1) Main constraint: coverage of a given heat demand.
2) Investment decision through mixed integer linear programming.
3) Investment optimization as extension of unit commitment (schedule optimization)
Dear Manish,
I suggest you to see links and attached files in topic.
-Evaluation of Capital Budgeting and Investment Decisions in Nigeria
https://file.scirp.org/pdf/OALibJ_2016032509512785.pdf
-New Best Practices for Power Project Planning and Construction
https://www.powermag.com/new-best-practices-power-project-plan...
-Capital Budgeting Research and Practice: The State of the Art ...
https://www.emeraldinsight.com/.../S1474-787120140000024004?...
-3 Capital Budgeting Process - KLUEDO - TU Kaiserslautern
https://kluedo.ub.uni-kl.de/files/3419/21_Capital_Budgeting.pdf
Best regards
Dear Manish
Capital budgeting is essentially a MCDM problem where there is a portfolio of projects or activities that are subject to a set of criteria. Mainly these criteria are related with the IRR, or the NPV or the payback period
I can't tell you which is the best method to use because it depends on different factors. However, in your case, and since your are investigating power plants, I believe that you need to consider for instance that the financial indicators that your are aimed at must be considered over a planning horizon of may be 10 years, and considering the different projected income statements, that is the balance, the cash flow and others. I believe that using Linear Programming, and selecting as main objective to maximize profit you can get a very good idea about which the best project is and also a ranking. The best advantage of LP is that with one objective function you will get, if it exists, the optimal solution, which can't be achieved by any other method
May be if you can give more details I will be able to help you in this undertaking
I also believe that it would be rewarding having a look at the material generously shared by Mohammed Lafifi, because they deal with actual problems
Dear Syed
I agree with you and together with cost/benefit analysis were the tools used until mid 20 th century.
However demands from society and the environment changed that paradigm which only accounted for benefits and paving the way for the appearance of a myriad of MCDM methods that are used today
However the grand dad of MCDM methods was Linear Programming developed during the II War World and still very much alive by being used by no less than 70,000 large companies. world-wide A proof of its importance is that Exel incorporated it in 1993 and it continues working on complex MCDM problems and it is free and very efficient
Of course, the method can handle simultaneously economic, financial, social and environmental problems, and contemplate real world situations that no other method can consider
Dear Nolberto Munier ,
My task is to optimize investment and at the same time optimizing Carbon emissions.
Investment optimization as extension of unit commitment (schedule optimization)
The investment decision includes remuneration and costs of unit commitment.
Thank you very much Mr. Mohamed-Mourad Lafifi for your suggested links and topics.They were very helpful and made my understanding much clear.
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