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Integrated scheduling and inventory management of an oil products distribution system

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  • Relvas, Susana
  • Boschetto Magatão, Suelen N.
  • Barbosa-Póvoa, Ana Paula F.D.
  • Neves, Flávio

Abstract

The oil supply chain is facing new challenges due to emerging issues such as new alternative energy sources, oil sources scarcity, and price variability with high impact on demand and production and profit margins reduction. Additionally, the existence of large, complex and world wide spread businesses implies a complex system to be managed where distribution can be seen as one of the key areas that needs to be efficiently and effectively managed. Different types of distribution modes characterize the oil supply chain where the pipeline mode is one of the most complex to operate when having multiproduct characteristics. This paper addresses the planning of a generic oil derivatives transportation system characterized by a multiproduct pipeline that connects a single refinery to a storage tank farm. Two alternative mixed integer linear programming models (MILP) that aim to attain a set of planning objectives such as fulfilling costumers’ demands (which is mandatory) while minimizing the medium flow rate are developed. Additionally, final inventory levels are avoided to be excessively low. A real world scenario of a Portuguese company is used to validate and compare the two alternative MILP models developed in this paper.

Suggested Citation

  • Relvas, Susana & Boschetto Magatão, Suelen N. & Barbosa-Póvoa, Ana Paula F.D. & Neves, Flávio, 2013. "Integrated scheduling and inventory management of an oil products distribution system," Omega, Elsevier, vol. 41(6), pages 955-968.
    • Handle: RePEc:eee:jomega:v:41:y:2013:i:6:p:955-968
    DOI: 10.1016/j.omega.2013.01.001
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    Cited by:

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    3. Jonek-Kowalska Izabela, 2014. "Financial aspects of changes in the level of finished goods inventory in a mining enterprise," Gospodarka Surowcami Mineralnymi / Mineral Resources Management, Sciendo, vol. 30(4), pages 1-20, December.
    4. Kirschstein, Thomas, 2018. "Planning of multi-product pipelines by economic lot scheduling models," European Journal of Operational Research, Elsevier, vol. 264(1), pages 327-339.
    5. Li, Yanfeng & Szeto, W.Y. & Long, Jiancheng & Shui, C.S., 2016. "A multiple type bike repositioning problem," Transportation Research Part B: Methodological, Elsevier, vol. 90(C), pages 263-278.
    6. Sağlam, Ümit & Banerjee, Avijit, 2018. "Integrated multiproduct batch production and truck shipment scheduling under different shipping policies," Omega, Elsevier, vol. 74(C), pages 70-81.
    7. Matsumoto, Ken׳ichi & Andriosopoulos, Kostas, 2016. "Energy security in East Asia under climate mitigation scenarios in the 21st century," Omega, Elsevier, vol. 59(PA), pages 60-71.
    8. Mehrnoosh Taherkhani, 2020. "An MILP approach for scheduling of tree-like pipelines with dual purpose terminals," Operational Research, Springer, vol. 20(4), pages 2133-2161, December.
    9. Xiaofeng Xu & Ziru Lin & Jing Zhu, 2022. "DVRP with limited supply and variable neighborhood region in refined oil distribution," Annals of Operations Research, Springer, vol. 309(2), pages 663-687, February.
    10. Rossi, Roberto & Kilic, Onur A. & Tarim, S. Armagan, 2015. "Piecewise linear approximations for the static–dynamic uncertainty strategy in stochastic lot-sizing," Omega, Elsevier, vol. 50(C), pages 126-140.

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