Abstract
Article history: Received 1 June 2010 Received in revised form 10 September 2010 Accepted 14 September 2010 Available online 14 September 2010 During the past three decades there have been tremendous efforts on building steel factories on economic scales. The primary question is to find an economic scale for such plants which could also meet domestic demand. In this paper, we perform an empirical survey to find out whether building small steel factories are more suitable or setting up giant steel industries to meet regional demands. The results indicate that in many countries, building small steel plants based on the recent advances of technologies not only reduces the total cost of steel production but also it could significantly reduce the unnecessary transportation cost, providing cheaper labor, etc. This would lead to better competition which would increase the productivity. © 2010 Growing Science Ltd. All rights reserved.
Highlights
The new millennium started with many incidents in the world which hurt the growth on global economics
We have studied the impact of small-cap steel industry for developing countries
The results of this survey have indicated that this kind of business could significantly help us increase the productivity on steel industry
Summary
The new millennium started with many incidents in the world which hurt the growth on global economics. From the infamous incident of September, 11, 2001 to turmoil in global market started from real-state in US economy. The supply chain management of big steel producers normally requires them to place their orders for raw materials four to six months in advance. This lag in a bear market could create significant troubles for steel producers since the price of steel could drop, significantly. This bullwhip effect often hurts big steel producers much more than small mini mill producers (Wu, D-Y., & Katok, 2006)
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