Coal stockpile: how much is enough. How much is too much
Companies that stockpile coal often maintain a 60 to 90 days' supply during periods of relatively stable supply and 100 to 120 days' supply during periods of anticipated strikes by miners/railroad workers. This paper describes a procedure that can be used to (1) estimate the probabilities and durations of strikes, (2) calculate the cost of stockpiled coal, (3) calculate the cost of incurring the effects of a coal shortage, and (4) determine which will provide adequate supplies of coal more economically: a stockpile or contingency plans. The Delphi Method is used periodically to poll experts on the company's coal vendors and coal carriers and derive either consensus figures or a pessimistic-optimistic range of figures which translate into probability distributions of strike durations and cost of contingency plans. After the probability distributions have been prepared, the service level percentile to be achieved by the stockpile is used to predict the strike duration associated with that percentile and the cost of contingency plans associated with that percentile. It is then possible to calculate whether it would be cheaper to (1) stockpile enough coal to provide for the company's needs at the desired service level (2) implement the contingency plans when (and if) the need arises. The paper provides an easy-to-follow example and examines practical considerations of the Delphi questionnaire, probability distributions, and stockpile adjustments.
- Research Organization:
- Holston Defense Corp., Kingsport, TN
- OSTI ID:
- 5013289
- Report Number(s):
- CONF-810538-
- Journal Information:
- Am. Inst. Ind. Eng., Detroit Chapter, Proc. Annu. Conf.; (United States), Journal Name: Am. Inst. Ind. Eng., Detroit Chapter, Proc. Annu. Conf.; (United States); ISSN AIDPA
- Country of Publication:
- United States
- Language:
- English
Similar Records
Users: stockpile coal to hedge '84 strike risk
3.5 D temperature model of a coal stockpile
Related Subjects
013000* -- Coal
Lignite
& Peat-- Transport
Handling
& Storage
015000 -- Coal
Lignite
& Peat-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294001 -- Energy Planning & Policy-- Coal
CALCULATION METHODS
CARBONACEOUS MATERIALS
COAL
COST
ENERGY SOURCES
FOSSIL FUELS
FUELS
MATERIALS
STOCKPILES
STORAGE