Selection of Raw Material with Variation and Price Difference in Obtaining Lowest Costs using A Case Study of Ethanol Production

  • Pittaya Hayakwong Department of Industrial Engineering, Faculty of Engineering, Khon Kaen University
  • Seekharin Sukto Department of Industrial Engineering, Faculty of Engineering, Khon Kaen University
Keywords: Time Series Forecasting, Box-Jenkin’s Method, Bioethanol Production, Raw Materials Selection, Decision Making

Abstract

          This research aims to select raw materials from various kind of sugar mills with different prices, quality and quantity for obtaining the lowest raw material costs in ethanol production. Studying issue are the theoretical factors of converting sugar to ethanol, raw material, quality data collection, molasses C contract price and world sugar price forecast via Box-Jenkin's Auto-Regressive Integrated Moving Average (ARIMA) that is time-series forecast) to analyze the lowest of raw material costs. The results of this research concluded that the ARIMA model (1,2,1) forecast showed that the market sugar price in July 2021 rose to 12,131 baht per ton or 17.75. Cents per pound. As a result, the price of raw materials with the proportion of sugar in raw materials is significantly higher. Then, the process of raw material selection is start with calculation the cost of each raw material the SJM Formula to evaluate the concentration of sugar and molasses. Then the cost and amount of raw materials are sorted to meet customer demands. Therefore, the syrup selection during the sugar mill production period into the production process could be reduced the import of molasses from abroad and molasses B with high cost. The ethanol production process total cost is minimum total cost compare with other conditions. From the simulation scenario, the cost of raw materials can be reduced by 3.14%, or approximately 94.7 million baht per year.

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Published
2021-09-01
Section
Research Articles