A mathematical tri-level programming model for designing an integrated dynamic petroleum product supply chain

Abstract

PurposeThe purpose of this paper is to design petroleum products’ supply chain management, which includes efficient integration of suppliers, manufacturers, storehouses and retailers.Design/methodology/approachThis paper proposes that a three-level supply chain will be turned into a bi-level supply chain of petroleum products by simultaneous integration of the middle level with the upstream and downstream levels. Also, it is integrally optimized by considering the multiple managerial flows' mutual results at various supply chain levels. Also, it is integrally optimized by considering the multiple managerial flows' mutual results at various supply chain levels.FindingsThe concepts of the design, structure and outputs are led by the model's solution. The model also responds to the variations in the market via coordination in the related decisions to the distribution, production and inventory issues, and also coordinating between the demands and production.Research limitations/implicationsThis paper has limited its analysis to definite values due to the over-expansion of calculations and analysis. Future works can study other aspects of the proposed model for a multi-level petroleum product supply chain in different states of certain parameters and time zones.Practical implicationsThe designed model can directly and transparently help the oil managers and decision-makers lower the costs of manufacturing, distribution and sales with respect to the determined criteria.Originality/valueThis paper establishes that effectiveness of the dynamic petroleum materials supply chain design will increase by considering maintained and increased production costs and coordinate management flows at all levels by supply chain creation’s integration.