Multi-objectives regression, optimization and risk assessment of profitability indicators of the simulation of mini Liquefied Petroleum Gas (LPG) dispensing unit

Kazeem Kolapo Salam; Kehinde Ayoola Babatunde; Akeem Olatunde Arinkoola; Titilayo Deborah Oluwole; Dolapo Aremu; Usman Olalekan Oladapo; Suliyat Omolara Ibrahim

doi:10.57056/ajet.v8i2.136

Authors

Kazeem Kolapo Salam Department of Chemical Engineering, P.M.B. 4000, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Nigeria.
Kehinde Ayoola Babatunde Department of Chemical Engineering, P.M.B. 4000, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Nigeria
Akeem Olatunde Arinkoola Department of Chemical Engineering, P.M.B. 4000, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Nigeria
Titilayo Deborah Oluwole Department of Chemical Engineering,, Louisiana State University, Baton Rouge, LA 70803, USA
Dolapo Aremu Department of Chemical Engineering, P.M.B. 4000, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Nigeria
Usman Olalekan Oladapo Department of Chemical Engineering, P.M.B. 4000, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Nigeria
Suliyat Omolara Ibrahim Department of Chemical Engineering, P.M.B. 4000, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Nigeria

DOI:

https://doi.org/10.57056/ajet.v8i2.136

Keywords:

Profitability indices, Energy, Uncertainty analysis, Response surface methodology, Techno-Economic Analysis

Abstract

In this study, simulation of a mini Liquefied Petroleum Gas (LPG) dispensing unit was conducted using ASPEN HYSYS and the operation of both compressor and pump were validated theoretically. The effect of the economic parameters (Total Annual Sales (TAS), Total Production Cost (TPC), Fixed Capital Investment (FCI) and interest rate (r)) on the behaviour of three profitability indicators (Net Present Value (NPV), Return on investment (ROI) and Internal Rate of Return (IRR)) were modelled and optimized using Box Behnken Design (BBD). The uncertainty of the developed models was determined using Oracle Crystal Ball (ORB). The optimum economic parameters, TAS of ₦48,830,600, FCI of ₦37,422,000, TPC of ₦35, 053,000 and r of 5.4% predicted optimum profitability indicators are ROI of 34.6%, NPV of ₦98,993,580.25 and IRR of 34.15% for 15 years’ investment plan. An interaction of the economic parameters showed that for NPV to be positive, TAS value should be greater than ₦42.5 million and the TPC should be less or equal to ₦36 million. The profitability analysis suggested that this investment will pay back in 2.36 years. Given that the demand of LPG is on the increase and therefore, this LPG plant will be a long term investment with a good return on investment.

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