Solving the petroleum replenishment and routing problem with variable demands and time windows
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Solving the petroleum replenishment and routing problem with variable demands and time windows Yan Cheng Hsu1 · Jose L. Walteros1 · Rajan Batta1 © Springer Science+Business Media, LLC, part of Springer Nature 2018
Abstract In this paper we develop a methodological framework for designing the daily distribution and replenishment operations of petroleum products over a weekly planning horizon by taking into account the perspectives of both the transporter and its customers. The proposed approach considers the possibility of having late deliveries due to the variability of the customers’ demands and expected time windows. We first develop an inventory model for the customers to identify the optimal order quantities and time windows. Then, we solve a sequence of mixed-integer optimization models for designing distribution routes based on the order quantities and time windows selected by the inventory models. We design the optimization models so that late deliveries are balanced among the customers in order to mitigate the overall customer dissatisfaction. We test the proposed approach by solving a set of instances adapted from the literature. The empirical results show that the proposed approach can be used for designing the distribution plan for delivering petroleum products in conditions where the operational capabilities of the transporter are limited for generating optimal on-time plans. Keywords Gasoline distribution · Vehicle routing with time windows · Vehicle routing and scheduling
1 Introduction The transportation industry plays a critical role in today’s global economy fostering the operations of nearly all other industries around the world. Alone in the U.S., according to the U.S. Federal Highway Administration, about 20 billion tons of goods worth more than $10 trillion were moved across the country just in 2012 (Strocko et al. 2014). Transportation
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Jose L. Walteros [email protected] Yan Cheng Hsu [email protected] Rajan Batta [email protected]
1
Department of Industrial and Systems Engineering, University at Buffalo, The State University of New York, 342 Bell Hall, Buffalo, NY 14260, USA
123
Annals of Operations Research
related goods and services represented approximately 11% of the U.S. gross domestic product in 2000, only being surpassed by the housing, health-care, and food industries (Cohn et al. 2007; Nguyen et al. 2015). Among the total goods transported in the U.S. in 2012, more than 1.8 billion tons corresponded to gasoline, diesel, and other petroleum-based products, thus becoming the top sixth most transported commodities in the country (Strocko et al. 2014). Petroleum products are still one of the world’s most traded commodities, as they continue being the main energy source for the transportation industry. According to the U.S. National Academy of Sciences (Committee on America’s Energy Future, National Academy of Sciences 2009), petroleumbased fuels represent about 98% of the energy sources used for mobilizing both people and freight in the U.S. In addition to their use as fuel
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