Framework to decide for an expansion strategy of a small scale continuously operated modular multi-product plant

• Published in: Chemical engineering and processing Vol. 113; pp. 74 - 85
• Main Authors: Heitmann, Matthias, Huhn, Thomas, Sievers, Stefan, Schembecker, Gerhard, Bramsiepe, Christian
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.03.2017
• Subjects: Continuous production; Decision tree analysis; Modularization; Multi-product plant; Plant expansion; Production planning; Modularization; Continuous production; Multi-product plant; Production planning; Decision tree analysis; Plant expansion
• ISSN: 0255-2701; 1873-3204
• DOI: 10.1016/j.cep.2016.09.004

•Continuous modular multi-product plant considering a stepwise capacity increase.•Decision tree analysis with production planning and investment risk analysis.•Analysis of most economic design capacity of modular production line.•Expansion strategy allows for investment risk reduction in changing markets. Continuously operated multi-product plants enable an efficient and flexible production of new products. As a future plant concept, a modular design allows the possibility of a stepwise capacity expansion when market demand is increasing. Choosing the right plant capacity combined with a suitable expansion strategy is a key challenge in this context. Therefore, additional costs for expansion have to be balanced against an achievable economic performance and a reduction of investment risk. In this work a framework to evaluate the production capacity of a continuously operated modular multi-product production line for a production line wise capacity expansion will be presented. As a result, a decision tree analysis integrating production planning by a capacitated lot sizing method is introduced to evaluate the economic performance of plants with different capacities in an uncertain market. The framework is applied for a case study considering a continuous production of a set of three different products. As a key result it can be said that the investment risk can be reduced by applying smaller scale modular production lines. However, the low scalability of investment costs of a small scale production line negatively affects an economic expansion strategy.