A stochastic optimization model for oil refining industry planning

Stochastic optimization modeling approach is a useful tool to address different scenarios with different probabilities. The approach can be applied into different chemical related processes such as refining or petrochemical related industries. The petroleum refining industry is sharing a major role in the worldwide energy and the global market. Refining industry faces serious changes in the products daily demand, properties and the crude oil cost which result in difficulty in taking immediate decisions. Therefore, the use of stochastic optimization models becomes more effective and useful for decision making purpose. In this research, a general stochastic optimization model for the refinery operational planning was developed to help decision makers in making appropriate immediate decisions for higher profitability. This is achieved by knowing the best option for each scenario if prices go up or down as an example. The stochastic model gives the highest profit when the demand and final products price increases (scenario 1).