Shipment planning at oil refineries using column generation and valid inequalities

In this paper we suggest an optimization model and a solution method for a shipment planning problem. This problem concerns the simultaneous planning of how to route a fleet of ships and the planning of which products to transport in these ships. The ships are used for moving products from oil refineries to storage depots. There are inventory levels to consider both at the refineries and at the depots. The inventory levels are affected by the process scheduling at the refineries and demand at the depots. The problem is formulated using an optimization model including an aggregated representation of the process scheduling at the refineries. Hence, we integrate the shipment planning and the process scheduling at the refineries. We suggest a solution method based on column generation, valid inequalities, and constraint branching. The solution method is tested on data provided by the Nynas oil refinery company and solutions are obtained within 4 hours, for problem instances of up to 3 refineries, 15 depots, and 4 products when considering a time horizon of 42 days. (C) 2004 Elsevier B.V. All rights reserved.