Group for Research in Decision Analysis

G-2019-75

Value-based production planning in non-ferrous metal industries: Application in the copper industry

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Production planners in the non-ferrous metal industry face an inherent combinatorial complexity of the metal production process within a fast changing market environment. Herein, we study the benefit of an integrated optimization based planning approach. We present the first value-based optimization approach for operational planning in the non-ferrous metal industry that yields high economic and technical benefits. We present a mixed integer linear program for non-ferrous metal operational production planning that covers the complexity of material flows and the entire production process and is amenable for real-time application. We give insights into the practical implementation and evaluation of our modeling approach at a plant of Aurubis, a large European non-ferrous metal producer. Our results show that an optimization and value-based production planning approach provides significant benefits, including a 38% better planning solution in practice. Besides economic benefits, we highlight the technical advantages that result from a detailed techno-economic representation of the entire production process.

, 27 pages