Capital planning under uncertainty at Fletcher Challenge Canada

摘要

Fletcher Challenge Canada Limited (FCCL) is a large pulp and paper producer in British Columbia. FCCL has traditionally been a newsprint producer and has kept pace with increasingly stringent quality requirements by continually rebuilding existing paper machines and ancillary plant. The company is also considering other options, including converting machines to different grades of paper. Because of the complexity associated with the large number of possible options available, the company decided to develop an optimisation model to assist with this strategic decision making. Market forecasts, capital requirements, production and other pertinent data were collated for a ten year planning horizon, and incorporated into a multi-period optimisation model. Initially this model proved to be extremely difficult to solve. Based on knowledge of the business a number of extra constraints were added that improved its performance and allowed optimal solutions to be obtained. The model has proved to be successful in challenging entrenched views within FCCL regarding strategic direction, and stimulating wide ranging thought and discussion.