Feasibility Study of the Location Selection for Oil Distribution Center with Sensitivity Analysis Case Study: A Sample Oil Company

Abstract

Nowadays, electricity is the energy source that is most conveniently and comfortably transferred to the consumer since it can be wired directly from the energy source to the user. It can be easily transformed into other energy types and kept in reserve. Natural gas is the primary fuel produced in Thailand due to its minimum cost and it’s also a sustainable alternative. However, due to the annual shutdown of gas pipelines and drilling sites are forced to use Fuel Oil (FO) and High-Speed Diesel (HSD) instead of natural gas to produce electricity. This paper is a study of the oil transportation systems of each alternative, which consists of alternative I being the main oil distribution center, alternative II being the main oil distribution center and the old oil distribution centers A and B, and alternative III being the new oil distribution centers C and D to study the feasibility of the location selection for oil distribution center during this shutdown period. According to the simulation and economic analysis, the Net Present Value (NPV) and Internal Rate of Return (IRR) of each alternative are known, which will be taken into account at the meeting with management. The result was found that alternative III should be chosen because it can satisfy both the quantitative and qualitative. Furthermore, we conducted the sensitivity analysis, it was found that increased investment selections. On the other hand, it will make investment selections.