DVRP with limited supply and variable neighborhood region in refined oil distribution

Abstract

Limited supply can be an emergent issue in refined oil distribution, which may increase operating cost and decrease gasoline station satisfaction with shortage. Hence, how to devise an optimal distribution scheme is the central problem for oil distribution companies. The main problem with limited supply involves: (I) depicting the dynamic efforts on vehicle routing driven by the demand and priority of gasoline stations, and (II) incorporating the efforts into variable distribution region division associated with oil depots. In this paper, we propose a multi-objective optimization model for dynamic vehicle routing problem with limited supply in oil distribution with variable neighborhood region. First, a preliminary multi-stage model for dynamic vehicle routing problem is designed, which takes operating cost, gasoline station satisfaction and priority into consider in the setting of limited supply. Based on the preliminary model, a variable neighborhood region division model is presented for oil depot supply and tanker delivery, in light of Fuzzy C-means algorithm and justifiable granularity principle. Finally, the experimental results show that the dynamic vehicle programming model with variable neighborhood performs better than other comparable scenarios at cost savings and satisfaction improvement.