A pinch analysis approach to project selection problem

摘要

Project selection is a very important decision that every firm has to take; in fact, this decision plays a major role in the prosperity of the firm. Pinch analysis, which was initially developed to conserve energy and improve energy efficiency in industrial process, is now being extended to non-conventional areas. In this paper, pinch analysis is applied to select multiple independent projects from a large pool of viable projects, subject to budget constraints. The underlying mathematical optimization problem is discussed and a graphical approach to obtain optimal insightful solutions is presented. Applicability of the proposed methodology is demonstrated through an illustrative example of energy conservation in the Indian cement industry.