Objective economic criteria

The problem of portfolio selection is easily expressed numerically as a constrained optimization maximize economic criterion subject to constraint on available capital. This is a form of the knapsack problem, which can be formulated as a mixed-integer linear program (MILP), as long as the project sizes are fixed. (If not, then it becomes a mixed-integer nonlinear program.) In practice, numerical methods are very rarely used for portfolio selection, as many of the strategic factors considered are difficult to quantify and relate to the economic objective function. 

The lead—acid battery could be adequately evaluated only if compared to the other types of secondary power sources. A theoretical assessment can be made by comparing the electrical, energetic, power and economic parameters of the different sources of electricity, but the relative share of each battery chemistry in practical applications is the most objective evaluation criterion. Table 1.1 summarises the basic energy and power characteristics of six types of secondary power sources which are currently used most widely. Data from the studies of Wentzl [78] and Kohler [79] have been used. It can be seen that the lead—acid battery has inferior specific energy and power characteristics as compared to the other types of batteries. 

Independent of the nature of the plant, either multiproduct or multipurpose, the most-used mathematical approaches are MILP (Mixed-Integer Linear Programming) or MINLP (Mixed-Integer Non-Linear Programming). The predominant objective function is based on an economic criterion. 

The plant has two primary sources for wastewater, the decanter (0.20 kg water/s) and the pot (0.15 kg/s). The plant has been shipiHDg the wastewater for off-site treatment. The cost of wastewater transportation and treatment is 0.01 kg leading to a wastewater treatment cost of proximately SltO.OOO/yr. The plant wishes to stop offsite treatment of wastewater to avoid the cost ( 110,000/yr) and alleviate legal-liability concerns in case of transportation accidents or inadequate treatment of the wastewater. The objective of this problem is to eliminate or reduce to the extent feeble off-site wastewater treatment. For capital budget authorizatitHi, the plant has the following economic criterion (see Appendix DI) ... 

Determine the criterion for optimization and specify the objective function in terms of the above variables together with coefficients. This step provides the performance model (sometimes called the economic model when appropriate). 

As with all of die processes described, drese are first studied in detail in the laboratoty with an industrial application as dre objective. Those processes which pass the criterion of economic potential are used in a pilot plant smdy, and dretr, if successful, at the production level which must be optimized. The materials which are produced are mainly, in the present instance, for application in the elecU onics industry where relatively high costs are acceptable. It will be seen drat the simple kinetic theory of gases is adequate to account for dre rates of these processes, and to indicate the ways in which production may be optimized on dre industrial scale. 

Optimization techniques are procedures to make something better. Some criteria must be established to determine whether something is better. The single criterion that determines the best among a number of alternatives is referred to as the performance index or the objective function. Economically, this is the expected profit for a plant design. It may be expressed as the net present value of the project. 

In classical republicanism only a small proportion of the population were considered to have the independence required to be citizens. The economic independence that went with the ownership of land was often a key criterion. Ownership of a certain amount of land is now untenable as a criterion for citizenship rather, we give political rights and responsibilities to those who have the capacity to be independent in the sense of being independent practical reasoners (so children are excluded). However, it is not enough merely that citizens have the capacity to be independent practical reasoners, they have to be independent practical reasoners. This is not something for which there can be an objective test, and any attempt to carry out such a test would be contrary to the need to show respect for fellow citizens.11... 

To optimize the flooding processes, we first have to select which optimization criterion to use. Generally, we choose incremental oil recovery factor as a criterion. Alternatively, we may choose maximum NPV as a criterion with economic analysis. The latter choice is more proper because it takes into account discounted cash flow. However, performing economic analysis requires more economic data that are generally not available. The criterion to be used depends on the objective. 

Multi-objective optimization (MOO) has attracted considerable attention from researchers in chemical engineering, particularly in the past decade. Reported MOO studies have mainly used criteria such as selectivity, yield, productivity and/or energy consumed see Chapter 2 for the chemical engineering applications studied since 2000 and the objectives used in them. However, profit, an important criterion in any commercial operation, was not used in many of these studies. Apart from the simple profit, several economic criteria such as payback period (PBP), net present worth or value (NPW or NPV) and internal rate of return (IRR) are popular for evaluating projects in industrial practice. Edgar et al. (2001) compared the pros and cons of these three profitability criteria. Studies by Huskies (1997) and Pintaric and Kravanja (2006), show that optimal solutions of chemical processes are dependent on the economic objective selected. This indicates the conflicting nature of some, if not all, economic objectives, which means MOO is probably required even if one is interested in only the profitability criteria. 

---