The Ohio State University, Ph.D., 1966 Business Administration
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This dissertation has been microfilmed exactly as received 67-2483 MAGGIO, Ralph Anthony, 1927- A SIMULATION MODEL FOR OPEN HEARTH STEEL- MAKING. The Ohio State University, Ph.D., 1966 Business Administration University Microfilms, Inc., Ann Arbor, Michigan A SIMULATION MODEL FOR OPEN HEARTH STEEUMAKING DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Ralph Anthony Maggio, B.A., M.B.A., M.Sc. ******* The Ohio State University 1966 Approved by \ E ________ Organization PLEASE MOTE: Not original copy. Several pages have indistinct print. Filmed as received. University Microfilms, Inc. ACKNOWLEDGMENT The author wishes to express his sincere appreciation to the members of his committee, consisting of Drs. Frederick E. Kindig, Chairman, Jimmie L. Heskett, and Richard A. Tybout, for their valuable advice and guidance in the preparation of this dissertation. In ad dition, the personal assistance and encouragement given to the author by his many friends in the United States steel industry is responsible," in large measure, for the effort extended in the execution of this research, The writer wishes to also thank various members of the staff of the Battelle Memorial Institute for their assistance at various stages of the research. This assistance was similarly invaluable in the construction of a simulation model of the open hearth process for making steel as well as in the utilization of the model in analyzing the several hypotheses of the research. The author further wishes to acknowledge his indebtedness to many others who in various ways have given their assistance. For example, appreciation is extended to Mr. Evan Brill of the Ohio State University* computer science center for his assistance in the computer programming phases of this study; to Dean John S. Day of the Krannert Graduate School of Industrial Administration, Purdue University, who most kindly furnished the typing service; and to Mrs. L o m e Hill who did the typing of the manu script. ii Last, but not least, special thanks are due to the author's wife and family who in many ways offered encouragement and made certain sacrifices that facilitated completion of this study,, iii VITA September 30, 1927 Born ■ Somerville, Massachusetts 1948-1952 , . a s s o c . Boston University, Boston, Massachusetts 1952 . , , „ , . B.A., Boston University, Boston, Massachusetts 1952-195U : , Quality Control Engineer, Johnson & Johnson Co., New Brunswick, New Jersey 1954_1956 , . 'Production Supervisor, American Cyanamid Corp., Bound Brook, New Jersey 1956-1957 - , . Division Quality Control Engineer, Bendix Aviation Corp., Red Barak, New Jersey 1957 . o . M.Sc,, Rutgers University, New Brunswick, New Jersey 1957"1959 • > . , Staff Statistician, Jones & Laughlin Steel Corporation, Pittsburgh, Pennsylvania Lecturer in Mathematics, Evening Division, Carnegie Institute of Technology, Pittsburgh, Pennsylvania 1959-1962 , . Supervisor, Operations Research, National Steel Corporation. Weirton, West Virginia 1962-1963 t . Teaching Fellow, University of Pittsburgh, Pittsburgh, Pennsylvania 1963 : . , , M.B.A., University of Pittsburgh, Pittsburgh, Pennsylvania 1963-1964 , . o , Teaching Assistant, The Ohio State University, Columbus, Ohio 1964-1965 , : , c Instructor, The Ohio State University, Columbus, Ohio 1965-PreSent . Assistant Professor, Krannert Graduate School of Industrial Administration, Purdue University, West Lafayette, Indiana iv FIELDS OF STUDY Major Field: Logistics Studies in Logistics. Professors Jimmie L. Heskett and Frederick E. Kindig. Studies in Quantitative Methods. Professors Frederick E. Kindig and James A. Black. Studies in Management. Professor Ralph C. Davis. Studies in Economics. Professors Clifford L. James and Robert D. Patton. v CONTENTS Page ACKNOWLEDGMENT . .................... ii VITA .................. iv TABLES ............ , ............................ .............. lx FIGURES ......................................................... x CHAPTER I. INTRODUCTION..................... 1 Statement of P r o b l e m ........................... 2 Importance of Stu d y ............................. 14- Hypo theses of Study ....................... 13 Order of Presentation ......... 15 II. LITERATURE SURVEY .................................... 16 Open Hearth: Productivity Sub-Model ............ 16 Open Hearth: Cost Sub- M o d e l............. 18 The Basic Oxygen Process ........................ 19 The Blast Furnace............................... 23 Total M o d e l s ......... 28 Technological Changes............... 28 Conclusion..................................... 32 III. NATURE OF THE OPEN HEARTH P R O C E S S .................... 3k The History of Steel making Processes Since 1856 - An O v e r v i e w ............................. 3k The Open Hearth Process.......................... Mt- The Open Hearth F u r n a c e .................... kk Typical Heat Cycle and Chemistry............ k'J Layout and Material Handling Facilities . 32 Conclusion ................................... 33 vi DEVELOPMENT OF METALLIC MATERIAL AND LIMESTONE SUB-MODEL . ............................... 55 Basis for Metallic Material and Limestone Sub-Model ............................. 57 General Description of the Linear Programming Sub-Model „ . „1 . ............. I9 Development of Restrictions ......... 6l Hot Metal Restrictions ........... Si Availability of Molds and Stools .......... 63 Availability of Iron Skull . ............ 63 Feed Ore and Charge Ore Restrictions . 63 Availability of Domestic Scrap ............ 6k Availability of Chunks and Pits .......... 65 Availability of Reclaim Scrap ............ 65 Availability of Purchased Scraps .......... 66 Copper Restrictions . .................. 67 Availability of Charging Boxes ............ 67 Ingot Tonnage Required by Groups .......... 68 Per Cent Iron Restrictions ................ 68 Limestone Restrictions .................... 69 Criterion ....................................... 70 C o n c l u s i o n ................................... 71 PRODUCTIVITY AND SUBSIDIARY SUB-MODELS ........ 72 Development of a Productivity Sub-Model 73 Development of Furnace Cost Sub-Model .......... 77 Fuel and Steam Costs . 79 Cost of Finishing Additions, Fluorspar, and Burnt Lime ................................... 80 The Total Model - An Overview .................. 81 Conclusion ..................................... 83 SIMULATION WITH THE MODEL ........................... 8k Specification of Model Inputs . 8k Metallic Material and Limestone Sub-Model 8k Restrictions ............. 8k Criterion ............ .. 93 Productivity and Subsidiary Sub-Models . , 95 Simulation Results ............... Conclusion ...................... .. SENSITIVITY ANALYSIS OF MODEL AND EVALUATION OF HYPOTHESES...................... .................. Sensitivity Analysis ..... ......... Effect of Error in Hot Metal Cost ........ Effect of Error in Availability of Charging Boxes .......... .............. vii Chapter Page Effect of Error in Tons per Hour ...... o 117 Effect of Error in Copper Content of Purchase Scraps .............. 119 Effect of Error in Availability of Purchase Scraps oooo ao.oo.oo.oo0 ... 120 Evaluation of Hypotheses ............. 122 Evaluation of Hypothesis (1)......... 123 Evaluation of Hypothesis (2^ ......... 129 Evaluation of Hypothesis (3) ........ 132 Conclusion .........o.oo.o.o... 137 VIII. SUMMARY AM) RECOMffiNDATIONS ...................... 138 Summary . 138 Recommendations .................. lUO With Respect to the Steel Industry ...... ll*0 With Respect to the Scrap Industry ...... 1U2 With Respect to the Extension of the Model . lhh Conclusion .................... Ih6 APPENDIXES ............................ Ih7 APPENDIX A: FINANCIAL ANALYSIS OF TEN LARGEST STEEL COMPANIES (INDIVIDUAL BASIS) ............... 1**8 APPENDIX B; BASIC OXYGEN INSTALLATIONS IN OPERATION, UNDER CONSTRUCTION AND PROJECTED ............. 159 APPENDIX C-l: SIMULATION ANALYSES, MONTHLY, PHILADELPHIA AREA . .......... ............ I69 APPENDIX C-2: SIMULATION ANALYSES, MONTHLY, PITTSBURGH AREA ...................... 230 APPENDIX C-3s SIMULATION ANALYSES, MONTHLY, CHICAGO AREA ....................... 29I APPENDIX D-l: SIMULATION ANALYSIS USING AVERAGE PURCHASE SCRAP PRICES, CHICAGO AREA ................ 352 APPENDIX D-2: SIMULATION ANALYSIS USING AVERAGE PRDCHASE SCRAP PRICES, PITTSBURGH AREA ............... 358 APPENDIX D-3s SIMULATION ANALYSIS USING AVERAGE PURCHASE SCRAP PRICES, PHILADELPHIA AREA .............. 361* BIBLIOGRAPHY ............ .............. ....... 370 viii TABLES Table Page 1. Financial Analysis of Steel Industry ............ 12 2. Product Mix and Monthly Ingot Demand ............ 85 3. Standard Information Per Input Material ..... ......... 86 k. Assumed Value of Restriction Constants .... ............. 87 5 . Average Cost Per Ton of Metallic Materials................. 96 6 . Monthly. Purchase Scrap Prices by M a r k e t ................... 97 7 . Railroad Rates Per CWT Finished Steel, Composite, Based on Point of Origin and D e s t i n a t i o n ............................. 126 8 . Estimated Capital Costs of Oxygen - Converter Shop Designed for 1,500,000 Net Tons of Nominal Annual Ingot Capacity ............................................. 13k 9. Estimated Capital Cost of An Open-Hearth Shop Designed for 1,500,000 Net Tons of Nominal Annual Ingot Capacity With Oxygen Practice ....... .......... 136 lx FX'&URES Total Annual Ingot Production