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3314. Dynamic lot-sizing for LNG inventories

Invited abstract in session TB-49: Lot-sizing with energy aspects, stream Lot Sizing, Lot Scheduling and Production Planning.

Tuesday, 10:30-12:00
Room: M1 (building: 101)

Authors (first author is the speaker)

1. Onur Kilic
Department of Operations, University of Groningen

Abstract

We consider a lot-sizing problem motivated by liquefied natural gas (LNG). LNG is an alternative transportation fuel. It can be supplied from alternative sources with different quality and price, at different costs. LNG is subject to quality deterioration. It is yet possible to upgrade its quality by mixing different loads with different levels of quality. LNG is provided to customers via special-purpose facilities. We address the lot-sizing problem in such a facility. The problem entails finding a minimum-cost replenishment plan satisfying demands over a finite planning horizon, while meeting a minimum quality level. We initially formulate the problem as a mixed integer non-linear program, which we then linearize by means of standard linearization techniques. This model, however, is computationally too expensive to be used in practice. To overcome the computational challenge, we identify a class of feasible solutions and develop an efficient mixed-integer linear program by which we can find a minimum-cost solution within this specified class of solutions. We numerically illustrate that our approach provides optimal or close-to-optimal solutions for practical instances within very reasonable computational times.

Keywords

Status: accepted

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