Optimisation of Ingot Margins

Collaborators:

Comalco
QUT

(pdf 341kB)

Brief

Problem
Comalco produces and sells ingots, which can be sold/ allocated across countries/ customers and sourced from any Comalco smelter or purchased. Depending on the cost of freight and destination country, the commodity return is different. The commodity margin reflects the total premium for commodity minus the total selling and distribution costs. The margin can vary depending on the site the metal has come from and its destination. The objective is to maximise the total profit. Shipping cost, sales cost, trade cost, sales income and trade income are considered. The followings aspects are also considered in the problem as well: the individual shipments that filled each sales order; the amounts sold from smelters to traders and the amounts bought from traders; and a tabular format the amount in metric tonnes sent from smelters, to each destination, on each ship, of each freight and product type.

Solution Approach
A binary programming technique is used to solve the model.

Product
Microsoft Excel based user interface integrated with premium solver software. The macro has set up the solver model from the data given.

Significance
Efficient dispatching and production of ingots.