Computers & Chemical Engineering, Vol.57, 3-9, 2013
Modeling the commodity fluctuations of OPEX terms
A feasibility study of a new plant or even of a revamped one bases the forecast of incomes and outcomes on a discounting back approach. This means that both prices and costs of commodities (i.e. raw materials and products) are assumed constant for long time-horizons. Commodities together with utilities play a major role in the economic assessment of OPEXs (operative expenditures). The paper tackles the "discounting back" problem that sees a coming apart between the dynamics of real market prices/costs (subject to fluctuations, volatility, and the "supply and demand" law) and the constant prices/costs assumed in conventional feasibility studies. The manuscript presents and discusses a methodology to model the time evolution of prices and costs of commodities for the feasibility-study framework of dynamic conceptual design. It also provides an improved methodology respect to direct Monte Carlo sampling of quotations over historical ranges, which is effective for repeated design optimization. (C) 2013 Elsevier Ltd. All rights reserved.
Keywords:Price and cost forecast;Commodities;Crude oil quotation;Feasibility study;Process/plant design;Market and demand fluctuations;Dynamic conceptual design