An Optimal Product Mix Decision Model Considering Unit-Batch-Product Level Cost for Steel Plant

Abstract

In recent years, the iron and steel industry’s operation condition has been continuously worsening, profitability reducing, thus the product mix decision (PMD) for the iron and steel enterprises became research focus to reduce manufacturing costs and maximize profits. Taking into account unit-level, batch-level and product-level cost, an integrated model conducting product mix decision for steelmaking, continuous casting and hot rolling (SM-CC-HR) process was proposed in this paper. A numerical example was presented to illustrate data input, solution method and result analysis. By comparing the model with two traditional ones, it was showed that the model attained higher profit and smoother implementation, because it traced the cost appropriately and effectively reduced the volume of left slabs in manufacturing processes and that of left steel products after order-delivery.