Manufacturing vegetable oil based biodiesel: An engineering management perspective

The search for alternative fuels has increased over the past years. In an era of high government subsidies for alternative fuel production, engineering managers will be tasked with evaluating the economic benefits of these proposed alternatives. This research was an exploratory process that examined biodiesel manufacturing as a potential alternative for cottonseed oil mills that could furnish an outlet for their product if their current market shrinks. The analysis was performed as possible future investment by an existing company with a no debt scenario. The cost modeling indicates that under current market conditions, cottonseed oil is not a viable alternative to traditional fossil fuels. With the expected wholesale price of $0.91 per liter of bio-diesel and a production cost of $1.28 per liter, the current feasibility of the operation is questionable without the inclusion of governmental subsidies.