Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

8.7 Scenarios and Exercises

Intended learning outcomes: Differentiate between batch production and continuous production. Calculate an example of manufacture of by-products. Elaborate an example of production planning in process industries.

8.7.1 Batch Production versus Continuous Production

As a producer of fine chemicals, you plan to introduce a new type of solvent to the market. It is suitable for use in the production of ad­hesives for the automobile industry. The corporate marketing department estimates that 5000 to 10,000 tons of the product can be sold per year. The product design with laboratory tests has been completed. But the industrial production concept for the product remains to be determined. While most of the production processes are actually done on the batch principle (discontinuous or batch production), your engineers now suppose continuous production for this product.

a.    What are the differences between these two concepts? What criteria are important for the decision for one or the other of these concepts?

b.    What is your suggestion regarding the new solvent? Explain the reasons for your decision.



In selecting the appropriate production principle, the following points have to be considered:

  • Production volume and regularity of demand
  • Need for flexibility
  • Requirements in terms of proof of origin and quality control
  • Technological conditions and safety requirements


In the case of the solvent, the preferred principle could be continuous flow production. The production volume is of adequate size for small facilities for continuous production. Furthermore, it can be assumed that the consumption of the new product will run relatively regularly. At least a proof of origin is not necessary.

8.7.2 Manufacture of By-Products

In the production of 300 kg per hour of an active substance for the manufacturing of photo­graphic paper, 20 tons of sewage water accrue per day. The sewage flow is contaminated with an organic dissolver, which is needed for the production of the active substance. The purchase price of the dissolver is $1.30 per kg. The current production process has about 6000 operating hours per year and runs on the principle of continuous production. The sewage water needs to be disposed of as waste product. Because of dissolver contamina­tion of approximately 5 % (mass percent), extra costs of $5.50 per m3 are caused in comparison to wastewater without organic impurities.

On the basis of thermodynamic calculations and laboratory tests, it was estimated that it would be possible to separate almost all of the dissolver by adding a simple distillation column as a further process step. For the distillation, 80 kg heating steam (cost: $20 per ton) is needed per m3 of sewage water. The regained dissolver can be reintroduced into the production process without any additional effort.

Problem: The plant engineer now attempts to estimate how much money can be invested in the distillation device, if management sets a limit of 2 years maximum for payback on this kind of investment. Can you help?


  • 6000 operating hours equals 250 days (continuous production!)
  • 20 * 250 = 5000 tons of sewage water accrued per year
  • Loss of dissolver: 250 t/a, → savings from recovery: $325,000 / a
  • Savings from lower cost for wastewater treatment: $27,500 / a
  • Additional cost for heating steam: $8000 / a
  • Total savings: $344,500 per year
  • Payback time: max. 2 years → about $689,000 available for investment

8.7.3 Production Planning in Process Industries

For the production in a three-step batch process of 500 tons of an active substance for use in pharma­ceutical products, chemical reactors of different sizes come into operation. Figure describes the production sequences with batch size and yield in each process step. Please note that the figure does not show a mass balance or a bill of material.

Fig.        Batch size and yield in each process step for an active substance.

Problem: Determine the needed quantity of feed product and the required number of batches per stage for the production of the desired quantity of the active substance. Please be aware that only complete batches can be produced.


  • Production quantity of active substance: 500 t
  • Stage 3:
    • Yield: 89 % → demand for A*: 562 t
    • Batch size: 4.5 t → number of batches: 124.9 → 125
    • → Actual demand for A*: 562.5 t
  • Stage 2:
    • Yield: 78 % → demand for A: 722 t
    • Batch size: 6.2 t → number of batches: 116.5 → 117
    • → Actual demand for A: 725.4 t
  • Stage 1:
    • Yield: 95 % → demand for feed product: 764 t
    • Batch size: 16.5 t → number of batches: 46.3 → 47
    • → Actual demand for feed product: 775.5 t

Course sections and their intended learning outcomes

  • Course 8 – The Concept for the Process Industry

    Intended learning outcomes: Produce characteristics of the process industry. Disclose processor-oriented master and order data management. Explain in detail processor-oriented resource management. Describe special features of long-term planning.

  • 8.1 Characteristics of the Process Industry

    Intended learning outcomes: Explain divergent product structures and by-products. Describe high-volume line production, flow resources and inflexible facilities. Produce an overview on large batches, lot traceability, and loops in the order structure.

  • 8.2 Processor-Oriented Master and Order Data Management

    Intended learning outcomes: Produce an overview on processes, technology, and resources. Present the process train: a processor-oriented production structure. Disclose lot control in inventory management.

  • 8.3 Processor-Oriented Resource Management

    Intended learning outcomes: Explain campaign planning. Differentiate between processor-dominated Scheduling and material-dominated scheduling. Describe a nonlinear usage quantity and a product structure with loops.

  • 8.4 Special Features of Long-Term Planning

    Intended learning outcomes: Disclose the determination of the degree of detail of the master production schedule. Describe pipeline planning across several independent locations.

  • 8.5 Summary


  • 8.6 Keywords


  • 8.7 Scenarios and Exercises

    Intended learning outcomes: Differentiate between batch production and continuous production. Calculate an example of manufacture of by-products. Elaborate an example of production planning in process industries.

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