Robust optimization for petroleum supply chain collaborative design and planning

Network design and planning is instrumental to improve the Petroleum Supply Chains (PSC) competitiveness, affected nowadays by the economic crisis, alternative energy competition and price related uncertainties. This poses the need of developing stochastic models for simultaneous profit maximization and risk minimization, however these stance difficult to solve due to problem complexity and representation issues. We propose a tractable robust optimization (RO) downstream PSC planning model to determine the depot and the transportation capacities to install, operate and close between the refineries and retail filling stations; the fair price costs and tariffs per product, company, location and route; and the multi-stage product transfer and inventory volumes per period while considering uncertainties in crude oil costs and refined product prices. Results are presented for the real case Portuguese PSC, identifying insights and opportunities for further research.