A stochastic programming model for production planning and sequencing of multi-grade petrochemicals

In multi-grade petrochemical production, switching of production from one grade to another grade, a certain amount of transitional grade called off-spec is produced. The quantity of the off-spec depends on the sequencing of grades production. The off-spec is a cheap product and to enhance its quality it should be blended with premium grades. Therefore, sequencing of multi-grade petrochemical production is vital issue. Usually petrochemical production companies try to minimize off-spec production by ordering grades production according to their melt flow rates. Following the melt flow rate without taking into consideration customer needs will negatively affect the performance of the petrochemical companies. Therefore, a stochastic mixed-integer linear programming model is developed to determine the optimal production plan and the right sequence. The proposed model also take into consideration the impact of demand variations on the integrated production planning and sequencing. The model enforces the production to follow the melt flow rate and satisfy the customer demand, simultaneously. In addition, the obtained results indicate that uncertainty in demand has a high impact on the performance of the proposed model.