Key Parameters for the Analysis Stage of Internationalization of Operations

Goal: The main purpose of this work is to develop several production planning models for one of bottle grade PET production plants (in Turkey) under different scenarios by considering different levels of inventory (no stock and different levels of safety stocks), different energy sourcing alternatives (natural gas/coal or both) and production throughput (different lot sizes). Design/Methodology/Approach: Deterministic multi-product multi-period single level mixed integer linear programming model is presented. The model is implemented for the above defined scenarios. We have also considered the total emission produced for different energy alternatives. Results: The models for the different scenarios have shown that significant performance improvements can be achieved by changing the parameters/policies of the production. The best model obtained has yielded 6.6% of profit improvement and 6.9% of cost reduction. Limitations of the investigation: Planning horizon of this work could cover the data of years 2014 to 2018. However, the actual data employed for this study is limited with one year due to unavailability of further data. In addition to this, improvement of current production planning approach of the plant by implementation of proposed model is one of the objectives of this study to see success rate of model. Though, this couldn’t be realized. We hypothetically tested the improvement provided by the proposed model, therefore we can’t analyze the actual improvement. Practical implications: Interactions among optimal results obtained by running model with different scenarios and their effect on selected performance variables are the main contribution of this work. Similar methodology could be used at other PET resin manufacturing plants or alternatively the production facilities having similar type of continuous manufacturing processes to find their optimal levels of inventory, production throughput and proper choice for energy sourcing alternative. Originality/Value: The research on the production planning for PET resin industry by considering the different scenarios (levels of inventory / energy sourcing alternatives/ production throughput) is novel as far as we know, and therefore the approach used in this study is expected to be useful for other similar plants.

Section: Problem Definiton and Methodologymentioning

confidence: 91%

Evaluation of the Production Planning Policy Alternatives in a Pet Resin Production Plant: a Case Study From Turkey

Demirkan

Durmuşoğlu²

2020

“…The multinational chemical corporation has developed an international operations strategy, doing business worldwide, supported by its subsidiaries located in 70 countries. The international operations strategy includes building local manufacturing facilities in different countries, that are part of a multisite production network configuration, supported by global suppliers (Grillo et al,2018).…”

Section: Business and Corporate Strategic Plansmentioning

confidence: 99%

A sales and operations planning application in the Brazilian subsidiary of a multinational chemical company

Seeling

Scavarda

Thomé

2019

Goal: the goal of this paper is to investigate how Sales and Operations Planning (S&OP) is conducted in the Brazilian subsidiary of a global corporation of the chemical industry that manufactures and commercializes a variety of hygiene and cleaning consumer products. Design/Methodology/Approach: the case study approach was adopted. Data was gathered during four months by means of visits to the organization for direct observation, interviews with key executives, and internal and public documents, guaranteeing data triangulation. A well-known framework from the literature is applied to analyze the S&OP practices performed by the organization. Results: Findings contribute to aid in the understanding of the S&OP process. The case study indicates that S&OP has been a central process to organize and to align the enterprise’s efforts and deliver its business objectives. Limitations of the investigation: the research is conducted within one single company, a Brazilian subsidiary of a multinational chemical corporation, which limits the generalization of the findings. Practical implications: The research findings enhance the knowledge about S&OP providing practitioners with valuable information to understand better its phenomenon, such as how the process is performed, and the best practices and benefits. Originality/Value: S&OP has been an object of interest of scholars and practitioners for decades. However, the process is far from being completely understood and there is a call for more empirical studies. Thus the academic literature can benefit from this in-depth research that sheds light on an S&OP industry application.

“…As most part of the literature advocates, the main objective of companies should be the creation of a system in which managers make investments that maximize the long-term value of their companies (Porter, 1991;Cooper et al, 2001;Grillo et al, 2018). In order to analyze project options, it is necessary to verify whether the economic analysis of investments is centered on the elaboration of a cash flow that reflects all the inflows and outflows of the firm's resources, that is, the elaboration of an estimative of both revenue and benefits when considering the costs of a new project (Lambrecht, 2017;Andalib et al, 2018).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

The real options method applied to decision making – an investment analysis

Benitez¹,

Lima²

2019

Goal: This study aims to assess the impact of using the method of real options in investment analysis through a case study on a retail firm. Design / Methodology / Approach: It was targeted the applications of the real options method in a different type of environment and it was compared to another method more commonly used, the discounted cash flow method (DCF). The implementation and assessment of the real options method was investigated by means of a case study conducted in an investment analysis in a retail units firm. Results: The use of the real options method showed a more concise applicability over the DCF method. The results show that the project’s value, after the inclusion of managerial flexibility, increased significantly, which indicates that the analysis of the discounted cash flow undervalued the investment in question, since it disregarded the flexibility to expand or abandon the project. Limitations of the investigation: The presented method is proper to long-term processes where it is possible to make changes during the project. Investments in this sector usually are more related to short and medium-term decisions, making the application difficult due to the short decision-making period available to the managers. Practical Implications: The study provided the incorporation of flexibility through different pathways during the building project in a retail units firm. It was showed different scenarios where practitioners could decide among expanding, proceeding, reducing or abandoning the retail units based on the characteristics of their investments. Originality/value: The results obtained are an indication of this methodology to industrial businesses that are relatively volatile and that need a certain degree of flexibility in order to burgeon, such as the case of the retailing sector.