Selection of Mining Machinery Based on Mechanical Delay Statistics: An Application of Goal Programming to Capital Budgeting (2a86d08e-1e92-4c24-9215-1f5f312db387)

This paper presents an application of goal programming (GP) to major mining machinery purchases based on historical operating data on mechanical downtime and production. The GP technique, an extension of integer programming, is used to maximize an objective function comprised of deviations away from management-preferred financial goals. Different capital budgeting techniques are used to evaluate capital proposals, and the results of these analyses are combined and weighted in a maximization of profits objective function. The GP method gives an optimal solution to a multiple goal problem. A sensitivity analysis is performed to determine the effect of a variable production improvement condition or a variable budget control con¬dition on proposal selection.