While attention in the iron and steel industry has been focused on the study and analysis of the flow of materials through the main productive units (blast furnaces, steel works, and rolling mills), the analysis of this flow through the nonproductive units (the mixer and soaking pits) is generally over looked. These two units would create serious bottle necks in production if their capacities were not properly determined before being installed. This paper considers the soaking-pit/rolling-mill complex as a queueing system in which the soaking pits are viewed as units circulating a cyclic queue, and the rolling mill as the service station. A simulation model representing the pit-mill system is developed: (1) To predict the improvement in the capacity of the system through adding more pits (2) To predict the effect of breakdowns and mainte nance or the shutdown of a pit. Several criteria, including their economic aspects, are used to measure the performance of the system. The optimal capacity of the system is determined such that an economic balance between the cost of service and the cost of waiting for that service is achieved.