A probabilistic economic model and sensitivity analysis of fuel-oil production from plastic waste

Abstract

Pyrolysis of plastic waste has been studied for many years, but there are only a few commercial plants in the world. A probabilistic economic model was applied to a fuel-production business from plastic waste. Many parameters governing the business balance such as collection amount of plastic waste, oil yield and gate fee often fluctuate during a business period. The model parameters were determined from reports or interviews and assumed to fluctuate along the normal distribution, unlike fixed values of several sets of parameters in conventional case studies of economic feasibility. The probability of business success, Ps, was defined as the probability of a positive business balance. The total balance was calculated using 17 parameters, which were assumed to fluctuate randomly along the normal distribution for a business period of 20 years. The probability of success was obtained by the Monte Carlo method with 3000 calculations using the fluctuating parameters. Sensitivity analysis was also conducted to measure the effect of each typical parameter on Ps. Among the parameters examined, gate fee is the most influential. The probability of success increased by 69% with a gate fee of 1.1-times the average and decreased by 28% with a gate fee of 0.9-times the average.