Improving coal sales profit by alternative blending processes

Abstract

The purpose of this research is to improve coal sales profit by alternative coal blending process. The main objective of this research is to improve operational profit of the company by developing alternative coal blending process across 2 coal mines from various raw coal qualities to get coal products to be matched with customers’ requirement. The study consists of two main parts that are the planning part and the calculation of alternative blending part. The planning part begins with gathering all information, classifying coal quality, identifying limitation, and creating blending model. The second stage is calculation of alternative blending part starts from assessing impacts of revenue and cost from changing operation process, preparing new blending calculation model for new blending plan, and then study of sensitivity of main factors, coal price and oil price. The result of best blending plan show the profit from new blending is 42.3 million US$ which higher than profit of original plan which is 33.7 million US$. The company can get more profit about 25.6 percent compared with profit from original plan. Moreover, the result sensitivity study of coal price and oil price has confirmed that profit from alternative blending process is higher than original plan even though these two factors are changed up to 50 percent.