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Distribution planning of bulk lubricants at BP Turkey

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Wednesday 28 April 2010, 13:00
LT7, Management School

Bülent Çatay

Sabanci University

Abstract: We discuss the distribution planning of bulk lubricants (lube oils) at BP Logistics Operations of Turkey. With its specific characteristics and elements of the distribution system the problem differs from many of the transportation problems addressed in the literature. The problem is a multi-product, multi-period distribution problem which involves the scheduling of customer orders and routing of tank trucks such that total transportation related costs are minimized. The fleet is heterogeneous and consists of multi-compartment vehicles where each compartment can only be assigned to a single product. We model this problem as a 0-1 mixed integer linear program. Since the model is intractable for real-life industrial environment we propose two heuristic approaches and investigate their performances. The first approach is a linear programming relaxation-based algorithm while the second is a threshold accepting heuristic. We propose two variants of the latter heuristic: the first uses the distance priority whereas the second has a due date priority. The numerical results show that both threshold accepting heuristics are able to provide good results fast.

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