Financial risk analysis in the synthesis and design of processing networks: Balancing risk and return

Alberto Quaglia, Gürkan Sin, Rafiqul Gani

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Abstract

The construction of a processing network is a corporate investment, that processing companies make with the goal of creating the conditions to increase their value. In a previous work, a computer-aided framework supporting the design of processing network under uncertainty has been presented (Quaglia et al. 2013). In this contribution, we study the implications of corporate finance concepts such as funding strategies and cost of the capital on the selection of an optimal processing network. To this end, the process synthesis framework is extended to include various project funding and financial risk models. Through the solution of a small benchmark problem, the impact of financial factors on the optimal network configuration is presented and discussed.
Original languageEnglish
Title of host publicationProceedings of the 24 th European Symposium on Computer Aided Process Engineering – ESCAPE 24
EditorsJJ Klemeš, P. S. Varbanov, P. Y. Liew
Number of pages6
PublisherElsevier
Publication date2014
Publication statusPublished - 2014
Event24th European Symposium on Computer Aided Process Engineering - Budapest, Hungary
Duration: 15 Jun 201418 Jun 2014

Conference

Conference24th European Symposium on Computer Aided Process Engineering
CountryHungary
CityBudapest
Period15/06/201418/06/2014

Keywords

  • Synthesis and design of processing network
  • Capital budgeting
  • Mixed Integer Non Linear Programming
  • Financial optimization

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