Optimal production planning in a petrochemical industry using multiple levels

• Proposed mixed integer programming formulation for production planning.
• Proposed formulation incorporates production through multiple levels.
• Proposed formulation is expressive and can be solved to global optimality.
• Proposed formulation overcomes the drawbacks of the formulations in literature.
• Proposed formulation leads to improvement of profit up to 16.31%.

An optimal production plan is crucial for the competitiveness of a petrochemical industry. In this article, we review a previously modelled formulation for guiding petrochemical industries in Saudi Arabia (Alfares & Al-Amer, 2002) and discuss its limitations. We propose a mathematical formulation that enables the determination of better production plans yielding higher profits by overcoming the limitations of the formulation in literature. In addition to yielding better production plans, the proposed formulation is easier to build and expressive in nature. Moreover the proposed formulation is generic to accommodate any number of production levels. The benefits of proposed formulation are demonstrated with the help of eight case studies taken from the literature and show an improvement of up to 16.31% in profit.