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A typical palm oil mill produces crude palm oil, crude palm kernel oil and other biomass from fresh fruit bunches. While the milling process is well established in the industry, insufficient research and development has been done on analyzing the operational performance of a mill. Factors such as operating time and fruit availability affect the performance of a palm oil mill (e.g., capital, operating and labor costs). This paper presents an input-output model to optimize the operations of a palm oil mill based on maximum economic performance. Following this, feasible operating range analysis (FORA) is performed to study the utilization and flexibility of the process. A palm oil mill case study in Malaysia is used to illustrate the proposed approach. Based on the optimized results, it was found that 37% reduction in capital cost and 49% increase in economic performance is achieved. Meanwhile, the utilization index of the mill during peak season increases from 0.48 to 0.76.

A palm oil mill produces crude palm oil, crude palm kernel oil and other biomass from fresh fruit bunches. Although the milling process is well established in the industry, insufficient research and development reported in optimising and analysing the operations of a palm oil mill. The performance of a palm oil mill (e.g., costs, utilisation and flexibility) is affected by factors such as operating time, capacity and fruit availability. This paper presents a hybrid combined mathematical programming and graphical approach to solve and analyse a palm oil mill case study in Malaysia. The hybrid approach consists of two main steps: (1) optimising a palm oil milling process to achieve maximum economic performance via input-output optimisation model (IOM); and (2) performing a feasible operating range analysis (FORA) to study the utilisation and flexibility of the developed design. Based on the optimised results, the total equipment units needed is reduced from 39 to 26 unit, bringing down the total capital investment by US$6.86 million (from 18.42 to 11.56 million US$) with 23% increment in economic performance (US$0.82 million/y) achieved. An analysis is presented to show the changes in utilisation and flexibility of the mill against capital investment. During the peak crop season, the utilisation index increases from 0.6 to 0.95 while the flexibility index decreases from 0.4 to 0.05. [ABSTRACT FROM AUTHOR]