Primary logistics planning of oil products under the imbalance of supply and demand

Abstract

This paper intends to complete the primary logistics planning of oil products under the imbalance of supply and demand. An integrated mathematical programming model is developed to simultaneously find the balance between supply and demand, and optimize the logistics scheme. The model takes minimum logistics cost and resource adjustment cost as the objective function, and takes supply and demand capacity, transportation capacity, mass balance, and resource adjustment rules as constraints. Three adjustment rules are considered in the model, including resource adjustment within oil suppliers, within oil consumers, and between oil consumers. The model is tested on a large-scale primary logistics of a state-owned petroleum enterprise, involving 37 affiliated refineries, 31 procurement departments, 286 market depots and dedicated consumers. After the unified optimization, the supply and demand imbalance is eased by 97% and the total cost is saved by 7%, which proves the effectiveness and applicability of the proposed model.