Co-production System Research Articles

Enhanced isobutanol production by co-production of polyhydroxybutyrate and cofactor engineering

Once cells have been used to produce biochemicals, there are only a few effective ways to utilize the residual cell mass, even though the utilization of leftover cells would aid in decreasing production costs. Here, a polyhydroxybutyrate (PHB) and isobutanol co-production system was designed to address this challenge. The addition of the PHB operon into Escherichia coli conferred a metabolic advantage for alcohol production, generating 1.14-fold more isobutanol. Furthermore, following nitrogen source optimization and cofactor engineering, the engineered E. coli strain produced 2-fold more isobutanol and 0.25 g/L PHB. Moreover, E. coli cells showed higher tolerance to isobutanol with the overexpression of PHB biosynthesis genes. This co-production system resulted in an increased biomass, higher glucose utilization, and lower acetate maintenance, leading to higher productivity regarding PHB and isobutanol yield. Thus, this novel system is applicable to future fermentation studies for the co-production of PHB and isobutanol.

Co-production of carbon nanotubes and hydrogen from waste plastic gasification in a two-stage fluidized catalytic bed

This study aims to develop a two-stage fluidized catalytic bed reactor system for continuous co-production of carbon nanotubes (CNTs) and hydrogen from waste plastics gasification. Ni/Al-SBA-15 and Ni–Cu/CaO–SiO 2 catalysts have been synthesized and granulated for CNTs synthesis and hydrogen production in the first- and second-stage reactor, respectively. The operating parameters, including reaction temperature and equivalence ratio (ER), were investigated to confirm the feasibility for CNTs and hydrogen production of this system. The Ni/Al-SBA-15 added in the first-stage reactor enhanced the waste plastics degradation to produce CH 4 and C 2 –C 5 hydrocarbons with increasing temperature, which could be used as the source for CNTs synthesis. Lowering the ER promoted the catalytic thermal cracking and reforming of hydrocarbons that contributed to the CNTs and hydrogen production. Nevertheless, the H 2 production rate showed a significant increase to 857.6 mmol/h-g catalyst with the assistance of Ni–Cu/CaO–SiO 2 in the second-stage reactor. The produced smaller-molecule hydrocarbons from the second-stage reactor with higher temperatures could benefit the co-production of CNTs and hydrogen. The two-stage fluidized catalytic bed gasification system exhibited an optimal performance of high fraction CNTs and H 2 when temperatures of first- and second-stage reactor were controlled at 600 and 800 °C, respectively, with 0.1 ER. • A two-stage fluidized catalytic bed is developed to produce carbon nanotubes and H 2 . • Ni/Al-SBA-15 and Ni–Cu/CaO–SiO 2 were granulation to use in the pilot-scale system. • Ni/Al-SBA-15 and Ni–Cu/CaO–SiO 2 highly enhanced carbon nanotubes and H 2 production. • Operating parameters of the fluidized bed were evaluated for catalytic performance. • The system gave 857.6 mmol H 2 /h-g catalyst and carbon nanotubes fraction of 48.0%.

A parametric study of process design and cycle configurations for pre-combustion PSA applied to NGCC power plants

Natural gas combined cycle (NGCC) power plants show favourable conditions for the implementation of pressure swing adsorption (PSA) for the capture of carbon dioxide. These plants also show the advantage of a hydrogen co-production system. The challenge when implementing PSA in these plants is to achieve reference configurations that can obtain both products (hydrogen and carbon dioxide) at high purity levels, maximizing the recovery of hydrogen as a valuable product. This study presents the scale-up of a previously reported laboratory-based, four-bed, seven-step PSA model and a parametric study of the scaled-up PSA variables to maximize the product performance parameters. The capacity of the PSA model is based on the flow rate requirements of a GE-10 gas turbine, which can operate with up to 95% hydrogen purity. A parametric study using global system analysis (GSA) showed the effect of the bed diameter, length-to-diameter ratio and purge-to-feed flow rate ratio upon the product performance parameters. A purity of carbon dioxide of 95.37% and a hydrogen recovery of 92.27% was obtained with a purge-to-feed flow rate ratio of 0.22. The purity of hydrogen stayed close to 99.99%, with maximum deviations around 0.0001% for all case studies. The purity of the carbon dioxide and the recovery of hydrogen were further improved by considering additional PSA configurations. The addition of an assisted purge step and three pressure equalization steps improved these performance parameters by two percentage points. Overall, the model with one pressure equalization step, assisted purge step and rinse step after the feed step showed promising results with a purity of carbon dioxide of 98.28% and hydrogen recovery of 95.48%. Lower capitals costs are expected for this configuration, compared to adding pressure equalization steps using more than four fixed-bed units.

Improving hydrogen and methane co-generation in cascading dark fermentation and anaerobic digestion: The effect of magnetite nanoparticles on microbial electron transfer and syntrophism

The efficiency of microbial electron transfer is fundamental for determining the performance of fermentative hydrogen/methane production. To facilitate microbial electron transfer, conductive magnetite nanoparticles (MNPs) were added into a cascading dark fermentation and anaerobic digestion system that was inoculated with Enterobacter aerogenes ZJU1 and methanogenic activated sludge (MAS), respectively. During the hydrogen-producing stage, the ratio of NADH/NAD+ and the activities of hydrogenase and electron transport system (ETS) of E. aerogenes ZJU1 were all increased by dosing 200 mg/L MNPs, which was conducive to hydrogen production through the NADH-dependent pathway. In the presence of 200 mg/L MNPs, hydrogen production increased by 21.1%, while subsequent methane production improved by 22.9%. Electrochemical analysis demonstrated the improvement in extracellular electron transfer capacity of MAS after adding MNPs, which can be ascribed to the contribution of MNPs and electrochemically active extracellular polymeric substances (EPS) induced by MNPs, such as humic acid-like and fulvic acid-like substances. Bacteria Syntrophomonas and Archaea Methanosarcina were the dominating enriched syntrophic partners, and the expression of functional genes involved in CO2 reduction to methane pathway was found to increase. Therefore, a more efficient fermentative hydrogen and methane co-production system was established by improving microbial electron transfer with the addition of MNPs.

Value of down-conversion policy in a vertical differentiated co-production system

Raw material down conversion is common in practice, in which high-end raw materials may be transformed into low-end materials to make low-end products at a down-conversion cost. Motivated by this phenomenon, this paper investigates the profit-maximizing manufacturer’s joint input quantity, down-conversion policy and pricing decisions in a co-production system wherein two vertical differentiated products are simultaneous manufactured. We employ two stylized modeling approaches (i.e., deterministic yield model and random yield model) to formulate the manufacturer’s operation behavior. We find that the adoption of down-conversion policy is threshold controlled by the unit down-conversion cost in each yield scenario, and only when the unit down-conversion cost is sufficiently low will the manufacturer adopt this policy. In detail, the implementation of this policy tends to exaggerate the total demand base (demand enhancement effect) and increase the price differentiation (relieved cannibalization effect). To benefit from this policy sufficiently, the manufacturer is always aggressive to input more quantity regardless of the yield pattern (i.e., deterministic or random). Specifically, when the manufacturer adopts down-conversion policy (under the assumption that the random yield follows a uniform distribution), the optimal input quantity in the random yield scenario is higher than that in the deterministic yield scenario when the unit down-conversion cost is low and vice versa. In addition, the manufacturer has higher possibility to implement down-conversion policy in the random yield scenario.

Synergetic optimization management of crop-biomass coproduction with food-energy-water nexus under uncertainties

Synergic management of the local crop-biomass coproduction system is the potential to increase resource efficiency and promote sustainable development. In this paper, an interval fuzzy linear fractional programming (IFLFP) model is developed for planning regional food production with the consideration of ecological protection, water resource conservation, biomass energy supply, and food-energy-water (FEW) nexus. The main advantages of the proposed IFLFP model are the abilities to reflect uncertainties with different characters as interval values and fuzzy sets and to provide system efficiency measurement by the ratio form of conflict objective functions. The IFLFP model is then tailored for the application of the crop-biomass coproduction management with FEW nexus in Jiangsu Province, China. The influences of different optimization goals (i.e. economic benefits and environmental benefits per unit irrigation water consumption) and multiple water resource scenarios under climate change are examined and discussed to provide more managerial insights. The results reveal that wheat, barley, and tuber crops would be more easily affected by water resource availability and optimization goals. Besides, recycle water would be considered as an important source for irrigation under scare water scenario, and gain the priority for the economic purpose. The results also imply that it is impossible to realize “double-win” of environmental and economic goals simultaneously, and decision makers should make compromises among different strategies.

Optimal production-inventory policy for the multi-period fixed proportions co-production system

Consider the multi-period production-inventory problem where a manufacturer purchases and processes a raw material into two products in fixed proportions when facing uncertain demands. In each period, the manufacturer first reviews the on-hand inventories of the products and then decides the purchase/processing quantity of the raw material. After processing the raw material into the end products, the demands of the two products are realized and satisfied by the available inventories. Any leftover inventories are carried to the next period while the unsatisfied demands are backordered. By proving the concavity and submodularity of the expected profit-to-go function, we establish that the one-dimensional produce-up-to policy is optimal. We also study the case where the raw material is seasonal and the manufacturer has only one chance to purchase. Modeling it as a dynamic program, we establish that the one-dimensional produce-down-to policy is optimal. Finally, we conduct numerical studies to examine the impacts of supply-demand balance and price fluctuation on the optimal policy, and derive managerial insights from the analytical findings.

One-pot selective conversion of lignocellulosic biomass into furfural and co-products using aqueous choline chloride/methyl isobutyl ketone biphasic solvent system

This study investigated simultaneous lignocellulose fractionation and conversion in a one-pot reaction using an aqueous choline chloride/methyl isobutyl ketone (ChCl/MIBK) biphasic solvent system. Under the optimized condition (170 °C, 60 min, 0.6 wt% H2SO4, 10.7 wt% solid loading), the biphasic solvent solubilized 96% xylan in raw switchgrass, which was simultaneously converted to furfural with a yield of 84.04%. The biphasic solvent was also able to selectively extract lignin, which had a high purity (93.1%), and uncondensed moieties (i.e., Hibbert’s ketone), as well as decreased molecular weight and polydispersity index. The resultant pulp was enriched with cellulose (73.3%), which can be completely hydrolyzed into glucose within 48 h via enzymatic hydrolysis. Aqueous ChCl was successfully recycled and reused for atleast three cycles with similar performance in switchgrass fractionation. This study demonstrated that aqueous ChCl/MIBK biphasic system was an effective solvent system for co-production of furfural, high quality technical lignin and digestible cellulose for further upgrading.

Primary energy and exergy of desalination technologies in a power-water cogeneration scheme

The primary energy consumption of a spectrum of desalination systems is assessed using operating information and technical bids for real plants configured with coproduction of electricity. The energy efficiency of desalination plants is often rated on a stand-alone basis using metrics such as specific energy consumption, gained output ratio, and second law efficiency, which can lead to inconsistent conclusions because the heat and electrical work inputs to the plant have very different exergies and costs, which must be taken into account. When both the heat and work inputs are drawn from a common primary energy source, such as the fuel provided to electricity-water coproduction systems, these inputs can be compared and combined if they are traced back to primary energy use. In the present study, we compare 48 different configurations of electricity production and desalination on the basis of primary energy use, including cases with pretreatment and hybridized systems, using performance figures from real and quoted desalination systems operating in the GCC region. The results show that, while reverse osmosis is still the most energy efficient desalination technology, the gap between work and thermally driven desalination technologies is reduced when considered on the basis of primary energy. The results also show that pretreatment with nanofiltration or hybridization of multiple desalination systems can help to reduce energy requirements. Additionally, the specific type of power plant in the coproduction scheme and its operating parameters can have a significant impact on the performance of desalination technologies relative to one other.

Indigenous weather and climate forecasting knowledge among Afar pastoralists of north eastern Ethiopia: Role in adaptation to weather and climate variability

Traditional weather and climate forecasting is used by many indigenous communities worldwide as a guide in making important decisions that enable them cope and adapt to climate change-induced extreme weather variation. In many pastoral communities in Africa, traditional weather and climate forecasting remains the most accessible and affordable source of weather and climate information. In this study, we used individual interviews and focused group discussions to systematically document indigenous weather and climate forecasting knowledge among Afar pastoralists, with the aim of making such information available, and enhance use of this knowledge in climate change adaptation and explore synergies with modern weather forecasting system. The Afar pastoralists traditionally predict weather and climate variation through the observation of diverse bio-physical entities including livestock, insects, birds, trees and wildlife. No single indicator is taken at face value; weather forecasting is undertaken in a dynamic process where information collected from different sources, including weather information from the modern weather forecasting system, is triangulated to make the safest livelihood decisions. Before any forecasting information is used, it is evaluated through three traditional institutions that collect, share and analyse the information. These institutions include (1) the Edo or range scouting where traditional rangeland scouts are sent on a mission to assess weather and other spatially and temporally variable attributes on rangelands; (2) the Dagu, a traditional secured and reputable network, where weather information is shared among users; and (3) the Adda or the traditional Afar governance system, which analyses traditional weather information before community decisions are made. This first-time systematic documentation of indigenous weather and climate forecasting knowledge among the Afar communities demonstrated the dynamic process of indigenous weather and climate knowledge production, analysis and communication. This shows the value of indigenous knowledge in contemporary pastoral communities, while highlighting synergies with the modern weather and climate knowledge system for co-production of knowledge that serves the objectives of local people.

Co-production of single cell oil and gluconic acid using oleaginous Cryptococcus podzolicus DSM 27192

BackgroundThe co-production of single cell oil (SCO) with value-added products could improve the economic viability of industrial SCO production. The newly isolated oleaginous yeast Cryptococcus podzolicus DSM 27192 was able to co-produce SCO intracellularly and gluconic acid (GA) extracellularly. In this study, the metabolic regulation of carbon distribution between SCO and GA through process optimization was comprehensively investigated.ResultsThe carbon flow distribution between SCO and GA was significantly influenced by the cultivation conditions, such as nitrogen sources, glucose concentration and dissolved oxygen concentration. It was found that organic nitrogen sources were beneficial for SCO accumulation, while GA production was decreased. Dissolved oxygen concentration (DOC) was found to enhance SCO accumulation, while high glucose concentration was more favorable for GA accumulation. Hence, a two-stage DOC or glucose concentration-controlled strategy was designed to improve cell growth and direct carbon distribution between SCO and GA. Moreover, C. podzolicus DSM 27192 could degrade its stored lipids to synthesize GA in the late stationary phase, although considerable amounts of glucose remained unconsumed in the culture medium, indicating the importance of fermentation time control in co-production systems. All these observations provide opportunity to favor either the production of SCO or GA or rather their simultaneous production.ConclusionsCo-production of SCO and GA by C. podzolicus DSM 27192 can improve the economical value for microbial lipid-derived biodiesel production. Moreover, the results of the proposed co-production strategy might give guidance for other co-production systems.

Inventory Control for a Coproduction System Under Demand Uncertainty

We consider a coproduction system that uses a common input to produce multiple products in multiple periods. The demands for these products are stochastic in every period. We determine the optimal production plan in order to minimize the total expected discounted cost over a finite time horizon. Using $L^{\natural}$ -convexity, we demonstrate that the optimal production quantity is state dependent and obeys several structural properties, such as monotonicity, threshold, and boundedness.

An innovative solar assisted desiccant-based evaporative cooling system for co-production of water and cooling in hot and humid climates

Although evaporative coolers consume much lower electricity than the vapor compression systems, they are not applicable in humid climates. Combination of desiccant wheels and evaporative coolers, known as desiccant-based evaporative cooling systems, allows evaporative coolers to be used in humid climates, which provide significant energy and environmental advantages with respect to vapor compression systems. However, one of the main disadvantages of evaporative cooling is the high water. Regarding the global water crisis, a cooling system which saves both water and energy will be an attractive alternative to the current cooling systems. To this aim, this paper presents a novel desiccant-based evaporative cooling system for co-production of water and cooling. In this system, the moisture content of exhaust regeneration air is recycled to cover all of the evaporative cooler water consumption, and also part of the domestic water usage. To evaluate the system performance, dynamic hourly simulation of the proposed system as well as a reference vapor compression system was performed for a typical 60 m2 building in hot and humid climate of Bandar Abbas, Iran. The simulation results show that the proposed system is able to provide comfort temperature and relative humidity in a hot and humid climate. Moisture harvesting produce about 590 L water during a week, which covers all of the evaporative cooler water consumption, and provides an excess amount of 289 L for domestic usage. Monthly integrated results indicate that electricity consumption of the proposed system is 60% lower than the reference system, while its natural gas consumption is 30% higher than VCS, which is due to the high regeneration temperature in some hours. In other worlds, this system replace electricity consumption, a high-exergy and expensive energy carrier, with heat consumption. This system leads to 18.7% saving of CO2 emissions over a month. Economic evaluation proves the economic feasibility of proposed system with a payback period of 3 years. In conclusion, proposed system provide a more environmental friendly cooling system for water, energy and carbon saving.

Including nature in the food-energy-water nexus can improve sustainability across multiple ecosystem services

Activities in the food-energy-water nexus require ecosystem services to maintain productivity and prevent ecological degradation. This work applies techno-ecological synergy concepts in an optimization formulation to design a system for co-producing food and energy under constraints on ecological sustainability. The system includes land use activities and biomass conversion processes for the production of energy carriers, as well as supporting ecosystems that increase the supply of key ecosystem services. The co-production system was linearized and reduced to a mixed-integer linear program, which was optimized for single objectives under a variety of production and sustainability constraints. Results indicate that for the system considered to achieve high food and energy co-production, land use options should be balanced between food-producing crops and electricity-producing wind turbines and solar panels. Results also show that ecological sustainability can be achieved for this system with relatively small changes in land use patterns. The inclusion of nature in the design enables the system as a whole to achieve ecological sustainability for multiple ecosystem services with moderate sacrifices of food and energy productivity.

Thermodynamic modeling and optimization of a combined biogas steam reforming system and organic Rankine cycle for coproduction of power and hydrogen

Abstract This paper aims to use waste heat of the biogas steam reforming (BSR) system for organic Rankine cycle (ORC) for simultaneous power and hydrogen production. A comprehensive thermodynamic modeling of the proposed combined system is carried out. In addition, optimization of the proposed system is conducted, using genetic algorithm (GA). Four different working fluids of R600, R245fa, R123, and R113 are used in ORC, where among all of them R600 is recommended due to its high performance and environment benefits. Using R600 as working fluid in ORC, results of the optimization demonstrated that the proposed system performs in an optimum state based on the selected objective functions when steam to carbon molar ratio, carbon dioxide to methane molar ratio, reaction pressure, reactor temperature, pump pressure ratio and pinch point temperature difference of the internal heat exchanger (IHE) are set in 2.99, 0.502, 1.004 bar, 998.85 K, 7.21 K, and 5.44 K, respectively. In this case, the optimum net output power, hydrogen production rate, energy efficiency and exergy efficiency are obtained 15.9 kW, 0.02529 kg s−1, 45.63%, and 74.89%, respectively. Moreover, the results of exergy analysis indicated that among all components, recuperator and reactor are accountable for the highest exergy destruction through the system. To better understand the effect of various parameters on performance of the system, a comprehensive parametric study of some key thermodynamic parameters on the main performance criteria is performed. It is concluded that the energy and exergy efficiencies of the combined BSR-ORC system can be increased by increasing steam to carbon molar ratio and pump pressure ratio or decreasing reaction pressure, carbon dioxide to methane molar ratio and pinch point temperature difference of the IHE.

Optimal design of a coproduction system of electricity and hydrogen to manage imbalances resulting from forecast errors in photovoltaic outputs

Renewable power sources are increasing mainly because of economic institutions such as renewable portfolio standard or feed-in tariff program. In Japan, the feed-in tariff program triggered explosive growth of photovoltaic systems because of its high tariff level. Although mass introduction of photovoltaic systems certainly contributes to reduce CO2 emissions, it causes instability issues in power systems. One of the most serious issues is management of imbalances resulting from forecast errors in photovoltaic outputs. On the other hand, power-to-gas technologies are attracting our attention, since these technologies could convert surplus of renewable energy to other energy carriers. In particular, hydrogen is efficiently produced from electricity using electrolysis. We could use hydrogen to manage the imbalances by the system, in which uncertain parts of photovoltaic outputs are used to produce hydrogen. In this paper, we propose a coproduction system of electricity and hydrogen to reduce the imbalances. For this purpose, a novel mathematical model is developed, in which we determine the structure of the coproduction system with a mixed integer linear programming method. Evaluated results indicated that the coproduction system is economical under appropriate capacity of the electrolyzer.

Hydrogen production from biomass using iron-based chemical looping technology: Validation, optimization, and efficiency

To develop a new integrated system for co-production of electricity and hydrogen with CO2 capture, a biomass steam gasification (BSG) process integrated with an iron-based chemical looping hydrogen production (CLHP) system and a combined heat and power (CHP) system is presented and simulated using Matlab and Aspen Plus. The raw wood (RW) and torrefied wood (TW) are used as the feedstock of the BSG process to produce RW- and TW-derived syngas, respectively. The CLHP system operates with solid circulation and adopts two countercurrent moving bed reactors where detailed kinetic models are validated by experimental data from the literature. The CHP system uses a combination of a heat recovery steam generator (HRSG) and a series of steam turbine (ST) cycles to enhance the electricity efficiency and the overall system efficiency. To address the maximum syngas conversion and hydrogen yield of the BSG-CLHP-CHP system, the optimal results show that steam velocity of the moving bed oxidizer is a crucial parameter, which should be operated at less than 15 cm s−1 for RW-derived syngas and 8.7 cm s−1 for TW-derived syngas. Overall, based on a comparison of the BSG-CLHP-CHP system performance in terms of hydrogen thermal efficiency, overall system efficiency, and hydrogen yield between RW and TW, the predictions suggest that TW is obviously superior to RW.

Recycling and its effects on joint production systems and the environment – the case of rare earth magnet recycling – Part I — Production model

The primary production of rare earth elements (REE) used in neodymium-iron-boron (Nd-Fe-B) magnets is associated with environmental impacts from both mining and processing. It has been suggested that recycling of scrap Nd-Fe-B magnets would reduce primary production of REE, and thus environmental impacts. However, existing studies on environmental effects of recycling based on the methodology of Life Cycle Assessment (LCA) do not take into account the so-called balance problem, which accounts for the fact that all elements co-occuring in the ore are jointly produced, resulting in either an excess or a shortage of individual elements. We develop a two-part approach to incorporate this issue into LCA. In the first part, we investigate the effects of introducing large-scale Nd-Fe-B recycling to the global rare earth market. A production model is presented that quantifies the potential market effects of secondary production (recycling) on the balance problem. Results show that primary production could partly be avoided when introducing a secondary production route to the rare earth market, whilst still meeting demand for joint (non-magnet) REE, only produced from the primary route. The production model will be used for a consequential life cycle assessment study which will be published as a separate paper (Part II). In addition, we show that our approach may also be interesting for other LCA studies, where effects of market changes on a co-production system are investigated.

Development of Integrated High Temperature and Low Temperature Fischer-Tropsch System for High Value Chemicals Coproduction

The conventional indirect coal-to-liquids process for transportation fuel production suffers from inefficiency in syncrude utilization and poor economic performance. This is largely because the FT syncrude are not properly used. In consideration of the potential synergies in fuel quality improvement and chemicals coproduction, for further high value utilization of the hydrocarbon products, the novel HTFT-LTFT system integrated high temperature Fischer-Tropsch process and low temperature Fischer-Tropsch process together is proposed based on the advanced coal gasification and FT techniques and modelled in Aspen Plus. Energy, exergy analysis and a detailed economic analysis are performed. The synergies of the integrated system is also discussed by comparing with the separated HTFT/LTFT system. Results show that the integrated HTFT-LTFT systems can increase the annual income by more than 10% by high utilization of FT syncrude and reduce the capital investment by 18.2% by sharing infrastructure. Higher energy and exergy efficiencies as well as internal rate of return (IRR) are achieved by the integrated systems. The integrated HTFT-LTFT system is more efficiently and economically than the separated HTFT/LTFT system. Therein the integrated HTFT-LTFT system coproduce both olefins and base oils simultaneously presents an excellent economic performance with IRR of 18%, much higher than the 4.7% of the separated HTFT/LTFT system.

Value of operational flexibility in co-production systems with yield and demand uncertainty

We study the production decisions of a firm that operates a co-production system (single input but multiple simultaneous outputs) with random yield and demand. The firm uses its outputs to meet multiple end-market demands with different quality requirements. Outputs serving a market segment may be a result of a blending process of different quality products of the co-production system. After the realisation of yield and before the realisation of demand, the firm has the option to upgrade the quality of outputs in order to better position itself to meet market demands. With the goal of maximising expected profits, we formulate a three stage stochastic programming problem, to investigate the value of intermediate upgrading flexibility. Using a stylised model of two products and two markets with different quality requirements, we characterise the optimal decisions and show that the quality upgrading policy is of a single-threshold type. Although upgrading is costly, it creates value for the firm through reducing total production cost and better managing the yield uncertainty. Positive correlation between demands of the end-markets decreases the value of upgrading. The more general model formulation offers the blueprint of a stochastic programming model that can be solved for realistic applications.