A Novel Profit Potential Calculation Method Applied to Web Manufacturing
- 1 School of Engineering, Aalto University, Espoo, Finland
Abstract
This study applies a constructive research approach to develop a novel profit potential calculation method framework suitable for web manufacturing processes. The theoretical framework is the profit function, which is further developed to form the web profit model. The profit model is optimized with respect to technology and process related input parameters to form the profit potentials. Then, new concepts: profit potentials on different optimization levels of increasing complexity are presented. Application of the novel method is demonstrated with a short case example. The findings show that the created profit potential framework can be applied to web process profit potential analyses. In addition, applying this framework profit potentials for other processes, products, and services can be defined in the future.
- Quest, I. (2002) A Strategy for Profit. Paperloop, No. 8, 33-35.
- Quest, I. (2003) Maximising Profits while Reducing Capital Expenditure. Paper Technology, No. 2, 50-52.
- Shephard, R.W. (1970) Theory of Cost and Production Functions. Princeton University Press, Princeton.
- Fare, R. and Primont, D. (1995) Multi-Output Production and Duality: Theory and Applications. Kluwer Academic Publishers, Boston, 172 p. http://dx.doi.org/10.1007/978-94-011-0651-1
- Coelli, T. (2002) On the Econometric Estimation of the Distance Function Representation of a Production Technology. Discussion Paper 2000/42. Center for Operations Research and Econometrics, Universite Catholique de Louvain.
- Coelli, T., Grifell-Tatje, E. and Perelman, S. (2001) Capasity Utilisation and Profitability: A Decomposition of Short Run Profit Efficiency. CORE, Discussion Papers, 27 p.
- Pesonen, L. (2001) Implementation of Design to Profit in a Complex and Dynamic Business Context. Doctoral Thesis, University of Oulu, Oulu, 132 p.
- Goldratt, E. and Cox, J. (1984) The Goal: A Process of Ongoing Improvement. North River Press, Croton-on-Hudson, New York.
- Kleef, J., Rooij, M., Joore, L. and van der Plas, R. (2002) PM Uptime in Competitive Papermaking: The Role of the Human Factor (Part 1). Paper Technology, No. 11, 39-46.
- Boyd, G. and McClelland, J. (1999) The Impact of Environmental Constraints on Productivity Improvement in Integrated Paper Plants. Journal of Environmental Economics and Management, 38, 121-142. http://dx.doi.org/10.1006/jeem.1999.1082
- Hannula, M. (2002) Total Productivity Measurement Based on Partial Productivity Ratios. International Journal of Production Economics, 78, 57-67. http://dx.doi.org/10.1016/S0925-5273(00)00186-9
- Virtanen, S. (2000) A Method Defining Product Dependability Requirements and Specifying Input Data to Facilitate Simulation of Dependability. Doctoral Thesis, Acta Polytechnica Scandinavica, Mechanical Engineering Series No. 143, Helsinki University of Technology, Espoo, 80 p.
- Henley, E.J. and Kumamoto, H. (2000) Probabilistic Risk Assessment and Management for Engineers and Scientists. IEEE Press, New York, 620 p.
- McCormick, N.J. (1981) Reliability and Risk Analysis. Academic Press, Waltham, 446 p.
- Fogelholm, J. (2000) Cost Function Modelling in the Paper Industries. Doctoral Thesis, Helsinki University of Technology, Department of Industrial Engineering and Management, Report No. 11, Espoo, 102 p.