Project evaluation computer methods

The computation methods described above require the knowledge of reaction kinetics. Unfortunately, this is not the case in a large number of cases, particularly in an evaluation project. In this case shortcut methods are handy, in which the reactor volume may be estimated from information about the residence time. The following definitions of the reaction time are mostly used ... 

For the most part, these methods consider that the plant is build at some known point, the time at which the whole capital investment is used, and that profits are somehow predictable throughout the time horizon. The methods respond to a project evaluation paradigm that was crafted years ago in the era when computers were not powerful enough and/or even available, and when uncertainty in modeling was manageable only for small problems. 

The basis of the Monte Carlo technique is to carry out a large number of project evaluations with different input values selected from the individual distributions in a random way. The random selection is done in such a way that the number of times a value of a variable is selected is proportional to its probability. Clearly, the large number of calculations involved requires the use of a computer to make the method feasible. The result of the many calculations is a range of NPV or DCF values and, since the same value of NPV or DCF can result from different combinations of input data, a frequency distribution of the results can be plotted (Figure 6.8). 

Selection of the computer system and system supplier involves evaluation of a supplier s development and project working methods, and also initial evaluation of the basic system software and hardware functionality with regard to GMP application. 

To complete this text we offer a selection of exercises. Some of the exercises are of a theoretical nature and we ask you to verify some of the equations presented in the text or to derive established results in other ways. In other exercises we invite you to extend the theoretical treatments in ways that we have not considered in detail (although in some cases the results are available in the literature). Still other exercises are of a computational nature and we invite you to compute mass transfer coefficients, molar fluxes, composition profiles, and other quantities. In order to gain some familiarity with the various methods described in the text we strongly recommend solving the computational problems. Hand calculation is extremely instructive but does get to be a bit tiresome after a while. There are also exercises that require you to evaluate papers in the literature. Finally, we have provided exercises that can be assigned as term projects for students, perhaps as a replacement for a final examination. 

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