Production Planning Using Day-Ahead Prices in a Cement Plant

Cement production is an energy-intensive process. The cost of energy constitutes more than 60% of the cost of the cement; hence cement plants have to consider minimizing the cost of energy when planning production. However, there are several challenging issues regarding the production plan. First, there are some operational constraints for the production process itself, such as keeping a proper level of inventory. Second, electricity prices are not fixed; they change on an hourly basis. Hence the cost of the electricity consumed may change substantially depending on the time of production. In this study, we developed a mixed integer programming model to minimize the cost of production (including energy, labor, and storage) by shifting working times to hours with low energy costs and trying to maintain activities during hours with high energy costs.