Modeling the commodity fluctuations of OPEX terms

Journal Modeling the commodity fluctuations of OPEX terms

Authors: D. Manca

Computers and Chemical Engineering, 57, 3-9, (2013)

Go to DOI : 10.1016/j.compchemeng.2013.04.018

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.