Designing an integrated model for a multi-period, multi-echelon and multi-product petroleum supply chain

Abstract

A petroleum supply chain is a large complex supply chain composed of several sub-problems. Numerous studies have focused on solving a portion of these problems, which led to a non-optimal solution. This study addresses a new multi-period multi-echelon and multi-transportation integrated petroleum supply chain model to obtain a global optimal solution. The main feature of this paper is to design an integrated supply chain model that considers both installation and capacity expansion of pipeline routes and facilities simultaneously, and optimizes location-allocation facilities and routes, capacity expansion, inventory, production, exportation and importation, as well as routing and transportation modes over a vast geographical area. To achieve this, a deterministic mixed-integer linear problem was developed and applied to a real world problem based on the information derived from Iran's petroleum chain. Numerous scenarios and sensitivity analyses have been presented for different cases to deepen more in the model. They showed that the optimal solution is less sensitive to variations of the cost parameters, but changes in the amount of demands and injected crude oil change the objective value remarkably. In general, the analysis showed that the developed model has the ability to present the best strategy in complex market situations.