Economic analysis of alternatives for optimizing energy use in manufacturing companies

- Evaluate top consumers of energy in manufacturing: A/C, compressed air, and lighting
- Economic analysis of alternatives to optimize energy used in manufacturing
- Comparison of payback method and internal rate of return method with real data
- Results demonstrate that the company could generate savings in energy use.

The manufacturing companies are one of the main consumers of energy. The increment in global warming and the instability in the petroleum oil market have motivated companies to find alternatives to reduce energy use. In the academic literature several researchers have demonstrated that optimization models can be successfully used to reduce energy use. This research presents the use of an optimization model to identify feasible economic alternatives to reduce energy use. The economic analysis methods used were the payback and the internal rate of return. The optimization model developed in this research was applied and validated using an electronic manufacturing company case study. The results demonstrate that the main variables affecting the economic feasibility of the alternatives are the economic analysis method and the initial implementation costs. Several scenarios were analyzed and the best results show that the manufacturing company could save up to $78,000 in three years if the recommendations based on the optimization model results are implemented.