Modelling Production Performance of Small Scale Production Plant

This paper is about development of a model to evaluate capacity utilization (CU) of small scale production plants. The model employed short term production function with key independent variables of: plant operators, capital, R&D, energy and machinery maintenance expenditure. CU of small scale plant is the output and dependent variable for this study. The developed model is tested on a small scalewater production plant. The output results show that the average CU is 74% for six months of operations. The model test results revealed that all the inputs are positively correlated (R>0.893) to CU, with major inputs are significantly contributing to CU. About 80% (R2=0.797) of the inputs are consumed to achieve CU of production process. The model estimated value was found to be close to actual recorded outputs (<2% difference). The model is found to be statistically significant at 95% confidence level with p-value less than 0.05. The developed model is useful for small scale plants in evaluating the production performance to achieve technical and economical sustainability. For further research in this topic, this study suggests building a model to optimize the contribution of inputs to CU of small scale production plants.