Reference no: EM131284002

The wheat harvesting season in the American Midwest is short, and most farmers deliver their truckloads of wheat to a giant central storage bin within a two-week span. Because of this, wheat-filled trucks waiting to unload and return to the fields have been known to back up at the receiving bin. The central bin is owned cooperatively, and it is to every farmer's benefit to make the loading/storage process as efficient as possible. The cost of grain deterioration caused by unloading delays, the cost of truck rental, and idle driver time are significant concerns to the cooperative members. Although farmers have difficulty quantifying crop damage, it is easy to assign the waiting and unloading costs for truck and driver of $20 per hour. The storage bin is open and operated 16 hours per day, 7 days per week, during the harvest season and is capable of unloading 18 trucks per hour. Full trucks arrive all day long (during the hours the bin is open) at a rate of 16 per hour. The cooperative uses the storage bin only two weeks per year. Farmers estimate that enlarging the bin would cut average service time by 40% next year. It will cost $200,000 to enlarge the bin during off-season. How long will it take the farmers to recoup those cost cooperatively through waiting cost savings?