Page 329 - Analysis, Synthesis and Design of Chemical Processes, Third Edition

Figure E10.15 Sensitivity Curves for the Parameters Considered in Example 10.15

How can the sensitivity values calculated above be used to estimate changes in the profitability criterion
of the process? For small changes in the parameters, it may be assumed that the sensitivities are constant
and can be added. Therefore, the change in NPV can be predicted for a set of changes in the parameters
using the following formula:

(10.8)

Example 10.16 illustrates this concept.

Example 10.16

What is the change in the NPV for a 2% increase in revenue coupled with a 3% increase in FCI ?
L

ΔNPV = S Δx + S Δx + S Δx = (2.80)(0.02)(75) – (2.80)(0) – (0.59)(0.03)(150)
2
1
1
3
3
2
= $1.545 million
A Probabilistic Approach to Quantifying Risk: The Monte-Carlo Method. The basic approach
adopted here will involve the following steps.
1. All parameters for which uncertainty is to be quantified are identified.
2. Probability distributions are assigned for all parameters in Step 1.
3. A random number is assigned for each parameter in Step 1.