Managing costs of an industrial enterprise when using secondary resources

Authors

DOI:

https://doi.org/10.15587/1729-4061.2020.208764

Keywords:

industrial enterprise, cost management, secondary resources, cost optimization, linear programming

Abstract

Cost price reduction is one of the ways to improve the competitiveness of products. It is possible by establishing the set of factors affecting the production costs at an industrial enterprise and building on this basis a mathematical model of in-house cost management.

The study objective was to develop and substantiate an economic-and-mathematical model of management to minimize the enterprise costs taking into account the utilization of secondary resources obtained in the production of basic products. The model consists of two stages. At the first stage, full costs of production of basic and additional products are determined. The peculiarity of this production implies the generation of significant amounts of secondary resources that have both independent value and opportunities for their use in the main technological process. This leads to complex material flows within the production process, which were accounted for in the study with the help of an adapted "cost-output" balance model.

A plant can function with the use of a variety of raw materials which differ in both prices and rates of the output of basic products and secondary resources. This brings about the problem of finding an optimal combination of input resources to minimize costs or maximize profits. The problem is solved in the second stage. It is formalized as a linear programming problem. It features the provision of the ability to establish indicative plans of production of both main products and by-products.

The model was tested on the example of coke-chemical plants producing coke of KDM-2 grade with 6 % humidity content and KDM-1 grade coke of improved quality as the main products. Coke oven gas, coke fines, beans, and sludge are produced as by-products. After purifying the coke oven gas, it is further used in the production of heat and electricity, compressed air, and a fuel for coke ovens. Thus, the produced fuel and energy, utilizable material resources, and circulating water supply are secondary resources. A certain portion of by-products is sold to third parties.

When applied, the model will make it possible to improve the efficiency of cost management at enterprises

Author Biographies

Diana Raiko, National Technical University «Kharkіv Polytechnic Institute» Kyrpychova str., 2, Kharkiv, Ukraine, 61002

Doctor of Economic Sciences, Professor

Department of Economic Cybernetics and Marketing Management

Olha Podrez, National Technical University «Kharkіv Polytechnic Institute» Kyrpychova str., 2, Kharkiv, Ukraine, 61002

Postgraduate Student

Department of Innovative Entrepreneurship Management and International Economic Relations

Viktoriia Cherepanova, National Technical University «Kharkіv Polytechnic Institute» Kyrpychova str., 2, Kharkiv, Ukraine, 61002

PhD, Associate Professor

Department of Innovative Entrepreneurship Management and International Economic Relations

Oleg Melnikov, National Technical University «Kharkіv Polytechnic Institute» Kyrpychova str., 2, Kharkiv, Ukraine, 61002

PhD, Associate Professor

Department of Economic Cybernetics and Marketing Management

Alla Kharchenko, National Technical University «Kharkіv Polytechnic Institute» Kyrpychova str., 2, Kharkiv, Ukraine, 61002

PhD, Associate Professor

Department of Economic Cybernetics and Marketing Management

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Published

2020-08-31

How to Cite

Raiko, D., Podrez, O., Cherepanova, V., Melnikov, O., & Kharchenko, A. (2020). Managing costs of an industrial enterprise when using secondary resources. Eastern-European Journal of Enterprise Technologies, 4(3 (106), 53–65. https://doi.org/10.15587/1729-4061.2020.208764

Issue

Vol. 4 No. 3 (106) (2020): Control processes

Section

Control processes

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Copyright (c) 2020 Diana Raiko, Olha Podrez, Viktoriia Cherepanova, Oleg Melnikov, Alla Kharchenko

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