Production structural cost optimization

As a starting point for structural cost optimization, Clariant first of all has an optimized production network design that leverages scale effects and regional advantages. Second, a review of truly value-creating functions, processes, and process steps is performed on a regular basis. 

Structural cost optimizations are achieved via the design of production networks and value chains... 

Chemicals Have Become More Global than Ever 244 Competition from Low-cost Labor Countries Is Changing the Industry Landscape 244 Challenges and Responses 246 Structural Cost Optimization 247 Designing a Global Production Network 247 Focusing on Distinctive Value Creation 248 Operational Cost Optimization 249... 

Plastics offer the opportunity to optimize RP design by focusing on material composition in conjunction with reinforcement orientation, as well as product structural geometry. This interrelation affects processing methods, product performances, and costs. This action also gives the designer great flexibility and provides freedom not possible with... 

The objective of using a mathematical optimization model is to identify network design alternatives that best exploit structural cost differences between various locations and resolve trade-offs between different cost elements such as production cost advantages and additional transporta-tion/tariff costs. Therefore, relationships expressing the costs that will be incurred as a function of cost drivers (decision variables of the model) have to be established. A proper creation of these cost functions is a critical success factor of the overall analysis (cf. Shapiro 2001, p. 234 Vidal and Goetschalckx 1996, p. 13). 

Then, the optimal payment scheme is characterized as the one that induces the second best production policy p (t) according to the differential piece rate and inventory penalty of Theorem 6. If the production cost function g p) is strictly convex, then p is the unique optimal production plan for the agent. If g p) is linear, then the second best policy p is an optimal response for the agent, but not the unique optimal response following standard practice in the economics literature, we assume that the agent will cooperate with the principal by selecting the second best policy. Structural properties of the second best production policy and optimal compensation scheme are discussed in Plam-beck and Zenios (2002). 

During the last few years process synthesis by algorithm methods have made considerable progress. The problem of chemical process synthesis can be stated as follows given a set of reactants with amounts specified, determine both the cost-optimal structure and the optimal design variables of each process unit that can produce a set of specified products. In general, the process synthesis problem can be expressed as a MINLP problem where the integer and continuous variables occur nonlinearly in the performance index. The mathematical form is ... 

Just as we can refine the structure to optimize the amount of material that is required (and its cost), we can also refine the specifications to further optimize the cost of the material being used. This refinement involves product specifications and material specifications. 

The problem of optimizing production from several plants with different cost structures and distributing the products to several distribution centers is common in the chemical industry. Newer plants often yield lower cost products because we learn from the mistakes made in designing the original plant. Due to plant expansions, rather unusual cost curves can result. The key cost factor is the incremental variable cost, which gives the cost per pound of an additional pound of product. Ordinarily, this variable cost is a function of production level. 

The example presented in section 6.4 of this chapter showed that process synthesis can be applied to structured food products. Moreover this application is of true value since significant cost savings could be achieved. However, a complete methodology is not yet available. One of the main outstanding questions is how to perform the identified (necessary) tasks in an optimal sequence to obtain the desired product Besides this the success of application depends critically on the availability of domain knowledge about all relevant aspects of the process. Several factors relevant for food processing were not considered in this example ... 

Fathi-Afshar, S. and Yang, J. (1985) Designing the optimal structure of the petrochemical industry for minimum cost and least gross toxicity of chemical production. Chemical Engineering Science, 40, 781. 

Synthetic Pyrethroid Insecticides. Elucidation of the chemical structures of the naturally occurring pyrethrum esters, their rapid and selective insecticidal action, and their high cost stimulated the search for effective synthetic derivatives (13,17,21). Since the 1940s, structural optimization has produced an array of broad-spectrum insecticides with activity 10- to 20-fold greater than other types of insecticides, and with extended residual action. These synthetic pyrethroids have become one of the most important classes of insecticides with world annual production estimated at 6000 t (21). 

In principle these compounds offer access to materials with AliCh-SiCL and Al203 2Si02 stoichiometries. The latter stoichiometry is equivalent to the Al[OSi(OBu-t)3 (OBu-t)] precursor. The major drawbacks with these materials are their air and moisture sensitivity, and the cost of the starting materials. Although the idealized stoichiometries of the above ceramics products are not those of crystalline aluminosilicates, amorphous aluminosilicate glasses are often important in optical applications or in scratch-resistant coatings. Furthermore, they may offer potential for CVD-type applications. There still remains considerable need for simple precursors to crystalline aluminosilicates, especially for structural applications. Dense, phase pure crystalline ceramic materials are desired for optimal mechanical properties, e.g. ceramic fibers for composite manufacture. 

In a retrofit batch design, we optimize the batch plant profitability defined as the total production value minus the cost of any new equipment. The objective is to obtain a modified batch plant structure, an operating strategy, the equipment sizes, and the batch processing parameters. Discrete decisions correspond to the selection of new units to add to each stage of the plant and their type of operation. Continuous decisions are represented by the volume of each new unit and the batch processing variables which are allowed to vary within certain bounds. 

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