Using multistage stochastic optimisation to manage major production incidents

Margaret Armstrong (), Alain Galli and Rija Razanatsimba
Additional contact information
Margaret Armstrong: CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique
Alain Galli: CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique
Rija Razanatsimba: CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: A mining company has entered into contractual commitments to supply certain quantities to clients in each time period. The planned production would be sufficient unless major problems that interrupt production occur. To overcome these difficulties, the Company may be able to obtain more of the commodity: from its strategic stockpile (if there is sufficient there), by buying it on the spot market or for some commodities such as gold and uranium, by leasing it. Two sources of uncertainty, the spot price of the commodity and the occurrence of serious production incidents are considered. Multistage stochastic programming with recourse was used to solve this problem, because in addition to providing the dollar value of the project, it gives decision-makers the 'roadmap' to reach the optimal value. A case study over a 5-year period is used to illustrate the proposed procedure.

Keywords: Multistage programming; Accidents; Strikes; Delays in permitting; Natural disasters; Stockpiles; Spot market; Lease market (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Mining Technology, 2012, 121 (3), pp.125-131. ⟨10.1179/1743286312Y.0000000010⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00771482

DOI: 10.1179/1743286312Y.0000000010

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().