Linear programming solution for transporting multiple petroleum products using pipelines

This paper describes a three-phase optimization model for the transportation of multiple petroleum products using pipelines, where the aim is to ensure that all depots are able to fulfill their demand for each petroleum product while minimizing costs. The first phase involves solving a mixed integer programming model for making resource allocation plans, which minimizes the number of products transported for each time period. The second phase uses the output from the first phase as the input to a quadratic mixed integer programming model to create a scheduling plan, which minimizes pumping costs by selecting the optimal pumping configuration and flow rate. We employ dynamic programming to increase the efficiency of the algorithm, which enables a commercial linear programming solver to solve problem instances of practical size. Finally, the third phase post-processes the solution from the second phase to minimize mixture cost using dynamic programming. This research was conducted on behalf of a prominent petroleum company in mainland China, resulting in annual savings exceeding 1 million Yuan.