No abstract

This paper describes a simulation study of production operations and process-related costs in a multiproduct chemical plant. The study was carried out as the central constituent of a business re-engineering project. The aim was to develop a simulation model, employing the SiMPLE++ simulation software, that can generate a detailed production schedule and the corresponding resource allocation for a plant producing high volumes of phosphate. The production is order-driven and the final products, with slight variations in their chemical specifications, are sold to customers worldwide. Each order has to be completed within a narrow time frame. The main performance criteria in evaluating the plant operations are considered to be fulfilment of order quantities and due dates as well as the capacity utilization of key production units. Moreover, the simulation model provides an authentic assessment of operational expenses by determining product-and order-related costs, according to the activitybased cost accounting system, and by identifying the major cost drivers. Hence, this method constitutes an effective support tool for strategic decisions regarding individual products and operational capacities.