A simulation-based multi-objective optimization study of the fleet sizing problem in the offshore industry
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A simulation-based multi-objective optimization study of the fleet sizing problem in the offshore industry Hamidreza Eskandari and Ehsan Mahmoodi Industrial Engineering Department, School of Engineering, Tarbiat Modares University, Tehran 14117, Iran. E-mails: [email protected]; [email protected]
Abstract
Oil companies usually hire a number of offshore supply vessels (OSVs) under long-term contracts for offshore supply logistics. If the number of long-term chartered vessels is not sufficient to satisfy platform demands, one or more OSVs would be required under short-term contracts. In this article two policies for OSV routing to installations are compared: routing based on a fixed schedule, currently used in Iranian offshore oil company and routing based on platform demands. A discrete-event simulation model is developed and simulation-based optimization is used to find near-optimal fleet size and composition that minimize expected total cost subject to a minimum desired expected platform service level. Changing the platform service level constraint allows results to be obtained for multiple best compromise solutions along a performance trade-off curve. For each routing policy, an optimal trade-off curve is obtained using simulation-based optimization. Performance evaluation of routing policies is compared at different service levels. Experimental results indicate that the routing based on platform demands dominates the routing based on a fixed schedule under near-optimal decision variable settings.
Maritime Economics & Logistics advance online publication, 16 July 2015; doi:10.1057/mel.2015.21
Keywords: offshore industry; logistics; simulation-optimization; fleet sizing problem
Introduction Oil and gas production from oil fields located in the sea, is known as offshore oil industry. About 35 per cent of world oil production is produced in offshore © 2015 Macmillan Publishers Ltd. 1479-2931 Maritime Economics & Logistics www.palgrave-journals.com/mel/
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resources (Offshore Outlook, 2012). The offshore activity is extensive and getting more complex, so optimization of production processes has become an issue of great concern for oil companies. Because of the large investments involved in the offshore oil industry, even small operational improvements could result in substantial cost reductions and savings. There are two different types of logistics in this market: upstream and downstream. Upstream logistics is the operation of providing the required equipment and materials to the production and drilling units, while downstream logistics focuses on the shipment of oil and gas to consumers (Kaiser, 2010). The production of offshore oil and gas cannot be accomplished uninterruptedly unless installations are supplied seamlessly. It is generally understood that the supply of offshore drilling and production units is such a challenging logistics task. The supply operation requires a fleet of different vessels. The main type of vessel playing a critical role in upstream logistics is the o
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