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Course Code
OGCM-053
Petrochemicals Product Costing & Profitability Analysis
- This five-day course provides petrochemical professionals with the knowledge and practical skills required to accurately calculate product costs, analyze profitability, and support strategic business decisions. Participants will learn industry best practices for costing, cost allocation, profitability measurement, pricing decisions, and cost optimization through real-world petrochemical case studies and hands-on exercises.
Learning Outcomes
- Understand the key cost drivers within petrochemical manufacturing processes.
- Develop accurate product costing models using recognized costing methodologies.
- Analyze product profitability using financial and operational performance indicators.
- Evaluate the impact of feedstock prices, utilities, and market changes on profitability.
- Apply cost-based decision-making techniques to improve operational and financial performance.
- Build practical costing and profitability models using Excel.
- Recommend cost optimization and profitability improvement initiatives for petrochemical operations.
By the end of this course, participants will be able to:
Course Contents
- Session 1: Petrochemical Industry Overview
- Petrochemical Value Chain
- Major Products & Feedstocks
- Manufacturing Processes
- Session 2: Cost Accounting Fundamentals
- Cost Classification
- Direct vs. Indirect Costs
- Fixed vs. Variable Costs
- Session 3: Product Cost Components
- Raw Materials & Feedstock
- Utilities & Labor
- Maintenance & Overheads
- Session 4: Process Costing
- Cost Flow in Continuous Production
- Yield & Production Losses
- Cost per Ton Calculation
- End of Day Case Study
- Costing One Ton of Polyethylene
- Identify all cost components
- Calculate total manufacturing cost
- Determine unit production cost
- Session 1: Product Costing Methods
- Process Costing
- Standard Costing
- Activity-Based Costing (ABC)
- Session 2: Manufacturing Cost Allocation
- Utility Allocation
- Overhead Allocation
- Shared Resource Allocation
- Session 3: Cost Variance Analysis
- Material Variance
- Labor Variance
- Utility Variance
- Session 4: Costing Model Development
- Cost Sheet Design
- Cost Calculation Using Excel
- Cost Validation Techniques
- End of Day Case Study
- Allocating Costs in an Olefins Plant
- Allocate shared production costs
- Compare different allocation methods
- Evaluate impact on unit product cost
- Session 1: Revenue & Margin Analysis
- Sales Revenue
- Gross Margin
- Contribution Margin
- Session 2: Profitability Measurements
- EBITDA
- Operating Profit
- Net Profit
- Session 3: Break-even Analysis
- Fixed Cost Recovery
- Break-even Volume
- Margin of Safety
- Session 4: Product Portfolio Analysis
- High-Profit Products
- Low-Profit Products
- Product Mix Optimization
- End of Day Case Study
- Which Product Should Be Discontinued?
- Analyze product profitability
- Evaluate contribution margins
- Recommend portfolio improvements
- Session 1: Managerial Cost Analysis
- Relevant Costs
- Opportunity Costs
- Sunk Costs
- Session 2: Pricing Decisions
- Cost-Plus Pricing
- Target Costing
- Market-Based Pricing
- Session 3: Sensitivity Analysis
- Feedstock Price Changes
- Utility Cost Changes
- Exchange Rate Impact
- Session 4: Scenario Planning
- Best-Case Scenario
- Expected Scenario
- Worst-Case Scenario
- End of Day Case Study
- Impact of a 25% Increase in Natural Gas Prices
- Recalculate production costs
- Assess profitability changes
- Recommend pricing and cost optimization actions
- Session 1: Cost Optimization
- Energy Efficiency
- Yield Improvement
- Waste Reduction
- Session 2: Performance Measurement
- Manufacturing Cost KPIs
- Profitability KPIs
- Cost Control Indicators
- Session 3: Profitability Dashboards
- Cost Dashboard
- Margin Dashboard
- Executive Reporting
- Session 4: Strategic Profitability Model
- Integrated Cost Model
- Sensitivity Dashboard
- Management Recommendations
Day 1: Fundamentals of Petrochemical Product Costing
Day 2: Cost Allocation & Costing Methods
Day 3: Profitability Analysis
Day 4: Cost-Based Decision Making
Day 5: Profitability Improvement & Strategic Analysis
Final Case Study
Improving Profitability in a Petrochemical Complex
Our Methodology
- Make coaching and monitoring innovative and using modern
- Media training also using on the go training by using interactive means and focusing on
- The exercises, practical applications and real situations study
- Live delivery method, instructor-led training
- Experienced consultant, trainers, and professional
- Qualified trainer with high-level experience
Attendance Reports
- Send daily attendance reports to training departments
- Send full attendance report to training dep. by the end of the course
- Attend 100 % from the course days also provide daily
- Issue attendance certificate for participant who attend minimum 80% from the course duration
Pre/Post Reports
- Pre- assessment before starting training
- Post assessment after finishing training
- Full report for the difference between Pre-& Post assessment
Who Should Attend
- Cost Accountants, Financial Analysts, and Management Accountants.
- Production, Operations, Process, and Plant Engineers.
- Planning, Budgeting, Commercial, Supply Chain, Procurement, and Business Development professionals.
- Plant Managers, Operations Managers, Finance Managers, and Decision Makers involved in product costing and profitability analysis.
- Anyone responsible for improving manufacturing efficiency, product profitability, and strategic cost management within the petrochemical industry.
This course is designed for professionals working in petrochemical and chemical manufacturing organizations, including:
