A New Formulation Based on Customer Delivery Patterns for a Maritime Inventory Routing Problem

Abstract

In this paper we address a maritime inventory routing problem encountered by one of the world’s largest producers of liquefied natural gas (LNG). The producer is responsible for the LNG inventories at the liquefaction plant, the loading port with a limited number of berths, and the routing and scheduling of a heterogeneous fleet of LNG ships. In addition, the producer has to fulfill a set of long-term contracts to customers all around the world. The producer’s goal is to create a minimum-cost long-term delivery program that respects the long-term contracts while maximizing revenue from selling LNG in the spot market. We introduce a new formulation for this problem arising from a novel decomposition scheme based on delivery patterns. To solve this formulation, we develop an exact branch-price-and-cut algorithm. Computational results show that this new formulation provides much tighter lower bounds than the only known mixed integer programming (MIP) formulation for this problem. Furthermore, on a set of 27 benchmark instances, the proposed branch-price-and-cut method clearly outperforms a commercial MIP solver applied to the existing MIP model.