The Minimum Optimal Steel Plant and the Survivor Technique of Cost Estimation

Authors:
Robert P. Rogers
Working Paper:
197

The survivor technique is used to examine economies of scale in the steel industry, and the results are compared to an earlier engineering approach study by Tarr. Specifically the paper focuses on the conventional integrated steel mill of over 1 million tons a year. The results are consistent with Tarr's estimate of a steel mill Minimum Optimal Scale of 6 million tons a year.