Refinery and cracker feedstock procurement optimization

Auction design

With Level 4: Optimization, a buyer can evaluate combinations of offers. The plant’s feedstock specifications, inventory limits and delivery windows determine which combinations are feasible.

Offering

Supplier offers for approved feedstocks, delivery windows and commercial terms. Separate refinery and cracker configurations use their own feedstock specifications and operating constraints.

Quantity

Quantities in the unit defined for each feedstock, such as barrels or tonnes. Offers retain their original units; agreed conversion and valuation rules make them comparable.

Product specification

The buyer defines acceptable feedstocks and quality ranges. A refinery buyer can use assay data to value each feedstock. A cracker buyer can use feedstock composition and expected product yields.

Delivery

Approved receipt points, delivery windows, parcel sizes and available logistics. Inventory and receiving limits restrict which combinations can be accepted.

Price being bid

Supplier prices or index differentials in the defined currency and unit for each feedstock. Freight, handling and other specified costs enter the evaluation separately.

Commercial choices

Suppliers can propose alternative parcels or linked quantities under the published bid rules. The buyer defines minimum and maximum commitments, substitution limits and which offers are mutually exclusive.

Optimization objective

Select the feasible portfolio with the best modeled net value, accounting for purchase and logistics costs and the buyer’s feedstock valuation. A lowest-cost objective can be used where the required output and quality are fixed. The objective and model boundaries must be agreed before bidding.

Commercial value

A lower-priced feedstock can cost more to deliver or yield less of the products the plant needs. Comparing feasible mixes lets the buyer weigh those trade-offs before awarding supply.