Kumar, Rakesh, "Simulation Experiments in Corporate Planning For a Steel Plant", 1990

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Corporate planning process uses tools that are inadequate for present day environment of complexity and rapid change. Managements must supplement their intuition and experience with planning using corporate planning models. The key to assist managements to plan effectively lies in better and greater use of computerized corporate planning models. System Dynamics is one of the latest modeling innovations that provide a flexible framework in which to view the interdependent operations of a system in a coherent and orderly manner. With this in view, a modular approach using System Dynamics principles has been adopted to model an integrated steel plant. The model so developed has been applied to conduct simulation experiments in the area of corporate planning. For the purpose of modular construction the corporate model has been considered to be constituted of three modules of marketing production and finance. The production system has been taken for detailed investigation in this model. The physical flow of men, materials and machines in various capacity centers of the steel plant have been separately modeled and then integrated. The financial consequences of these flows have also been considered to simulate indicators of corporate performance such as profit and return on investment. The model has been applied to study the behavior of a large number of variables of interest in response to controllable as well as uncontrollable variables. The model has also been used to conduct “what if” type simulation experiments. It also has been used to identify debottlenecking priorities and evaluate modernization, expansion and debottlenecking projects.

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  • 1990
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