Modeling mine units as activity-based profit centers

Conference · Tue Dec 31 04:00:00 EST 1996

OSTI ID:525988

Grayson, R L ^[1]

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1. West Virginia Univ., Morgantown, WV (United States)

Now that mine operators have built an experience in managing their cost performances very tightly in response to the ultra-competitive coal market, activity-based cost monitoring tools are in demand. This paper presents an activity-based linear programming methodology for scheduling unit production (or other) activity with concomitant output of projected consumptions of manpower, supplies, materials, etc., as well as the unit-related costs associated with the activity-based consumptions. The modeling establishes the various mine units as profit/cost centers which then become responsive to a cost control philosophy adopted by management. Comparisons can be made among units, which when coupled with production unit conditions and productivity levels, whether similar or dissimilar, highlight the differences among unit cost performances. It is a simple extension to couple statistical process control techniques with such a model to monitor cost fluctuations in a systematic manner. Example data from a formerly operating mine is used to demonstrate and validate the technique for underground production units. A second example is given to demonstrate how a preparation plant can be converted into a profit center as well. It focuses on maximization of profit by modeling revenues and cost factors associated with various levels of coal processing for meeting the demands and specifications for both metallurgical and steam coal customers.

• OSTI ID: 525988
• Report Number(s): CONF-960664--
• Country of Publication: United States
• Language: English

Related Subjects

01 COAL, LIGNITE, AND PEAT
99 GENERAL AND MISCELLANEOUS
COAL MINING
COST
ECONOMICS
LINEAR PROGRAMMING
MANAGEMENT
MANPOWER
MARKET
PROCESS CONTROL
PRODUCTIVITY