A hierarchical approach for designing the downstream segment for a supply chain of petroleum production systems

Document Type: Research Paper


1 School of Industrial Engineering, Islamic Azad University., South Tehran Branch

2 Middle East Technical University (METU) Ankara, Turkey


Strategic decisions in a supply chain are the most important decisions for petroleum production systems. These decisions, due to high costs of transportation and storing, are costly and affected by the tactical and operational decisions in uncertain situations. In this article, we focus on designing a downstream segment for a supply chain of petroleum production systems. For this purpose, we will propose a two- stage approach considering a hierarchical structure, including the mathematical optimization model for determining strategic decisions in a leader problem and a simulation model for determining tactical and operational decisions in a follower problem. In the first stage, strategic decisions are made by solving a new mathematical model to obtain the location of depots and their capacities, transportation facilities, the volume of annual production, annual flow from refinery to depots and from depots to markets regions. In the second stage, we face some queuing systems where we aim to determine the number of loading and unloading platforms and order volume. Finally, the proposed model is applied in a real-world problem. The results show the suitable performance of the proposed model.


Main Subjects

Cafaro, D. C.; Cerda, J. (2008a) Efficient Tool for the Scheduling of Multiproduct Pipelines and Terminal Operations.Ind. Eng. Chem. Res. 47, 9941–9956. (14)


Cafaro, d. c., &Cerda, j. (2008b).dynamic scheduling of multiproduct pipelines with multiple delivery due dates. Computers & Chemical Engineering, 32, 728–753.


Cafaro, d. c., &cerda, j. (2004).optimal scheduling of multiproduct pipeline systems using a non-discrete milp formulation. Computers & Chemical Engineering, 28, 2053–2068.


Dempster, M. A. H., Pedron, N. H., Medova, E. A., Scott, J. E., &Sembos, A. (2000). Planning logistics operations in the oil industry.Journal of Operational Research Society, 51(11), 1271–1288.


Escudero, L. F., Quintana, F. J., &Salmeron, J. (1999). CORO, a modeling and an algorithmic framework for oil supply, transformation and distribution optimization under uncertainty. European Journal of Operational Research, 114(3), 638–656.


Ghassemi-Tari, F.; Olfat, L., (2007): Development of a Set of Algorithms for the Multi-Project Scheduling Problems, Journal of Industrial and Systems Engineering, 1(1), PP. 23-36.


Kabirian, A., (2009), Hybrid Probabilistic Search Methods for Simulation Optimization, Journal of Industrial and Systems Engineering, 2(4), PP: 259-270.


Kim, Y., Yun, C., Park, S. B., Park, S., & Fan, L. T. (2008).An integrated model of supply network and production planning for multiple fuel products of multi-site refineries.Computers & Chemical Engineering, 32(11), 2529-2535.


MirHassani SA.(2008), An operational planning model for petroleum products logistics under uncertainty.Applied Mathematics and Computation,196:744,51.


MirHassani, S.A.,Noori, R.,(2011), Implications of capacity expansion under uncertainty in oil industry, Journal of Petroleum Science and Engineering, vol. 77 pp.194–199.


Neiro S.M.S, Pinto J.M.(2004), A general modeling framework for the operational planning of petroleum supply chains. Computers and Chemical Engineering, 28:871,96.


Nikandish, N.; Eshghi, K.,; and Torabi, S.A. (2009), Integrated Procurement, Production and Delivery Scheduling in a Generalized three Stage Supply Chain, Journal of Industrial and Systems Engineering, 3(3), PP. 189-212.


Pinto, J. M., Joly, M., & Moro, L. F. L. (2000). Planning and scheduling models for refinery operations. Computers and Chemical Engineering, 24, 2259–2276.


Pitty, Suresh S., Li,Wenkai, Adhitya, A, and Srinivasan,R., and Karimi, I.A., (2008), Decision support for integrated refinery supply chains, Part 1. Dynamic simulation, Computers and Chemical Engineering, 32 2767–2786.


Sajadijfar,M; Pourghannad, B., (2011), An Integrated Model for a Two-supplier Supply Chain with Uncertainty in the Supply, Journal of Industrial and Systems Engineering, 5(3), PP. 154-174.


Sear TN.(1993), Logistics planning in the downstream oil industry. Journal of Operations Research Society, 44 (1):9e17


Thesis :

RezaFarahibilavi,Designing mathematical model of production planning for shiraz refinery (Fuzzy approach), ,TarbiatModares University , Humanist Sciences branch, 2010.