Volume 55, Number 6, November-December 2021
|Page(s)||3427 - 3446|
|Published online||15 November 2021|
A multi-objective model for an integrated oil and natural gas supply chain under uncertainty
Department of Construction Engineering and Management, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia
2 Department of Systems Engineering, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia
3 Interdisciplinary Research Center of Smart Mobility and Logistics, King Fahd University of Petroleum and Minerals, P.O. Box 5067, Dhahran 31261, Saudi Arabia
* Corresponding author: firstname.lastname@example.org
Accepted: 16 October 2021
The oil and gas networks are overlapped because of the inclusion of associated gas in crude oil. This necessitates the integration and planning of oil and gas supply chain together. In recent years, hydrocarbon market has experienced high fluctuation in demands and prices which leads to considerable economic disruptions. Therefore, planning of oil and gas supply chain, considering market uncertainty is a significant area of research. In this regard, this study develops a multi-objective stochastic optimization model for tactical planning of downstream segment of oil and natural gas supply chain under uncertainty of price and demand of petroleum products. The proposed model was formulated based on a two-stage stochastic programming approach with a finite number of realizations. The proposed model helps to assess various trade-offs among the selected goals and guides decision maker(s) to effectively manage oil and natural gas supply chain. The applicability and the utility of the proposed model has been demonstrated using the case of Saudi Arabia oil and gas supply chain. The model is solved using the improved augmented ε-constraint algorithm. The impact of uncertainty of price and demand of petroleum products on the obtained results was investigated. The Value of Stochastic Solution (VSS) for total cost, total revenue, and service level reached a maximum of 12.6%, 0.4%, and 6.2% of wait-and see solutions, respectively. Therefore, the Value of the Stochastic Solution proved the importance of using stochastic programming approach over deterministic approach. In addition, the obtained results indicate that uncertainty in demand has higher impact on the oil and gas supply chain performance than the price.
Mathematics Subject Classification: 90B15 / 90C15 / 90C29
Key words: Oil and gas supply chain / optimization under uncertainty / tactical decision making / Pareto efficient solution / multi-objective optimization
© The authors. Published by EDP Sciences, ROADEF, SMAI 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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