LH Thermo Electron Corporation Coal Centralized Procurement Cost Control

Electricity purchasing cost is the main cost of Thermo Electron Corporation, which is composed of coal mining cost and transportation cost structure. When the power plant boiler is in design, the design of coal is specified, which can be used as the main power plant. In the actual operation process, in order to reduce the cost of procurement, management will dig the low quality coal to burn, which forms a supplementary supply channels.With the deepening reform of electric power, the group company is responsible for the power plant coal procurement work, in order to ensure the supply of security, regional Thermo Electron Corporation to the main supply channels of coal, and the main supply channels in various areas, with the development of information technology, the cost is more and more transparent, in the short term, the main supply channel ore price and coal basic fixed, the mine is not easy to change the power plant. Therefore, focus on the cost control of the procurement cost control and the cost control of the supply channels in the transportation cost control.Transportation is the basic link in the process of logistics management, especially for commodity logistics management is more important, scientific development of effective transportation planning program for improving transport efficiency and reduce transportation cost plays an important role, centralized procurement of transportation cost control can pass through the transportation problem to solve.Transportation problems are the earliest origin in people’s daily life to transfer some of the items from some places to other places, requires the use of transport routes or transport program is the most economical or the lowest cost, which has become a research problem.Generally speaking, transportation problem is to address how to some products from some origin transportation to some Xiaode, between each of the origin of the supply quantity and each in the demand quantity is known, and around the transport unit known to determine a such that the total transport into the scheme of the minimum.The transport of coal is related to the optimization of coal supply security and the purchase price of coal, in recent years, the thermal power enterprise profitability continued to decline, and coal procurement cost has occupied 60 to 80% of the total cost of the power plant, coal centralized procurement has increasingly become a trend, and centralized procurement to develop the operation to raise the scope of application of the transportation problem, centralized procurement has become a powerful means to reduce the transportation cost.LH company is a power generation group in Jilin Province branch, responsible for the area of four thermal power plant management work, before 2012 basic conflicts of coal procurement, the plants were in their own interests for heavy, in the coal supply during times of stress, even to ensure supplies and mutual raise price, dividing the company overall profit caused by adverse effects. In 2012, with the company’s decision to change, the requirements from coal procurement to get more leverage, the company’s four power plants are concentrated procurement of coal. Among them, 70% of the share of the main supply channels for the boiler design, 30% of the shares for the boiler design and coal types have different supply channels.Main supply channels, under the premise of the power plant coal demand and transport prices knowable, the procurement of coal from various coal mines to the LH company belonging to the four power plants, transportation problem is particularly prominent, under the premise of the fixed coal Juban, the minimum total transportation cost plan is coal procurement costs minimum scheme. Fuel cost is very important for the overall benefit of the power generation fuel.Supply channels, in the mixed with the supply of supplementary channels to meet the two conditions: first, mixed with coal to meet the requirements of the boiler design; two is mixed with coal purchase cost to achieve the minimum. In determining the supply of coal transport channels, the formation of the LH company’s overall procurement cost control program, and reached the most cost of fuel procurement.The cost control of coal centralized procurement is a complicated and arduous system engineering. Using the theory and method of systems engineering, operations research and other disciplines, to proceed from the general transportation problem model, solving algorithm is proposed, and according to the characteristics of coal transport system, establish the mathematics method to solve transportation problems in coal procurement, reached the transportation cost of the main supply channels the small, but also to meet the main supply channels the lowest cost of procurement; to the supplementary supply channels, but also used the theory and method of linear programming in operational research, to solve the problem of regional power generation company purchasing cost the province. This is more and more attention to the regional power companies to focus on the management of fuel, effectively solve the problem of the power plant’s self- fighting waste, so that the regional power companies to focus on the coal industry to develop the fine.