Scheduling Ocean Transportation of Crude Oil

Abstract

Management Science, 33, p. 335-346. (Nominated for 1987 International Management Science Achievement Award.)The article of record as published may be found at http://links.jstor.org/sici?sici=0025-1909%28198703%2933%3A3%3C335%3ASOTOCO%3E2.0.CO%3B2-FNominated for 1987 International Management Science Achievement Award.A crude oil tankerscheduling problem faced by a major oil company is presented and solved using an elastic set partitioning model. The model takes into account all fleet cost components, including the opportunity cost of ship time, port and canal charges, and demurrage and bunker fuel. The model determines optimalspeeds for the ships and the best routing of ballast (empty) legs, as well as which cargos to load on controlled ships and which to spot charter. All feasible schedules are generated, the cost of each is accurately determined and the best set of schedules is selected. For the problems encountered, optimal integer solutions to set partitioning problems with thousands of binary variables have been achieved in less than a minute