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Modeling downstream petroleum supply chain: The importance of multi-mode transportation to strategic planning

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  • Kazemi, Yasaman
  • Szmerekovsky, Joseph

Abstract

This paper proposes a deterministic mixed integer linear programming (MILP) model for downstream petroleum supply chain (PSC) network to determine the optimal distribution center (DC) locations, capacities, transportation modes, and transfer volumes. The model minimizes multi-echelon multi-product cost along the refineries, distribution centers, transportation modes and demand nodes. The relationship between strategic planning and multimodal transportation is further elucidated. A case study was considered with real data from the U.S. petroleum industry and transportation networks within Geographic Information System (GIS). A scenario analysis is also conducted to demonstrate the impact of key parameters on PSC decisions and total cost.

Suggested Citation

  • Kazemi, Yasaman & Szmerekovsky, Joseph, 2015. "Modeling downstream petroleum supply chain: The importance of multi-mode transportation to strategic planning," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 83(C), pages 111-125.
    • Handle: RePEc:eee:transe:v:83:y:2015:i:c:p:111-125
    DOI: 10.1016/j.tre.2015.09.004
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    10. de Assis, Leonardo Salsano & Camponogara, Eduardo, 2016. "A MILP model for planning the trips of dynamic positioned tankers with variable travel time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 372-388.
    11. Özceylan, Eren & Çetinkaya, Cihan & Erbaş, Mehmet & Kabak, Mehmet, 2016. "Logistic performance evaluation of provinces in Turkey: A GIS-based multi-criteria decision analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 323-337.
    12. Kumar, Sourabh & Barua, Mukesh Kumar, 2022. "A modeling framework and analysis of challenges faced by the Indian petroleum supply chain," Energy, Elsevier, vol. 239(PE).
    13. Klepikov, Vladimir Pavlovich & Klepikov, Vladimir Vladimirovich, 2020. "Quantitative approach to estimating crude oil supply in Southern Europe," Resources Policy, Elsevier, vol. 69(C).
    14. Chen, Jingxu & Wang, Shuaian & Liu, Zhiyuan & Guo, Yanyong, 2018. "Network-based optimization modeling of manhole setting for pipeline transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 113(C), pages 38-55.
    15. Bahman Naderi & Kannan Govindan & Hamed Soleimani, 2020. "A Benders decomposition approach for a real case supply chain network design with capacity acquisition and transporter planning: wheat distribution network," Annals of Operations Research, Springer, vol. 291(1), pages 685-705, August.
    16. Archetti, Claudia & Peirano, Lorenzo & Speranza, M. Grazia, 2022. "Optimization in multimodal freight transportation problems: A Survey," European Journal of Operational Research, Elsevier, vol. 299(1), pages 1-20.
    17. Aragão, Amanda & Giampietro, Mario, 2016. "An integrated multi-scale approach to assess the performance of energy systems illustrated with data from the Brazilian oil and natural gas sector," Energy, Elsevier, vol. 115(P2), pages 1412-1423.
    18. Chen, Haihong & Zuo, Lili & Wu, Changchun & Li, Qingping, 2019. "An MILP formulation for optimizing detailed schedules of a multiproduct pipeline network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 123(C), pages 142-164.
    19. Cortinhal, M. J. & Lopes, M. J. & Melo, M. T., 2018. "Impact of partial product outsourcing, transportation mode selection, and single-assignment requirements on the design of a multi-stage supply chain network," Technical Reports on Logistics of the Saarland Business School 15, Saarland University of Applied Sciences (htw saar), Saarland Business School.
    20. Baykasoğlu, Adil & Subulan, Kemal, 2016. "A multi-objective sustainable load planning model for intermodal transportation networks with a real-life application," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 207-247.
    21. Sylvia Mardiana, 2023. "Gasoline Policy Simulation to Increase Responsiveness Using System Dynamics: A Case Study of Indonesia’s Gasoline Downstream Supply Chain," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 109-118, November.

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