Combination approach improves investment decisions for capital projects

When evaluating project economics, plant owners that use a combination of three methods will improve understanding of the capital project and make better decisions whether to invest in a given project. The three methods include benchmarking, Monte Carlo risk analysis, and a historical return on investment correlation.Benchmarking is a tool that ensures that overall refinery performance does not deteriorate; it can also lead to engineering and construction (E&C) contractor performance measures. Monte Carlo risk analysis allows one to view the cumulative impact of risk and eliminates the need to make perfect forecasts. Analyses using historical return on investment (ROI) correlations show t...

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