A Robust Optimization Model for the Strategic and Operational Design of the Oil Supply Chain

Document Type : Original Article

Authors

1 Assistant professor, Shiraz University of Technology.

2 M.Sc. student, Shiraz University of Technology.

10.52547/jimp.10.4.155

Abstract

The oil industry has a great share in the energy structure and the global economy, and the planning of strategic and operational levels of its supply chain is done with the objective of improving the competitive status of countries on the global level and economic development. In this paper, a mathematical model is presented for designing the crude oil supply chain through considering related facility location, demand allocation, transportation planning, and distribution. In the proposed model, environmental requirements for emitted greenhouse gas are considered such that the greenhouse gas emission from the transportation of oil may not be greater than a given limit. Since the exact values of parameters can rarely be determined in the real world, therefore, the uncertainty associated with parameters such as budget, transportation capacity, production units capacity, export volume, the amount of crude oil extraction and production, demand for refinery products and their production rate are considered in the proposed model. To handle the uncertainty of the model parameters, the robust optimization approach is applied. Numerical results verify the efficiency of the proposed model and show that the profitability of oil industry can be guaranteed by handling the uncertainties of parameters and appropriate production and distribution management.

Keywords

Main Subjects

References

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Journal of Industrial Management Perspective
Volume 10, Issue 4 - Serial Number 40
January 2021
Pages 155-191

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