A comprehensive annual delivery program for upstream liquefied natural gas supply chain

Fatih Mutlu, Mohamed K. Msakni, Hakan Yildiz, Erkut Sönmez and Shaligram Pokharel

European Journal of Operational Research, 2016, vol. 250, issue 1, 120-130

Abstract: Developing a cost-effective annual delivery program (ADP) is a challenging task for liquefied natural gas (LNG) suppliers, especially for LNG supply chains with large number of vessels and customers. Given significant operational costs in LNG delivery operations, cost-effective ADPs can yield substantial savings, adding up to millions. Providing an extensive account of supply chain operations and contractual terms, this paper aims to consider a realistic ADP problem faced by large LNG suppliers; suggest alternative delivery options, such as split-delivery; and propose an efficient heuristic solution which outperforms commercial optimizers. The comprehensive numerical study in this research demonstrates that contrary to the common belief in practice, split-delivery may generate substantial cost reductions in LNG supply chains.

Keywords: OR in maritime industry; Annual delivery planning problem; LNG supply chain; Large-scale optimization (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:250:y:2016:i:1:p:120-130

DOI: 10.1016/j.ejor.2015.10.031

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