Analytical study and cost modeling of secondary aluminum consumption for alloy producers under uncertain demands
Name
289463835-MIT.pdf
Description
Full printable version
Size
10.26 MB
Format
Adobe PDF
Checksum (MD5)
0797afb001a4b9c061ef0748e96a0141
Author(s)
Li, Yaoqi
Advisor(s)
Randolph Kirchain.
Date Issued
2008
Publisher
Massachusetts Institute of Technology
Abstract
A series of case studies on raw materials inventory strategy for both wrought and cast aluminum alloy productions were conducted under recourse-based modeling framework with the explicit considerations of the demand uncertainty compared to the traditional strategy based on point forecast of future demand. The result shows significant economic and environmental benefits by pre-purchasing excess amount of cheaper but dirtier secondary raw materials to hedge the riskier higher-than-expected demand scenario. Further observations demonstrate that factors such as salvage value of residual scraps, cost advantage of secondary materials over primary materials, the degree of the demand uncertainty, etc. all have direct impacts on the hedging behavior. An analytical study on a simplified case scenario suggested a close form expression to well explain the hedging behavior and the impacts of various factors observed in case studies. The thesis then explored the effects of commonality shared by secondary materials in their application in multiple final products. Four propositions were reached.
Description
Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Materials Science and Engineering, 2008.
Includes bibliographical references (p. 93-96).
Subjects
Materials Science and Engineering.
MIT Department
Massachusetts Institute of Technology. Department of Materials Science and Engineering
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