Gartland Steel Case Study

Essay by gandhiUniversity, Bachelor'sA-, March 2004

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Executive Summary

The Gartland Steel is a fully integrated steel producer having nine plants in US. The Company has always been proactive on issues related to environmental pollution, and was placed first by the Council of economic priorities concerning pollution in steel industry. Currently, the company is concerned with bringing plant at Salem into compliance with EPA standards for particulate pollution.

Dan Crossan, Director of Environmental Engineering at Gartland Steel, has been promoting the new ?bubble? method of determining air pollution emission compliance for industrial plants. He has asked Jay Peeler, Senior Project Engineer, to give him the background information of the production process at Salem?s plant.

The objective of this report is to develop a Linear Programming model to maximise the profits under three cases, while complying with the pollution requirements. This objective is to be achieved by changing the production mix or cutting down production, such that the profits generated by sale of output and scrap is maximised, while on the other hand the pollution remains under limit.

The model has been solved using Lindo software and the output obtained is given in the Appendix along with details of variable used and basic definitions.

The maximum possible profit obtained is about US$ 168167.4 thousand when pollution limit is 5525 thousand pounds; however it reduces to 166054.1 when pollution limit is decreased to 5163 thousand pounds. On changing the production mix profit gets reduced to 161120.0., thus this course of action is not suggested. If company is able to convince government to increase the bubble limit by 1181 thousand pound by including pollution of coal and ore yards then profits increase to 166730.5 thousand dollars. Thus it is suggested that Gartland should try to get approval by government for bubble plan by including pollution from coal and ore yards.