Abstract
In recent years, more and more oil companies adopt initiative delivery mode to make the refined oil secondary distribution scheme. In this work, we focus on the optimization problem of refined oil secondary distribution based on the initiative distribution mode considering stochastic demand and the limited inventory capacity of each petrol station. We present a two-stage stochastic programming model that determines the replenishment quantity of each petrol station based on its existing stock and the available supply quantity of each oil depot, as well as transportation schedule. When the uncertainty in demand can be captured via a finite set of scenarios, the two-stage stochastic programming model is transformed into an equivalent deterministic mixed integer programming model that can be efficiently solved by CPLEX solver. The effectiveness of the two-stage stochastic programming model is verified by simulation on extensive computer-generated instances. To solve practical problems with a large number of scenarios, we propose a method to reduce the problem scale by merging similar scenarios. We demonstrate that compared to the optimal solution obtained from the model with all scenarios, the gap corresponding to the model with merged scenarios is always less than 1%. The results of the sensitivity analysis show that an increase in the inventory capacity leads to a decrease in the total cost within a certain range. The results of this study can help companies making refined oil secondary distribution plan.
Highlights
Refined oil logistics includes two stages: primary distribution and secondary distribution, which link refineries, transfer depots and petrol stations or clients
In this paper, we investigate the refined oil secondary distribution problem faced by oil companies which adopt initiative delivery mode
A decision is made about the replenishment quantity of refined oil transported from each depot to each petrol station, and the number of each type of vehicles used to perform each transportation task so as to minimize the sum of distribution costs and the expected recourse costs
Summary
Refined oil logistics includes two stages: primary distribution and secondary distribution, which link refineries, transfer depots and petrol stations or clients. Since all managerial decisions, including the supply volume of oil depots, the replenishment quantity of each petrol station, and the transportation vehicles to be used, are controlled by the oil company in initiative delivery mode, the oil company can overall optimize the refined oil secondary distribution plan so as to effectively reduce the inventory and transportation cost of the whole distribution system (Marquès(2010) et al [1]). When the day’s sales volume of each petrol station is unknown, a key issue for making the refined oil secondary distribution scheme based on the initiative delivery mode is how to determine the replenishment quantity and plan the vehicles distribution routes based on the existing stock of each petrol station and the available supply quantity of each oil depot, such that the sum of transportation costs and the expected recourse costs is minimized.
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