Environmental Engineering Reference
In-Depth Information
are taken into basis and the forecasts of year 2006
are considered as the monthly demands of each
product. The battery production cost associated to
the refurbished batteries is considered as the waste
management cost of the refurbished battery. The
weekly inventory cost of a product is considered
as the selling price of the product multiplied by
the weekly interest rate which is taken as 0.4%.
The number of setup wastes changes according to
the sub-period chosen. The one-week sub-period
produces 4 setup wastes, the two-week sub-period
produces 2 setup wastes and the four-week sub-
period produces 1 setup waste per month. The
model is solved in Excel Solver for the demands
of each month. The option giving the minimum
cost is found as the four-week sub-period for each
run (In the optimal solution,
X
4
is 1 while
X
1
and
X
2
are 0). The cash flow analysis of the optimal
solution of the mathematical model and the cur-
rent system are compared in Table 3.
As shown in Table 3, the optimal solution of
the mathematical model for each month corre-
sponds to the cost associated to the sub-period
giving the optimal solution, the four-week sub-
period. When comparing net present values, it
can be seen that the four-week sub-period de-
creases costs by 95% compared to the current
system. The wastage of the semi-finished products
and the according waste management costs can
be significantly decreased with the four-week
sub-period. This alternative is an important ex-
ample showing how the operational decisions can
improve environmental problems in a company.
However, the production of a high-demanded
product in one batch may not be possible in cer-
tain cases because of the lead-time of the demands.
The operation time of a product may have a long
duration, especially when all of the monthly de-
mand is to be produced in one batch. Therefore,
the lead time of the other products waiting on the
queue will be an important constraint. In addition,
production plans must be flexible enough to meet
the unexpected demands coming from the com-
petitive environment. The scheduling of this type
of environmentally integrated production plan
may be difficult and sometimes infeasible for
companies that have to deliver products every
week.
Table 3. Comparison of cash flow analysis of the current system and the mathematical model
Optimal Solution of the Mathematical
Model
Costs (YTL/month)
Current Case
January
18.41
0.97
February
18.41
0.97
March
19.30
0.91
April
19.30
0.91
May
15.84
0.89
June
15.56
0.89
July
15.20
0.84
August
14.55
0.84
September
23.15
0.97
October
23.42
0.97
November
24.01
0.97
December
23.42
0.97
