Aggregate production planning and energy supply management in steel industry with an onsite energy generation system: A multi-objective robust optimization model

This paper introduces an optimization model developed for the steel industry, the most energy-intensive industrial sector in many countries. New methodologies for both aggregate production planning and energy supply management are developed to maximize profit while minimizing energy consumption and greenhouse gas (GHG) emissions. Moreover, uncertainties are considered, and robustly optimized strategies are identified for a grid-connected steel production company with an onsite energy generation system. The performance of the developed model is evaluated through extensive computational experiments. The results show how energy tariffs affect integrated production planning. Also, the selected production planning time depends on several factors such as electricity, labor, and maintenance costs, and pending orders that need to be fulfilled. The onsite power plant produces electricity when the electricity production cost is lower than the price of electricity provided by the connected grid. Furthermore, the company’s environmental policies influence the choice of energy generation technology. However, implementing an onsite energy generation is a viable policy that benefits both profitability and pollutant reduction. This study helps decision-making in production planning and energy supply management in the iron and steel industry (which can be applied to other industries too), ensuring environmental improvement at the lowest costs.