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Maximizing Profit in Mining Operations

The document provides information about a mining company that operates three mines and extracts four minerals from each mine. It includes tables with data on mineral extraction amounts, mineral prices, excavation and processing capacities and costs for each mine. An LP is to be formulated to maximize the company's daily profit by deciding how to allocate minerals for raw material sales or producing four types of plaques, including sending minerals to a third party facility.

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Arda Sarica
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10 views1 page

Maximizing Profit in Mining Operations

The document provides information about a mining company that operates three mines and extracts four minerals from each mine. It includes tables with data on mineral extraction amounts, mineral prices, excavation and processing capacities and costs for each mine. An LP is to be formulated to maximize the company's daily profit by deciding how to allocate minerals for raw material sales or producing four types of plaques, including sending minerals to a third party facility.

Uploaded by

Arda Sarica
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

1.

6 Production Process Problems

Production Process Problems Q.1 - Production Process in Mining *** (MÇ, 2021)

Findelo Mine Inc. is a mining and plaque producer company that operates in three mines.
From each of the mines, four minerals are extracted with varying richness levels. Table 1
provides information on how much from each mineral can be extracted per ton of processed soil
in each mine, and sales prices (in thousand dollars) of raw minerals per ton in the market. The

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extraction process can be roughly summarized in two steps. In the first step, soil is excavated by
means of a large excavator and loaded to trucks to be moved to a central elimination facility in
each mine. The central elimination facility is used commonly by all mines. Since the hardness
of the soil varies in each mine, the excavated soil per hour in each mine and processing speeds of
soil from each mine in the elimination facility also varies, as presented in Table 2, together with

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excavation and elimination costs of mines per ton of soil processed. Each day, the excavators can
work for 16 hours in each mine, and elimination facility works in a 24/7 basis. Besides selling as
raw minerals, these minerals are used to produce 3 different types of plaques. Table 3 provides

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the requirements of each type of plaque in terms of minerals in them, in addition to the sales
prices of each plaque per ton. A final option is to send minerals to a larger facility owned by a

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third party, to produce a fourth type of plaque. This type of plaque requires a ratio of 0.25 of
all minerals, with a 30 thousand dollars cost of additional processing raw materials per ton and

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a sales price of 600 thousand dollars per ton. However, this plaque requires a more complicated
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chain of processes including additional heating and dissociation phases, which reduces the mass

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of the processed materials by approximately 20%. The owner of the facility also dictates that
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Findelo should sell them each type of minerals as much as half of the amount processed for
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plaque type 4, with a 10% discount. Formulate an LP that maximizes the company’s daily
ta

profit.
tt

Table 1
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Mine 1 Mine 2 Mine 3 Price


Mineral A 0.1 0.15 0.08 500
ha
us

Mineral B 0.3 0.25 0.1 350


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Mineral C 0.2 0.3 0.2 200


Mineral D 0.1 0.1 0.4 200
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Table 2
M
m

Mine 1 Mine 2 Mine 3


Excavation capacity per hour 20 22 16
ci

Excavation cost per ton 100 150 80


m

Elimination capacity per day


280 240 300
(if dedicated to one mine)
r.

Elimination cost per ton 10 8 20


Table 3
D

Plaque 1 Plaque 2 Plaque 3


Mineral A 0.5 0.2 0.1
Mineral B 0.3 0.2 0.4
Mineral C 0.1 0.3 0.5
Mineral D 0.1 0.3 0
Price 450 380 400

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