An O(T³) Polynomial Algorithm for Crude Oil Transportation

Feng Chu (1) , Chengbin Chu (1) , Qingning Shen (1) , Haoxun Chen (1)

1 LOSI - Laboratoire d'Optimisation des Systèmes Industriels

Crude oil transportation is a central logistics operation in the petrochemical industry because the transportation cost of the crude oil represents a significant part in the cost of petrochemical products. In this paper, we consider the transportation by tankers or trucks. We show that under some realistic assumptions, this problem can be transformed into a single item lot sizing problem with limited production and inventory capacities. We develop a strongly polynomial dynamic programming algorithm to solve this latter problem. The main contribution of the paper are: 1) application of lot sizing models to the transportation problem; 2) an O(T³) algorithm is proposed to solve this problem; 3) the results obtained are not limited to the maritime transportation problem and can also be applied to the vehicle transportation problem in direct delivery case.

Keywords: computational complexity; crude oil; dynamic programming; inventory management; logistics; lot sizing; petrochemicals; petroleum industry; transportation

Domains: Operations Research [cs.RO]

Feng Chu, Chengbin Chu, Qingning Shen, Haoxun Chen. An O(T³) Polynomial Algorithm for Crude Oil Transportation. 2008 IEEE International Conference on Automation Science and Engineering (CASE 2008), Aug 2008, Arlington, United States. pp.303-308, ⟨10.1109/COASE.2008.4626471⟩. ⟨hal-02490899⟩