Prices of robustness and reblending in oil industry

In this paper we present a method to calculate the prices of robustness and reblending through a robust real-time optimization method for the on-line linear oil blending process. Our approach places this problem in a wider frame where different sources of uncertainty inherent to the blending process appear. The polytopal structure of our problem permits a robust approach that is simpler than the classical theory of Ben-Tal and Nemirovskii which needs convex programming tools. Our method is intended to avoid reblending and we measure its performance in terms of the blend quality giveaway and feedstocks prices. The difference between the nominal and the robust optimal values (the price of robustness) provides a benchmark for the cost of reblending which is difficult to estimate in practice. This new information can be used to adjust the level of conservatism in the model. Additional critical information for the control system is produced.