A multiproduct gasoline supply chain with product standardization and postponement strategy

Rafael Bernardo Carmona Benitez () and Hector Cruz
Additional contact information
Rafael Bernardo Carmona Benitez: Universidad Anahuac Mexico (Mexico)
Hector Cruz: Universidad Anahuac Mexico (Mexico)
Authors registered in the RePEc Author Service: Rafael Bernardo Carmona-Benítez

No 23004, Working Papers of Business and Economics School. Anahuac University (Mexico).

Abstract: The development of the global economy is highly dependent on energy (Chen & Wu, 2017). The energy sector is formed by the fossil fuel industries, the electric power industry, the nuclear power industry, and the renewable energy industry. The oil industry is one of the fossil fuel industries with fast growth, 40.5% from 1980 to 2016 (OPEC, 2017). This growth is due to the globalisation of the oil industry (Sahebi, Nickel, & Ashayeri, 2014) that has generated millions of jobs, developed infrastructure, and enhanced economies through a global supply chain. Hence, the study of oil supply chain and its derivatives is of the great importance for the development of the economy of any country in the world, and its study is a main interest for oil companies that must develop strategies to achieve advantages against their competitors (Sahebi, Nickel, & Ashayeri, 2014) mainly by developing supply chain strategies to maximize efficiencies (Chima, 2007) and minimize the costs of production and supply of finished products to consumers (Lisita, Levina, & Lepekhin, 2019). Knowing the importance of the energy sector to the economy, in 2013, Mexico enacted an energy constitutional reform that changes, between other things, the supply chain of gasoline obligating Pemex (Mexican state-owned company) to share its pipelines and storage terminals (located at ports, refineries and/or distribution centers) with other oil companies. The main goal of the supply chain of gasoline proposed in the reform is to lower gasoline prices to consumers by enhancing competition and finishing Pemex monopoly. However, in this paper, we analyze the viability of the supply chain of gasoline proposed in this reform, and we find that a supply chain problem is created when multiple oil companies share pipelines and storage terminals to simultaneously distribute different types of gasoline as the reform dictates, because costs increase due to the production of interfaces created each time two different types of gasoline are sequentially shipped through the same pipeline (Fig 1) (an interface is a blend of gasoline called “transmix gasoline†or “mid-grade gasoline" produced and distributed, at the end of each batch, through the same pipeline because of the consecutive distribution of gasoline in a process called batching (Wang et al., 2008)). Therefore, the aim and main contribution of this paper is to design and optimize a supply chain of gasoline that allows multiple oil companies share pipelines and storage terminals to simultaneously distribute different types of gasoline at minimum cost.

Keywords: gasoline; supply chain (search for similar items in EconPapers)
Date: 2023-02
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://revistas.anahuac.mx/public/REPEC/amj/wpape ... pply_chain_23004.pdf (application/pdf)

Related works:
Journal Article: A multiproduct gasoline supply chain with product standardization and postponement strategy (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:amj:wpaper:23004

Access Statistics for this paper

More papers in Working Papers of Business and Economics School. Anahuac University (Mexico).
Bibliographic data for series maintained by Agustin Moya ().