Research On The Uncertainty In Construction Supply Chain Of International Petrochemical Projects

Construction supply chain of international petrochemical projects with large scale construction and a number of one-off investments has many uncertain factors due to type of equipment required for the project, wide range of global procurement, big fluctuation in exchange rate and the complexity of international logistics. The fluctuations in exchange rate directly affect the total cost of petrochemical engineering project as an inevitable and important uncertainty. The study of the uncertainty due to exchange rate fluctuations in international petrochemical engineering is mostly qualitative analysis with little quantitative analysis.According to the current situation of research, the supply chain optimization model and the financial management tool value at risk were combined to research the fluctuations in exchange rate. Using an international petrochemical engineering project M as a case study, this article is aims for the establishment of a mathematical programming model for the supply chain of international petrochemical projects.The quantitative analysis of uncertainty in the process of international petrochemical projects supply chain is undertaken by using the sensitivity analysis method.In addition, in order to avoid the impact of the exchange rate uncertainty on the total cost of supply chain, this article adopts two methods that include the normal distribution assumption and VaR historical simulation to estimate the interval for fluctuation of exchange rate in the future. By contrast, the VaR historical simulation gives a more accurate estimate of the interval for fluctuation of exchange rate in the same confidence level. The contractor may select the reasonable confidence levels according to the actual situation of the project and determine the trend of exchange rate fluctuation by using the VaR historical simulation in order to reduce the impact of the fluctuation due to exchange rate on the total cost of the project.This article combines the optimization model of supply chain in international petrochemical engineering and the research pertaining risk management of the international mainstream and rectifies the estimation of uncertainty due to exchange rate fluctuations for international petrochemical engineering project. The study in this article provides an operable, sustainable and efficient basis of management system for international petrochemical engineering projects.Consequently, the management level of supply chain in international petrochemical projects can be greatly improved.