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Maximization of profit through optimal selection of inventory levels and production rates in pulp and paper mills.

Application: The methodology offers a new technique to help mill managers meet production targets while minimizing costs.

A new methodology named "PARIS" (Production Analysis for Rate and Inventories Strategies) can help mill managers in planning the production of the mill departments. This methodology takes into account all the critical parameters, including prices of utilities and raw materials, storage limitations, production capacities of each department, customer orders, and customer service targets. The objective is to meet the production targets over a future time horizon while minimizing the total manufacturing cost.

PARIS splits the time horizon into several periods and formulates an MILP (mixed integer linear programming) problem. It is based on a complete model of the mill, which includes all the departments, from the woodyard operations to the power plant and the paper machines. Detailed mass and energy balances describe the relationships between the different process variables. Another set of equations describes the constraints, which can be either physical limitations of the system or user-defined constraints.

The objective function is formulated to describe in a realistic manner the total cost throughout the time horizon, including the production costs, inventory costs, shutdown costs, and shortage losses. The solution of the optimization problem gives the optimal values of the free variables, which describe the utilization of each mill department in each period, the inventory levels at the end of each period, the optimal resource allocation, and the optimal shutdown scheduling.

Benefits to the mill include better utilization of facilities, increases in throughput, reductions in production and inventory costs, improvements in customer service, and smoother production. PARIS is customized according to the specific mill's needs and can be integrated in a user-friendly interface for quick and easy data manipulation.

Sarimveis and Bafas are with the National Technical University of Athens, Dept. of Chemical Engineering, 9, Hereon Polytechniou str., Zografou Campus, Athens 15780, Greece. Angelou and Retsina are with American Process Inc., 817 West Peachtree St., Suite M105, Atlanta, GA 30308. (Email: hsarimv@central.ntua.gr or theodora@apiweb.com)
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Title Annotation:Methodology
Author:Bafas, George
Publication:Solutions - for People, Processes and Paper
Date:Jul 1, 2003
Words:335
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