Joint production, transportation, and maintenance in downstream fuel supply chain

Abstract

This paper presents an integrated production, maintenance, and transportation strategy for a multi-site, multi-demand, multi-tank fuel production system. Firstly, each site’s economic fuel production plan is developed under a random demand and service level. Then, a transportation plan is proposed to collaborate between sites in case of unavailability site or unmet needs, minimizing the total cost. According to the correlation between production and maintenance, a periodically preventive maintenance strategy is developed for both refining machines and storage tanks, while minimizing the incurred costs by considering the influence of fuel production rate on their failure rates. Additionally, in this study, experimental tests are performed on an industrial tank, based on the real-life case of fuel companies, to investigate the tanks’ degradation due to corrosion phenomena. The resolution complexity of the analytical model arises from its stochastic nature due to random demands. Hence, a transformation to a deterministic form is performed. Numerical examples and a sensitivity study are presented to illustrate the effectiveness of the proposed methodology and the obtained results.