A Mathematical Model Based on Supply Chain Optimization for International Petrochemical Engineering Projects

Based on the study of supply chain (SC) and SC optimization in engineering projects, a mixed integer nonlinear programming (MINLP) optimization model is developed to minimize the total SC cost for international petrochemical engineering projects. A steam cracking project is selected and analyzed, from which typical SC characteristics in international engineering projects in the area of petrochemical industry are summarized. The MINLP model is therefore developed and applied to projects with detailed data. The optimization results are analyzed and compared by the MINLP model, indicating that they are appropriate to SC management practice in engineering projects, and are consistent with the optimal price-effective strategy in procurement. As a result, the model could provide useful guidance to SC optimization of international engineering projects in petrochemical industry, and improve SC management by selecting more reliable and qualified partner enterprises in SC for the project.