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

Abstract

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.