Simultaneous Production and Distribution of Industrial Gas Supply-Chains

Abstract

In this paper, we propose a multi-period mixed-integer linear programming model for optimal enterprise-level planning of industrial gas operations. The objective is to minimize the total cost of production and distribution of liquid products by coordinating production decisions at multiple plants and distribution decisions at multiple depots. Production decisions include production modes and rates that determine power consumption. Distribution decisions involve source, destination, quantity, route, and time of each truck delivery. The selection of routes is a critical factor of the distribution cost. The main goal of this contribution is to assess the benefits of optimal coordination of production and distribution. The proposed methodology has been tested on small, medium, and large size examples. The results show that significant benefits can be obtained with higher coordination among plants/depots in order to fulfill a common set of shared customer demands. The application to real industrial size test cases is also discussed.