Economic risk evalation of poor-quality raw material input’s impact on metallurgical production

Voloshyna, Svitlana and Волошина, Світлана Василівна and Provolotska, Olena and Проволоцька, Олена Миколаївна (2018) Economic risk evalation of poor-quality raw material input’s impact on metallurgical production. Торгівля і ринок України (2(44)). pp. 66-78. ISSN 2079-4762

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Abstract

Production cost forming factors coming from improper logistic setup at the enterprise are defined (including risk of a contract nonfulfillment concerning raw materials supply of proper quality, risk of breakdown in raw materials receiving process at the enterprise). As a result of classification and comparison of the existing theoretically and methodological approaches to the risk analysis and considering the special aspects of metallurgical enterprises’ activity the general schematic model of risk analysis, risk evaluation and risk management is constructed. There is provided to consider this model as a complex methodological approach to the relevant sort of risk evaluation. The complete cost event chain is built based on connections between improper quality raw material supply and profit loss at the enterprise. This analysis brings the opportunity to define the midterm and final results of risk effect that ends in nonfulfillment of a cost production plan and causes financial losses in the form of receiving less product sales income and expected profit loss. Using the main methods of risk scoring, the approbation of the improved methodological approach to the analysis, evaluation and risk management of receiving the raw materials of improper quality by the enterprise (as an example of the material recourses’ sample used in steel production (blast-furnace process stage in metallurgical production) at PJSC “ArcelorMittal Kryvyi Rih”) is made. Based on the evaluation results the proposals regarding the strengthening of control as for individual quality key figures of some sort of raw materials are prepared and the areas of practical application of the developed methodological approach are defined.

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