Multi-Objective Optimization of the Hydrocarbon Supply Chain under Price and Demand Uncertainty

VIDEO - Multi-Objective Optimization of the Hydrocarbon Supply Chain under Price and Demand Uncertainty

The energy sector is known for its enormous investments, despite the erratic behavior of the oil market, e.g., changes in crude oil price and demand. Therefore, strategic and tactical planning of the Hydrocarbon supply chain (HCSC), considering market uncertainty, is a significant area of research. HCSC construction involves the integration of crude oil and natural gas supply chains (SCs). In this research, a stochastic multi-objective optimization model is developed for the tactical planning of HCSC. The model considers price and demand uncertainty by formulating a two-stage stochastic programming model. Financial objectives are considered in terms of cost minimization and revenue maximization, while a non-financial objective is considered in terms of depletion rate minimization, i.e., reserves sustainability maximization. The model assists the decision-maker in quantifying the amount of production required to meet demand under different scenarios. Furthermore, the proposed model assists in evaluating the trade-offs among alternatives based on financial and non-financial objectives. A real-world HCSC is used to elucidate the practicability of the model, and some managerial insights are derived by conducting a sensitivity analysis. For instance, production can be reduced during high demand periods to maintain enough reserves, and the excess demand can be satisfied from the outside market based on medium-term contracts.

Ahmed Attia

Dr. Ahmed M. Attia

King Fahd University of Petroleum & Minerals

Ahmed M. Attia is an assistant professor at the Department of Industrial and Systems Engineering, KFUPM. His research interests are supply chain modeling and optimization, inventory and production control, quality control, eco-production scheduling, and renewable energy. His work has appeared in journals such as the International Journal of Production Research, Quality Engineering, Computers & Chemical Engineering, Sustainable Energy Technologies and Assessments, and Renewable Energy. He is an Editorial Assistant of the Journal of Quality in Maintenance Engineering, published by Emerald in the United Kingdom.

Monday, February 7, 2022
2:00 PM (KSA Time - GMT +3)
Organized by:
IRC for Smart Mobility and Logistics