Stochastic Modeling Approach for Downstream Oil Supply Chain

C. Lima, S. Relvas, A.P. Barbosa-PĆ³voa
ABSTRACT:

Uncertainties arise from several sources and may introduce diverse risks within the oil supply chain (OSC), hindering its management, besides raising costs and lowering margins. The purpose of this work is to present a new stochastic approach to deal with different sources of uncertainty, by correlating the uncertainties through a probability tree diagram along with a scenario tree approach, and then applying the outputs into a multistage stochastic programming model that defines the tactical planning for the downstream OSC. Scenario reduction algorithms are used for generating smaller subsets of scenarios and reduce the problem complexity. An example based on the Portuguese OSC is used to illustrate the application of the new methodology. The results show that the proposed approach not only presents a great performance with respect to the operational and financial indicators, but also is able to accommodate the risks arising from unstable market conditions.

Publisher
Computer Aided Chemical Engineering (Published)
Date
Nov, 2017
Keywords
Uncertainty | Distribution Planning | Downstream Oil Supply Chain | Stochastic Programming | Scenario-based Approach

ARE YOU INTERESTED IN A COLLABORATION ?

Whether you are looking for a research group to support you on your research topic or you have a difficult problem to solve, contact us and possibly start a collaboration

Contact us