Developing an optimization model for efficient distribution of petroleum products: A case study of Tema Oil Refinery (TOR)

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This research explores linear programming optimization models for distributing products by tankers in a land transportation system. Tema Oil Refinery (TOR) is used as a case study. The transportation problem is of great economic significance to the Government of Ghana, whose economy is traditionally dominated to a large extent by the oil sector. Any enhancement in the existing transportation procedure has the potential for significant cost savings for the Ghanaian economy. A linear programming model for the TOR problem is constructed in this paper. A set of nodes and arcs is used to form the network, and the decision variables are the different transportation routes. The objective function minimized is formed by summing the products of the decision variables and their corresponding cost coefficients. The constraints of the model include capacity at the depots and the demands of the Oil Marketing Companies (OMCs). The scope of this research covered five (5) OMCs across three (3) capital cities namely; Accra, Kumasi and Takoradi. The resulting linear formulation is greatly simplified and it was solved using Solver (an in-built optimisation tool) in Microsoft EXCEL.
Thesis submitted to the Department of Business Administration, Ashesi University College, in partial fulfillment of Bachelor of Science degree in Management Information Systems, April 2010
Ghana, Tema Oil Refinery (TOR), petroleum products, transportation