How much additional pulp could be produced and dried, given possible capacity increases to the dryer? How high can be the dryer capacity to increase until no further benefits is realized? Appleton Corporation is one of the largest forest products companies in the world, converting trees into 3 basic product groups:
(1) building materials such as lumber and plywood;
(2) white paper products including printing and writing grades of white paper;
(3) brown paper products, such as liner board and corrugated containers. Given highly competitive markets within the forest products industry, survival dictates that Appleton maintains its position as a low-cost producer of quality products. That requires an ambitious capital program to improve the timber base and to build modern, cost effective timber conversion facilities. An integrated pulp and paper mill is a facility in which wood chips and chemicals are processed to produce paper products or dried pulp. First, wood chips are cooked and bleached in the pulp mill, resulting pulp is piped directly into storage tanks as shown in Exhibit 10.14. From the storage tanks the pulp is sent to either the paper mill or a dryer. In the paper mill, the pulp is routed to one or more paper machines, which produce the finished paper products. Alternatively, the pulp is sent to a dryer and the dried pulp is then sold to a paper mills that do not have the capability of producing their own pulp. The total system is large facility costing several hundred million dollars.
One of Appleton’s major pulp and paper facilities consists of a pulp mill, 3 paper machines and a dryer. As the facility developed, the pulp mill was found to produce more pulp than the combination of paper machines and the dryer could use. The pulp mill has a capacity of 940 tons per day (TPD), the 3 paper machines together average 650 TPD of pulp use, and the dryer can handle 200 TPD. One question of interest is whether it would be worthwhile to invest in improvements to increase the capacity of the dryer. Managers realized that all equipment in the mill is subject to downtime and to variations in efficiency. For example, suppose that on one day the pulp mill is inoperable for more than the average length of time and the paper machines are having less than the usual downtime. In this case, very little pulp would be available for the dryer, regardless of its capacity.
The back of pulp would not “average out: on days when the opposite condition occur, as much more pulp would be available than the pulp dryer could handle. Consequently, the pulp storage tanks would become full, and the pulp mill would have to shut down. Thus, the decision to increase the capacity of the dryer cannot be made without considering pulp production. Further studies determined the following information about the capacities of the components integrated pulp and paper mill.Pulp Mill: The pulp mill is assumed to have an average production rate of 1,044 TPD when operating, with an average of 10% downtime. The actual downtime varies. For example, one day the pulp mill might be down 2% of time, the next day 20% and so on.
Paper Machines: The rate of pulp flow to the paper machines in a time period is a function of the type of paper being made and the amount of downtime on the paper machines. The rate of pulp flow depends on the schedule of types of paper to me made. The average is 650 TPD, but varies between 500 to 800 TPD. Each machine’s downtime average 5% of the total working hours.Pulp Dryer: The capacity of the dryer is assumed to be 200 TPD. Dryer downtime average 15%.Storage Tanks: The connecting link between the pulp mill, the paper machines, and the dryer is the pulp storage tanks. In the model, all pulp produced by the pulp mill is added to the inventory in the tanks. All pulp drawn by the dryer and paper machines is subtracted from the inventory. If the storage tanks are empty, the model must shut down the paper machines. If the tanks are full, the pulp mill must be shut down. The actual rate at which the dryer is operated at any moment must be set by the plant manager to try to keep the storage tanks from becoming “too empty” or “too full”.