Production optimisation - case of foundry factory
by Matjaž Novak; Boris Čuk; Rok Strašek
International Journal of Sustainable Economy (IJSE), Vol. 5, No. 4, 2013

Abstract: Production optimisation is the major objective of any production process and it is tightly related to long term sustainable development of any production factory. Among production optimisation frameworks the overall equipment efficiency (OEE) methodology is the most popular one. However, this methodology approaches production optimisation only from the technology point of view and ignore the economic perspective of optimisation. This article develops case study approach to compare two different methodological approaches which relate technical and cost efficiency. The first framework is based on econometric techniques and regression analysis. The second one is based on mathematical modelling. Basic difference between both is related to the explanation power of model used. Econometric approach allows error term and consequently only regression relationship between technical and cost efficiency. Mathematical modelling requires definition relationship between technical and cost efficiency. To take the decision of which framework is preferable we apply both methodological approaches in the case of foundry industry. Our results select mathematical modelling with key performance indicator overall cost efficiency (OCE) framework as preferable methodological approach to production optimisation.

Online publication date: Mon, 31-Mar-2014

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Sustainable Economy (IJSE):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com