Profit control systems

The present Spanish system of price control is inefficient, as it provides notable negative incentives for pharmaceutical consumption and expenditure it would be desirable to replace it with a more flexible system such as an overall profit control system, or a combination of price-cap regulation and rate of return regulation. 

In all EU countries except Germany and Denmark, some form of regulation or intervention in the individual prices of medicines is used as the principal cost containment policy, ranging from systems that fix the price of each product to profit control systems (as in the UK). Price regulation... 

A product-by-product profit control system does not allow the control of the company s overall profit, as the average cost depends on the size of the fixed costs and the volume of units sold over time. 

Although profit control schemes are associated with the same problems as the cost-plus method, profit control systems can be more flexible as the profitability of a company as a whole is controlled, rather than the margins on individual products. The greatest difficulty, as with the cost-plus approach, arises with... 

An ethylene plant contains more than 300 equipment items. Traditionally, operators were trained at the site alongside experienced co-workers. With the advent of modem computers, the plant operation can be simulated on a real-time basis, and the results displayed on monitors (107). Computers are used in a modem plant to control the entire operation, eg, they are used to control the heaters and the recovery section (108). A weU-controUed plant is much more profitable than a poorly controlled plant. For the heaters, a model-based control system is gaining importance (109). Instead of simply controlling the coil outlet temperature (COT), severity is actually controlled. The measurement of severity (either or C H /CH ratio) requires on-line effluent... 

In supervisory control, process and economic models of the plant are used to optimize the plant operation by maximizing daily profit, yields, or production rates. The computer program reviews operating conditions periodically, computes the new conditions that optimize a chosen objective function, and adjusts plant controller set points, thus implementing the new improved conditions. This scheme will obviously require a model of the plant, current information about operating conditions from the plant s control system, and finally, sophisticated optimization software. 

The pharmaceutical industry has an important social contract with the public to discover and develop medicines that have value in extending and enhancing life. Simultaneously, the industry must maintain its profitability both to ensure the future stream of innovations and to provide investors with a return. Balancing the responsibilities to the public and to shareholders is further complicated by the inefficiencies of the global patent system, the disease burden of poor developing countries, national price control systems, and third-party payers. 

Lessons may also be learned from applications of control systems in the food processing industries. These applications must satisfy hygiene requirements (including periodic cleaning and sterilization), time constraints imposed by product perishability, and requirements for accurate records of sources and operation histories of materials.21 The industry also experiences slim profit margins, short production runs, and frequent product changeovers—characteristics shared with many industrial bioprocesses. 

Given the high complexity of the operation, one of the most important factors in achieving the full impact of any improvement process is a rigorous control system that enables production managers to follow up with full and timely implementation of all the necessary measures, and to identify the bottom-line impact on the profit and loss account. 

Controller performance monitoring (CPM) ensures proper performance of the control systems for safe and profitable operation of a process and man-... 

Because research and development engineers are not able to deal effectively with control system design, it is likely that many potentially profitable chemical processes never see the light of day. Processes which cannot be managed by conventional control instrumentation hardware are just not studied or developed, although a little imagination and an appreciation of what is involved in controlled loop behavior might make the processes commercially feasible. 

The profitability of this process is highly dependent on energy cost and capital investment. Energy and capital cost penalties associated with pollution control systems must therefore be minimized as far as practicable. The first step is to reduce the sulfur concentration in the ammonia plant feedstock to less than 0.1 ppmv to prevent poisoning the reformer catalyst. Once desulfurized, the feedstock is partially reacted with steam in a primary reformer to... 

In Figure 1.11 we see a general trend that the steam flow rate must follow to optimize the profit O. Therefore a control system is needed which will (1) compute the best steam flow rate for every time during the reaction period and (2) adjust the valve (inserted in the steam line) so that the steam flow rate takes its best value [as computed in (1)]. Such problems are known as optimal control problems. 

Control system Market results Standards and cost Reports and profit Plans and invest- Mutual goal set-... 

The mold temperature control system must therefore be laid out in a manner which allows the heat of the molded part to dissipate uniformly and within the shortest possible time. Aside from the quality of the molded part, therefore, profitability is also strongly affected, because of the effect on the cycle time. 

Responsibility of Operator. The operator should realize that a prolonj ed intensive effort went into design of the control system. It is, however, most unlikely that this effort could possibly have provided for every conceivable operational situation. Nevertheless, the operator would do well, when he feels unduly constrained or frustrated by the control system, to try to keep in mind all the implications of his intended action. It is probable that, as operating experience accumulates, it will become evident that some changes in the control system could profitably be made. Until such experience is accumulatedi it would seem reasonable to ask the operator to learn to live with the system as designed. 

The design of a control system for a chemical plant is guided by the objective to maximize profits by transforming raw materials into useful products while satisfying product specifications, safety and operational constraints, and environmental regulations. All four constraints require special consideration. 

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