Daily profit maximization using linear programming techniques: Sapugaskanda

Abstract

The petroleum industry plays one of the most significant role in the energy market in Sri Lanka. The actual use of this source is limited by economical, technological and political reasons. Crude oil refining is an extremely complex and dynamic activity since the refinery itself works to maximize its profitability under the frame work of the organization. To model the LP Problem to the Crude Oil Refinery station in Sapugaskanda, Sri Lanka, the primary data was collected. The data was modeled and the Linear Programming (LP) method was used to get the optimum solution. The refinery produces 12 major petroleum products together with 24 intermediate streams. The commonly used and most profitable products are Gasoline, SBP and Diesel. For above 36 streams, the flow rates in Metric Ton (MT) per day were considered as decision variables. To maximize the profit, the product values were considered as positive and the raw material costs and operating costs were considered as negative. The TORA software was used to generate the optimum solution. The optimum result obtained showed a notable profit compared to the existing situation in the Oil Refinery Station, Sapugaskanda. The operational difficulties, assumptions, suggestions and further recommendations were discussed.