Integrated purchasing and production planning for a non-Ferrous metal production network

Abstract

Non-ferrous metal producers usually face a high number of planning alternatives due to the high complexity of the planning and production processes in global multi-plant networks. So far, no optimization-based planning approach exists that captures this complexity by considering purchasing and raw material shipments as well as the allocation of material flows in the network while securing a multitude of plant-specific process restrictions. In this paper, we develop a generalized integrated purchasing and production planning model that captures all these characteristics. We apply this model to an industrial case study for a copper production network of the Aurubis AG. Based on this case study, we highlight the economic benefits of integrated purchasing and production planning as well as the allocation of material flows in the multi-plant production network. Our results show a significant improvement of the total contribution margin and underline the benefits of the presented approach.