--- title: Use of Mixed Integer Optimization in Greenfield Plant design description: Mixed integer optimization is used extensively to model greenfield projects and plant expansion designs and is much more effective than simulation. image: https://download.riverlogic.com/hubfs/Greenfeild%20plant%20design.jpeg --- ### Get in Touch [![logo](https://download.riverlogic.com/hs-fs/hubfs/logo.png?width=3153&height=398&name=logo.png "logo")](http://riverlogic.com) [![logo-hover](https://download.riverlogic.com/hs-fs/hubfs/logo-hover.png?width=3153&height=398&name=logo-hover.png "logo-hover")](http://riverlogic.com) - [Solutions](http://www.riverlogic.com/solutions) - [Capacity Planning](https://download.riverlogic.com/solutions/capacity-planning) - [Commodity Trading & Logistics](https://download.riverlogic.com/solutions/commodity-trading-and-logistics-optimization) - [Product Mix & Customer Profitability](https://download.riverlogic.com/solutions/product-mix-customer-profitability) - [Production Planning](https://download.riverlogic.com/solutions/production-planning-and-scheduling) - [Sales & Operations Planning](https://download.riverlogic.com/solutions/sales-and-operations-planning) - [Sourcing & Procurement](https://download.riverlogic.com/solutions/sourcing-and-procurement-optimization) - [Supply Chain & Logistics Optimization](https://download.riverlogic.com/solutions/supply-chain-optimization) - [Supply Chain Network Optimization](https://download.riverlogic.com/solutions/supply-chain-network-optimization) - [Trade Promotion Optimization](https://download.riverlogic.com/solutions/trade-promotion-optimization) - [Industries](https://download.riverlogic.com/industries) - [Building Products](https://download.riverlogic.com/industries/building-products) - [Chemicals](https://download.riverlogic.com/industries/chemicals) - [Consumer Packaged Goods](https://download.riverlogic.com/industries/consumer-packaged-goods) - [Food and Beverage](https://download.riverlogic.com/industries/food-beverage) - [Manufacturing](https://download.riverlogic.com/industries/manufacturing) - [Mining & Metals](https://download.riverlogic.com/industries/mining-and-metals) - [Oil & Gas](https://download.riverlogic.com/industries/oil-and-gas) - [Pharmaceuticals](https://download.riverlogic.com/industries/pharmaceuticals) - [Pulp & Paper](https://download.riverlogic.com/industries/pulp-and-paper) - [Utilities](https://download.riverlogic.com/industries/utilities) - [Technology](https://download.riverlogic.com/technology/prescriptive-analytics-platform) - [Our Platform](https://download.riverlogic.com/technology/prescriptive-analytics-platform) - [Prescriptive Analytics](https://download.riverlogic.com/technology/prescriptive-analytics) - [Resources](https://download.riverlogic.com/resources) - [Blog](https://download.riverlogic.com/blog) - [News](https://download.riverlogic.com/news-2) - [Testimonials](https://download.riverlogic.com/testimonials) - [Partners](https://download.riverlogic.com/partner-program) - [Our Partners](https://download.riverlogic.com/our-partners) - [About Us](https://download.riverlogic.com/about-us) - [Contact Us](https://download.riverlogic.com/contact-us) - [Our Board](https://download.riverlogic.com/board-of-directors) - [Our Leadership](https://download.riverlogic.com/leadership) - [Careers](https://download.riverlogic.com/careers-current) - Get in Touch Get in Touch [![Get in Touch](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/484375/8a2efec4-88ad-40a3-bc49-91f4a5e57e38.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/484375/8a2efec4-88ad-40a3-bc49-91f4a5e57e38) Share This [mailto:?subject=Use%20of%20Mixed%20Integer%20Optimization%20in%20Greenfield%20Plant%20design&body=https%3A%2F%2Fdownload.riverlogic.com%2Fblog%2Fuse-of-mixed-integer-optimization-in-greenfield-plant-design](mailto:?subject=Use%20of%20Mixed%20Integer%20Optimization%20in%20Greenfield%20Plant%20design&body=https%3A%2F%2Fdownload.riverlogic.com%2Fblog%2Fuse-of-mixed-integer-optimization-in-greenfield-plant-design) # Use of Mixed Integer Optimization in Greenfield Plant design One of the riskiest and most difficult decisions in business is whether or not to build a new plant and, if so, what configuration that plant should take. Bad decisions prior to construction can haunt you and your stakeholders for *decades*. What if space for work-in-process inventory is too small? What if your equipment selection is not properly balanced? How will the plant perform under different economic environments? **Mixed integer optimization has been used extensively to model greenfield and plant expansion designs across multiple industries**, including semiconductors, water utility, forest products, paper/FMCG, chemicals and more. Greenfield plant models may be used to test possible equipment and real-estate configurations for profitability, cash flow, NPV and ROI. ### Real-world Example Many of our customers have had great success using [mixed-integer optimization](https://download.riverlogic.com/a-brief-history-of-optimization-modeling-part-1) to conduct greenfield evaluations. An example evaluation conducted by one such customer involved analyzing various plywood manufacturers. The main goal was to try different combinations of capital equipment and different configurations of the plant floor with different sizes of inventory capacities in order to **determine the best possible mix of equipment and layout,** while taking into account: - Construction cost - Capital equipment cost - Real estate cost - Labor cost - Material handling cost - Demand profiles - And more. The overarching goal was, of course, to maximize ROI and profitability. **The optimization model demonstrated how subtle changes in inventory surge capacity or variations in a single piece of equipment could change the whole dynamic of the plant’s performance**, either adding or subtracting millions from the lifetime value of the assets. A key ingredient to success in this sort of modeling exercise was access to domain experts who helped define the right questions to ask, assist with data and help interpret results. ### Mixed Integer Optimization Over Simulation [Simulation methods](https://download.riverlogic.com/blog/simulation-a-must-for-optimization-based-scenario-planning)can also be used for such a modeling effort as designing a new plant. **However, by using the simulation approach we miss many of the dynamic reactionary insights gained by the use of optimization.** This is because optimization techniques can reroute flows to overcome new bottlenecks that arise in ways that a simulation engine cannot. Therefore, I would strongly recommend anyone designing a new facility to use a mixed integer optimization model in their design efforts. **Mixed integer optimization, by definition, will find the best possible result. Simulation simply finds a result, but not necessarily the best result.** [![Optimization or Simulation - Inline](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/484375/43605e26-328e-4d61-8471-766bbb911844.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/484375/43605e26-328e-4d61-8471-766bbb911844) You May Also Enjoy Reading #### About River Logic We’re on a mission to ensure companies across the globe drive maximum value with every decision they make, no matter how complex. [![Learn More](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/484375/a2bde0d6-69fe-4923-8616-00e630d07900.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/484375/a2bde0d6-69fe-4923-8616-00e630d07900) #### **Search** #### Explore Our Solutions We offer a suite of supply chain planning, network optimization, order allocation, and general planning solutions that are purpose-built for business users rather than data scientists. [![Explore Now](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/484375/244b60cb-8886-4e40-a50b-a0ab86c40833.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/484375/244b60cb-8886-4e40-a50b-a0ab86c40833) #### Ready to Chat with Someone? We’re ready to help! Just click the button below, and grab a time slot that works for your schedule. [![Schedule a call now](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/484375/798117a2-c8b3-49c5-aca3-cfe9c69c3b12.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/484375/798117a2-c8b3-49c5-aca3-cfe9c69c3b12) #### Solutions - #### [Solutions](https://www.riverlogic.com/solutions) - [Capacity Planning](https://www.riverlogic.com/solutions/capacity-planning) - [Commodity Trading & Logistics](https://www.riverlogic.com/solutions/commodity-trading-and-logistics-optimization) - [Product Mix & Customer Profitability](https://www.riverlogic.com/solutions/product-mix-customer-profitability) - [Production Planning](https://www.riverlogic.com/solutions/production-planning-and-scheduling) - [Sales & Operations Planning](https://www.riverlogic.com/solutions/sales-and-operations-planning) - [Supply Chain & Logistics Optimization](https://www.riverlogic.com/solutions/supply-chain-logistics-optimization) - [Supply Chain Network Optimization](https://www.riverlogic.com/solutions/supply-chain-network-optimization) - [Trade Promotion Optimization](https://www.riverlogic.com/solutions/trade-promotion-optimization) - #### [Technology](https://www.riverlogic.com/technology/prescriptive-analytics-platform) - [Our Platform](https://www.riverlogic.com/technology/prescriptive-analytics-platform) - [Prescriptive Analytics](https://www.riverlogic.com/technology/prescriptive-analytics) - #### [Industries](https://www.riverlogic.com/industries) - [Building Products](https://www.riverlogic.com/industries/building-products) - [Chemicals](https://www.riverlogic.com/industries/chemicals) - [Consumer Packaged Goods](https://www.riverlogic.com/industries/consumer-packaged-goods) - [Manufacturing](https://www.riverlogic.com/industries/manufacturing) - [Mining & Metals](https://www.riverlogic.com/industries/mining-and-metals) - [Oil & Gas](https://www.riverlogic.com/industries/oil-and-gas) - [Pulp & Paper](https://www.riverlogic.com/industries/pulp-and-paper) - [Utilities](https://www.riverlogic.com/industries/utilities) - #### [About Us](https://www.riverlogic.com/about-us) - [Our Board](https://www.riverlogic.com/board-of-directors) - [Our Leadership](https://www.riverlogic.com/leadership) - [Contact Us](https://www.riverlogic.com/contact-us) - #### [Partners](https://www.riverlogic.com/partner-program) - [Our Partners](https://www.riverlogic.com/our-partners) - #### [Resources](https://www.riverlogic.com/resources) - [Blog](https://blog.riverlogic.com/) - [Content Library](https://www.riverlogic.com/resources) - [News](https://www.riverlogic.com/news) - [Testimonials](https://www.riverlogic.com/testimonials) - [Careers](https://download.riverlogic.com/careers-current) [Facebook](https://www.facebook.com/River-Logic-480102222138357/) [LinkedIn](https://www.linkedin.com/company/river-logic/) [Youtube](https://www.youtube.com/channel/UCMJGbIQn9AX2kGojeRHhu-w/) - [Disclaimer](https://www.riverlogic.com/disclaimer) - [Support](mailto:support@riverlogic.com) - [Privacy Policy](https://www.riverlogic.com/privacy-policy) - [Sitemap](https://www.riverlogic.com/site-map) - [Terms & Conditions](https://www.riverlogic.com/terms-and-conditions) © 2022 [River Logic, Inc.](https://www.riverlogic.com) All rights reserved. ![](https://googleads.g.doubleclick.net/pagead/viewthroughconversion/985826217/?value=0&guid=ON&script=0) ![](https://dc.ads.linkedin.com/collect/?pid=173242&fmt=gif) [![Supply Chain Brief](https://widget.aggregage.com/images/supplychainbrief/badge-clear.gif "Supply Chain Brief")](https://www.supplychainbrief.com) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "JJ Buley", "url" : "https://download.riverlogic.com/blog/author/jj-buley" }, "dateModified" : "2019-02-12T06:59:43.856Z", "datePublished" : "2018-05-30T11:30:00.000Z", "headline" : "Use of Mixed Integer Optimization in Greenfield Plant design", "image" : [ "https://download.riverlogic.com/hubfs/Greenfeild%20plant%20design.jpeg" ], "mainEntityOfPage" : { "@id" : "https://download.riverlogic.com/blog/use-of-mixed-integer-optimization-in-greenfield-plant-design", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://download.riverlogic.com/hubfs/4.28_Logos/logo_mobile-1.png" }, "name" : "River Logic" } } ```