(629b) Hedging Risk through the Flexible Recipe Framework

During the past decades the chemical industry has been faced with a major change into a globally competing and demand drive mode of operation. Companies are required to respond quickly to a changing market situation meeting customer-specified product specifications. The inherent flexibility of batch processes makes this mode of operation very attractive for such scenario. Actually, most of the scheduling approaches assume that batch processes are operated at nominal conditions following predefined fixed production recipes. However, in many cases a flexible recipe operation may be a suitable way of incorporating systematic recipe adaptations depending on the actual process conditions. Furthermore, the complexity of the scheduling problem is increased by the high degree of uncertainty brought about by external factors, such as continuously changing market conditions and customer expectations, and internal parameters, such as product yields, qualities and processing times. Although it has been widely recognized the importance of incorporating uncertainties in the scheduling formulations, most of these models are deterministic, i.e. they assume that all the problem data is known in advance. Thus, the accuracy of the solutions generated using deterministic models may depend on the degree of uncertainty. Moreover, most of the stochastic models devised to date to address scheduling under uncertainty optimize the total expected performance measure, and do not provide any control on its variability over the different scenarios. That is to say, they assume that the decision-maker is risk neutral. However, different attitudes towards risk may be encountered.

The aim of the present work is to provide a tool to support decision making during the development of a scheduling policy in an uncertain market environment while incorporating the trade-off between risk and profit at the decision level. To achieve our goal, an efficient MILP-based framework that manages the risk in the decision-making strategies by incorporating as an additional feature the flexibility of the batch processes recipes is presented. Our approach is based on a continuous-time domain representation and the generalized notion of precedence. Management of risk is explicitly addressed by adding a control measure as a new objective to be considered, thus leading to a multi-objective optimization formulation. The main advantages of our approach are highlighted through a case study, in which a set of solutions appealing to decision makers with different attitudes toward risk are obtained. Moreover, the convenience of exploiting the capabilities of the flexible recipe framework as a way of hedging the financial risk associated with the batch process operation is also discussed through comparison with the traditional approach which operates at nominal conditions.

Financial support received from the European Community projects (MRTN-CT-2004-512233; RFC-CR-04006; INCO-CT-2005-013359) and the Generalitat de Catalunya with the European Social Fund (FI grant) is fully appreciated.