Year 2002
Olli Ylä-Jarkko

Modeling the Technical Age of a Pulp Mill

Technical age describes the overall technical state and competitiveness of a mill. Technical age increases over time and decreases as a result of rebuilds. The term is used for comparison of different mills and for the calculation of some specific performance indicators. The present calculation method divides the pulp mill into six sections and department-specific rebuilds into three categories. The objective was to create a new model in which the mill is divided into smaller sections each contributing to the technical age of the whole mill. In addition to the enhanced technical age calculation model, an objective was to create a mathematical model for evaluating the monetary value of the rebuild based on the technical information.

In the theoretical part of the thesis, modeling and the applications of modeling and simulation in the pulp and paper industry are presented. The investment behavior of the industry and the factors affecting rebuild decisions at mill level are also discussed. In addition, a pulp mill is described department-by-department and important performance indicators are discussed.

The empirical part of the study began by determining the investment cost structure of a pulp mill. The analysis was based on an investment calculation model used by the company and on pulp mill feasibility studies and implementation projects. Based on the investment cost structure, specific weighting coefficients for different rebuilds were determined using nonlinear optimization. The reduction in technical age can be calculated by multiplying the weighting coefficients. A model between the investment costs and reduction in technical age was also developed in the empirical part. Models were developed for the mill and for each department separately.

As a result, an application tool was developed for the use of the company. A new database with a user interface was created to store the data required by the calculation model. Next, a calculation program connected to the database, was developed. The application can be attached to the other applications used by the company.

The results of the study offer particular benefits for the preparation of competitiveness and comparative analyses. Because of incomplete raw data, the estimation of investment costs based on technical details contains factors causing uncertainty. However, the ultimate goals of the study were met.

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