aThe low output rate is equal approximately to that attained with
a four-station bagging table using simultaneous filling and weighing; and
the high output rate is about equal to that attained with an eight-station
bagging table.
















Total labor and equipment costs for the two methods are combined

in Table 15. Low fixed costs for the hand truck method result in lower

total costs for this method than for the conveyor method. At annual

volumes more nearly in line with those observed in packinghouses, the

difference in costs is not great, but the hand truck method still has

an advantage. Only at the highest volume shown in the table does the

conveyor method have lower costs. As in the case of handling burlap bags,

few packinghouses were able to operate the conveyor methods without one

or more workers manually transferring bags between conveyors. Where this

labor is required, costs for the conveyor method would be increased to the

extent that they would be higher than for the hand truck method at all

annual volume levels used in this study. The use of conveyors, therefore,

seems to be as questionable a practice for truck and rail loading of

paper bags as for burlap bags.


















TABLE 15.--ESTIMATED TOTAL AND AVERAGE LABOR AND EQUIPMENT COSTS FOR TRANS-
PORTING AND LOADING 50-POUND PAPER BAGS OF POTATOES IN TRUCKS
AND RAIL CARS BY SELECTED METHODS AND OUTPUTS
AT VARYING ANNUAL VOLUMES


Low Output Rate High Output Rate
Annual
Volume Hand Truck Conveyor Hand Truck Conveyor
(bags) Method System Method System


Total Cost


200
341
482
623
764
1116
1469
1822


per Season


806
884
962
1040
1118
1313
1508
1703


Average Cost per Bag (cents)


10,000
20,000
30,000
40,000
50,000
75;000
100,000
125;000
150,000
200,000
250,000


2.00
1.70
1.61
1.56
1.53
1.49
1.47
1.46


GLC/bh 4-10-61
Ag. Econ. Exp. Sta.
850 copies


(dollars)


10,000
20,000
30,000
40;000
50,000
75,000
100,000
125,000
150,000
200,000
250,000


260
401
542
683
824
1176
1529
1882
2234
2939
3644


1534
1612
1690
1768
1846
2041
2236
2431
2626
3016
3406


8.06
4.42
3.21
2.60
2.24
1.75
1.51
1.36


2.60
2.00
1.81
1.71
1.65
1.57
1.53
1.51
1.49
1.47
1.46


15.34
8.06
5.63
4.42
3.69
2.72
2.24
1.94
1.75
1.51
1.36




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