DefinePK

Abstract

Purpose is to propose methodological approach optimizing the parameters of a coal mine operation under diversification. Productive flows of coal mines have been considered as well as production functions. To solve the diversification problem, ratios between the types of the invested capital and output level in the form of raw material have been compared. Cobb-Douglas production function has been applied to develop a model supporting the coal mine activities; in this context, diversification potential of the activities is involved. For the first time, a model optimizing the mining parameters under diversification has been proposed. The model demonstrates the production functions-resources ratios. The developed model helps control temporally the efficiency of manufacturing resources, determine overall production, calculate the basic parameters of a coal mine operation, and define the resources helping increase its efficiency. In the first place, the diversification potential of mining production has been considered at the expense of changes in the productive flows. Methodological recommendations have been provided as for the production activities of mining industry. Innovatively, internal potential of the operation schedule has been examined to improve functioning efficiency of a mine; moreover, components of the potential have been analyzed. The abovementioned has made it possible to formulate managerial decisions being determination of output as well as ratios between the generated resources, required to support the output; constant monitoring of their use while determining adequate ratio between the fixed assets, labour force, and material resources; and determination of transposability of the productive flows within the total balance. To be used in practice, the paper proposes certain methods defining the rational output from the viewpoint of production activities as well as correlation of the operating resources to achieve the specified production scale. In such a way, return on assets is improved in terms of similar degree of the key assets, labour, and material use. To apply the technique properly and efficiently, a particular case has been considered determining an optimum production method for a coal producer.