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28th International Conference on Flexible Automation and Intelligent Manufacturing
28th International ConferenceJune
(FAIM2018), on Flexible Automation
11-14, 2018, and OH,
Columbus, Intelligent
USA Manufacturing
(FAIM2018), June 11-14, 2018, Columbus, OH, USA
Planning and optimising petroleum supply chain
Planning
Manufacturing andSociety
Engineering optimising petroleum
International supply
Conference 2017, MESICchain
2017, 28-30 June
2017, Vigo (Pontevedra), Spain
Sameh M Saad, Elganidi H Elsaghier and David Ezaga
Sameh M Saad, Elganidi H Elsaghier and David Ezaga
Costing models for capacity optimization in Industry 4.0: Trade-off
Department of Engineering and Mathematics, Sheffield Hallam University, Sheffield S1 1WB, UK

Department of Engineering and Mathematics, Sheffield Hallam University, Sheffield S1 1WB, UK

Abstract
between used capacity and operational efficiency
Abstract
The purpose of this paper is A. Santana , P. Afonso , A. framework
Zaninb, for R. planning
Wernke
a a,* b
to develop and implement an integrated and optimising petroleum supply
chainpurpose
The (SC). The framework
of this paper is toconsists
developofand twoimplement
stages; first-stage is toframework
an integrated address mathematically
for planning andtheoptimising
strategic planning
petroleumand the
supply
optimisation
chain (SC). The of the extracted consists
framework
a
oil whichofis University
needed
two ofwithin
stages;Minho, 4800-058
the
first-stage Guimarães,
petroleum
is to supplyPortugal
address chain. While the
mathematically thesecond stage
strategic focusesand
planning on the
operational planning
optimisation of the refinery
of the extracted oil whicharea
b
Unochapecó,
using awithin
is needed 89809-000
combined Chapecó,
discrete
the petroleum SC,continues
and Brazil
supply simulation
chain. While modelling
the second stagetechniques.
focuses on The
the
simulation model
operational planningconsidered the following
of the refinery area usingfactors: Input Rate,
a combined Oil Quality,
discrete Distillation
and continues Capacity
simulation and Number
modelling of Failed
techniques. The
Separators which
simulation modelare analysed against
considered the performance
the following measures:
factors: Input Rate,Total
Oil Products
Quality, and Equipment
Distillation Utilisation.
Capacity and The resultsofobtained
Number Failed
from the experiment
Separators which areare analysed
analysed statistically
against using SPSS
the performance Program.Total Products and Equipment Utilisation. The results obtained
measures:
Abstract
from the experiment are analysed statistically using SPSS Program.
© 2018 The Authors. Published by Elsevier B.V.
©© 2018
2018
Under
This The
the
The
is an Authors.
accessPublished
concept
Authors.
open Published
article by
by Elsevier
of "Industry
under the4.0",
Elsevier B.V.
productionlicense
B.V.
CC BY-NC-ND processes will be pushed to be increasingly interconnected,
(https://creativecommons.org/licenses/by-nc-nd/4.0/)
This is an open
information access
based article
onarticle under
a realunder
time the CC BY-NC-ND
basis licensemuch
and, necessarily, (http://creativecommons.org/licenses/by-nc-nd/3.0/)
This is an open
Peer-review access
under responsibility of the CC BY-NC-ND
scientific license
committee of the 28thmore efficient.
Flexible In this
Automation context,
and capacity
(https://creativecommons.org/licenses/by-nc-nd/4.0/)
Intelligent optimization
Manufacturing
Peer-review under responsibility of the scientific committee of the 28th Flexible Automation and Intelligent Manufacturing
goes beyond
(FAIM2018)
Peer-review the
under traditional
Conference. aim
responsibility
(FAIM2018) Conference. ofof
thecapacity
scientific maximization,
committee of contributing
the 28th also
Flexible for organization’s
Automation and profitability
Intelligent and value.
Manufacturing
Indeed,
(FAIM2018) leanConference.
management and continuous improvement approaches suggest capacity optimization instead of
Keywords: Petroleum
maximization. Thesupply
study chain, logistics, simulation,
of capacity mathematics,
optimization optimisation
and costing models is an important research topic that deserves
Keywords: Petroleum
contributions fromsupply
both chain, logistics, simulation,
the practical mathematics,
and theoretical optimisation
perspectives. This paper presents and discusses a mathematical
model for capacity management based on different costing models (ABC and TDABC). A generic model has been
1. Introduction
developed and it was used to analyze idle capacity and to design strategies towards the maximization of organization’s
1. Introduction
value. The trade-off capacity maximization vs operational efficiency is highlighted and it is shown that capacity
The supply and demand for crude oil and petroleum products are the key factor in determining the status of
optimization might hide operational inefficiency.
Theeconomy.
world supply and demand
These days, for crude oil and
the petroleum petroleum
industry products
is facing are the task
a challenging key to
factor in determining
remain competitive intheglobalized
status of
© 2017 The Authors. Published by Elsevier B.V.
world
market economy.
due to These
the days,
fluctuating the petroleum
demand for industry
petroleum is facing
products a challenging
as well as task
the to remain
fluctuating competitive
prices of in
crude
Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference
globalized
oil. These
market due topetroleum
lead to force
2017. the fluctuating
companiesdemand for petroleum
to embrace products asthat
every opportunity well as the fluctuating
increases their profit prices
margin.of crude oil. These
leadPetroleum
to force petroleum companies
is a vital source to embrace
of energy every
that has, opportunity
since 1990, metthat increases
over 30% oftheir profit margin.
the world’s energy demand (the five
Petroleum
other main is a
sources vital
of source
energy of
areenergy that
natural has,
gas, since
nuclear 1990, met
energy, over 30% of the
hydroelectricity,
Keywords: Cost Models; ABC; TDABC; Capacity Management; Idle Capacity; Operational Efficiency world’s
renewablesenergy
anddemand
coal [1].(theIt five
has
other main sources
contributed of energy
to the world’s are natural
economic, gas, nuclear
industrial energy, hydroelectricity,
and technological development with renewables and coal
applications that [1].
spanItfromhas
contributed to the and
powering vehicles world’s economic,
electricity industrial
generation and technological
to construction developmentofwith
and the manufacture applications
plastics and otherthat span from
synthetics. All
powering vehicles and electricity generation to construction and the manufacture of plastics and other synthetics. All
1. Introduction

2351-9789
The cost© 2018 Thecapacity
of idle Authors. Published by Elsevier information
is a fundamental B.V. for companies and their management of extreme importance
This is an open
2351-9789 access
© 2018 Thearticle under
Authors. the CC BY-NC-ND
Published license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
by Elsevier B.V.
in modern
Peer-review
production
under
systems.
responsibility
In general,
of the scientific
it is defined
committee of the
as unused capacity or production potential and can be measured
28th Flexible Automation and Intelligent Manufacturing (FAIM2018)
This is an open access article under CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
in
Conference. under responsibility of the scientific committee of the 28th Flexible Automationetc.
several
Peer-review ways: tons of production, available hours of manufacturing, and The management
Intelligent of (FAIM2018)
Manufacturing the idle capacity
* Paulo Afonso.
Conference. Tel.: +351 253 510 761; fax: +351 253 604 741
E-mail address: psafonso@dps.uminho.pt

2351-9789
2351-9789©©2017
2018The
TheAuthors.
Authors. Published by Elsevier
Published B.V. B.V.
by Elsevier
Peer-review underaccess
This is an open responsibility
article of the scientific
under committee oflicense
the CC BY-NC-ND the Manufacturing Engineering Society International Conference 2017.
(http://creativecommons.org/licenses/by-nc-nd/3.0/)
Peer-review under responsibility of the scientific committee of the 28th Flexible Automation and Intelligent Manufacturing
(FAIM2018) Conference.
10.1016/j.promfg.2018.10.131
804 Sameh M Saad et al. / Procedia Manufacturing 17 (2018) 803–810
Saad, et al./ Procedia Manufacturing 00 (2018) 000–000

this depends on a supply chain (SC) made up of complex and expensive processes. The huge level of investment
required to plan and operate the chain has driven organisations to look for safe, cheap and efficient ways of meeting
customers' needs while ensuring things are done right the first time. This is important as errors in this context may
not only necessitate extra spending on correction (depending on the stage of the project), but may also result in
environmental damage and even fatal accidents.
The petroleum industry is a material flow intensive. Since supply chain cost amounts to 40% of total refining and
distribution cost, effective management and optimisation of the chain are critical. Accordingly, there is a flourishing
body of research in this area such as [2-5], and a number of quantitative models and mathematical programming
techniques have been developed over the decades. Their use has significantly increased organisations’ ability to plan
and control industry activities and increase profits. This has become even more crucial during the recent economic
slowdown, which has forced many companies to abandon plans to build new refineries or expand capacity in
existing plants and obliged them instead to optimise their existing facilities. Detailed planning of the supply chain is
vital if it is to be both robust enough to handle such uncertainties and flexible enough to adjust to internal and
external changes in the petroleum industry.
This paper focuses on the planning and optimisation of petroleum industry logistics and the supply chain, from
the recovery of the raw materials to production and distribution, using integrated mathematical and simulation
modelling techniques. It consider a range of parameters including crude oil production, transportation plans,
production levels, operating conditions, products distribution plans, the prices of raw materials and products under
significant sources of uncertainty (reflecting current market conditions).
Figure 1 displays the proposed framework for planning and optimising petroleum supply chain. The framework
considers the full range of petroleum supply chain entities and activities, from crude oil production to market
demand, and encompasses crude oil transportation, refinery operation, final products storage, and final product
shipping to distribution centres. The objective function of the proposed mathematical model is to optimise the
petroleum supply chain by minimising total production and logistics costs, as well as lost demand and backlog
penalties, and maximising sales revenues.

Planning & Optimising

Petroleum SC and Logistics

Data Collection

Problem Formulation

Simulation Model Mathematical Model

Two-Stage Linear
Implementation using
programming with
ARENA Software and
recourse
examine what if scenarioo

Implementation using
GAMS Software

Optimal Crude Oil Quantity Optimal Solutions (Cost,

Quantities of oils)

Analyse the obtained

results

Yes More run

needed

No

Report on the best operational

procedure to adopt

Fig. 1. The proposed framework for planning and optimising petroleum SC

 Sameh M Saad et al. / Procedia Manufacturing 17 (2018) 803–810 805
Saad, et al / Procedia Manufacturing 00 (2018) 000–000 3

As can be seen from Figure 1 the proposed mathematical model arrives to an optimal quantity for crude oil
production, which was then fed into the simulation model. The simulation model focuses on the key areas of crude
oil production and distillation unit processes. The results were analysed and their validity checked and the model run
repeatedly to refine its performance.

2. Framework of the proposed petroleum supply chain

The petroleum supply chain proposed in this paper is illustrated in Figure 2. It includes majority of the activities
related to raw materials supply to final product passing through a complex logistics network including oil
production, refinery area, transportation, storage of the refinery products which can be considered as distribution
centres, and several conversion processes that take place in refinery plant.
The network of petroleum supply chain proposed are designed to start from crude oil production which is
considered the first variable of supply chain model. The amount of crude oil transported from production sites to the
refinery is the second variable of the model of petroleum supply chain proposed.
The oil refinery activity is considered one of the most complex activities in the petroleum industry which carry
different processes to transform crude oil into valuable refined products of higher aggregate value, in addition
maximising the profit.

Storage tanks of
refinery products Final Production
Well Well Transportation MD1
2 2

Well Well MD2

2 2

MD3

Well Well Crude Oil MD4

1 2 Transportation
Well Well
3 4 MD5
Refinery
Crude oil production (LPG, Gasoline, kerosene,
diesel, and Heavy fuel oil )

Fig. 2. Petroleum supply chain network proposed

3. Deterministic Mathematical Model

The deterministic model proposed addresses the portfolio of the optimisation problem in the integration oil
supply chain in order to satisfy market demand with the lowest cost. The planning of petroleum supply chain is
proposed at the strategic level, and the planning horizon (T) for one year is assumed. The planning horizon is
usually divided into time periods at which items of the plan are scheduled.

3.1 The objective function

The objective function of the proposed mathematical model is to optimise the petroleum resources by
minimising the total costs of raw materials production, refinery and petrochemical production, raw material and
final products transport, storage of final products, and penalty of the amount of shortage and backlog products for
demand source as well as maximising the sale revenues. The objective function for the deterministic model is
defined in plain English first then presented mathematically in equation (1) as follows:

𝑍𝑍 = min{[𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑜𝑜𝑜𝑜𝑜𝑜] + [ 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑜𝑜𝑜𝑜 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝] + [𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑜𝑜𝑜𝑜𝑜𝑜]
+ [𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐] + [𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑜𝑜𝑜𝑜 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝]
+ [𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑜𝑜𝑜𝑜 𝑠𝑠ℎ𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑝𝑝𝑝𝑝𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜][𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑜𝑜𝑜𝑜 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝] − [ 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟]}
806 Sameh M Saad et al. / Procedia Manufacturing 17 (2018) 803–810
Saad, et al./ Procedia Manufacturing 00 (2018) 000–000

𝑍𝑍 = 𝑚𝑚𝑚𝑚𝑚𝑚 {[∑ ∑ 𝐶𝐶𝐶𝐶𝑖𝑖 . 𝑄𝑄𝑖𝑖,𝑡𝑡 ] + [∑ ∑ 𝐶𝐶𝑗𝑗 . 𝑉𝑉𝑗𝑗,𝑡𝑡 ] + [∑ ∑ 𝑇𝑇𝑇𝑇𝑖𝑖 . 𝑇𝑇𝑇𝑇𝑖𝑖,𝑡𝑡 ] + [∑ ∑ 𝐶𝐶𝐶𝐶𝑗𝑗 . 𝑆𝑆𝑆𝑆𝑗𝑗,𝑡𝑡 ] + [∑ ∑ ∑ 𝐶𝐶𝐶𝐶𝑗𝑗 . 𝐹𝐹𝑗𝑗,𝑚𝑚𝑚𝑚,𝑡𝑡 ] + [∑ ∑ ∑ 𝛽𝛽𝑗𝑗,𝑚𝑚𝑚𝑚 . 𝐷𝐷𝐷𝐷𝑗𝑗,𝑚𝑚𝑚𝑚,𝑡𝑡 ]
𝑖𝑖𝑖𝑖𝑖𝑖 𝑡𝑡𝑡𝑡𝑡𝑡 𝑗𝑗∈𝐽𝐽 𝑡𝑡∈𝑇𝑇 𝑖𝑖𝑖𝑖𝑖𝑖 𝑡𝑡𝑡𝑡𝑡𝑡 𝑗𝑗∈𝐽𝐽 𝑡𝑡∈𝑇𝑇 𝑗𝑗𝑗𝑗𝑗𝑗 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑡𝑡𝑡𝑡𝑡𝑡 𝑗𝑗𝑗𝑗𝑗𝑗 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑡𝑡𝑡𝑡𝑡𝑡

+ [∑ ∑ ∑ 𝐶𝐶𝐶𝐶𝑗𝑗,𝑚𝑚𝑚𝑚 . 𝑉𝑉𝑉𝑉𝑗𝑗,𝑚𝑚𝑚𝑚,𝑡𝑡 ] − [∑ ∑ ∑ 𝑃𝑃𝑃𝑃𝑗𝑗,𝑚𝑚𝑚𝑚 𝐹𝐹𝑗𝑗,𝑚𝑚𝑚𝑚,𝑡𝑡 ]} (1)

𝑗𝑗𝑗𝑗𝑗𝑗 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑡𝑡𝑡𝑡𝑡𝑡 𝑗𝑗𝑗𝑗𝑗𝑗 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑡𝑡𝑡𝑡𝑡𝑡

where:
Sets
𝐼𝐼 = Set of raw material (𝑖𝑖 )
𝐽𝐽 = Set of products (𝑗𝑗 )
𝑀𝑀𝑀𝑀 = Set of market demand (𝑚𝑚𝑚𝑚)
𝑇𝑇 = set of time period in the planning horizon for one year (𝑡𝑡 )
𝑆𝑆 = set of scenarios (𝑠𝑠)
Variables
𝑄𝑄𝑖𝑖,𝑡𝑡 = Volume of crude oil produced during period time(𝑡𝑡).

𝑉𝑉𝑖𝑖,𝑡𝑡 = Production volume of product (𝑗𝑗) at the end of period time (𝑡𝑡).
𝑠𝑠
𝑇𝑇𝑇𝑇𝑗𝑗,𝑡𝑡 = Volume of crude oil (𝑖𝑖) transported at the end of time period (𝑡𝑡) under scenario (𝑠𝑠).
𝑠𝑠
𝑆𝑆𝑆𝑆𝑗𝑗,𝑡𝑡 = Volume of product (𝑗𝑗) kept in stock at the end of period time (𝑡𝑡) under scenario (𝑠𝑠).
𝑠𝑠
𝐹𝐹𝑗𝑗,𝑚𝑚𝑚𝑚,𝑡𝑡 = Volume of product (𝑗𝑗) shipped to source demand (𝑚𝑚𝑚𝑚) at the end of period time (𝑡𝑡) under scenario (𝑠𝑠).
𝑆𝑆
𝑉𝑉𝑉𝑉𝑗𝑗,𝑑𝑑,𝑡𝑡 = Backlog quantities of product (𝑗𝑗) for demand source (𝑚𝑚𝑚𝑚) at the end of period time (𝑡𝑡) under scenario (𝑠𝑠).
𝑠𝑠
𝐷𝐷𝐷𝐷𝑗𝑗,𝑚𝑚𝑚𝑚,𝑡𝑡 = Shortage amount of product (𝑗𝑗) for demand source (𝑚𝑚𝑚𝑚) at the end of period time (𝑡𝑡) under scenario (𝑠𝑠).
Parameters:
𝐶𝐶𝑗𝑗 = unit production cost for product (𝑗𝑗) .
𝑃𝑃𝑃𝑃𝑗𝑗 = price of product(𝑗𝑗).
𝐶𝐶𝐶𝐶𝑗𝑗 = Backlog penalty of product (𝑗𝑗).
𝐶𝐶𝐶𝐶𝑖𝑖 = unit production cost of crude oil (𝑖𝑖) .
𝑆𝑆𝑆𝑆𝑖𝑖 = unit storage cost of product (𝑗𝑗).
𝑇𝑇𝑇𝑇𝑖𝑖 = transportation cost of crude oil(𝑖𝑖).
𝐶𝐶𝐶𝐶𝑗𝑗 = transportation cost of product (𝑗𝑗).
𝛽𝛽𝑗𝑗,𝑑𝑑 = penalty of shortage below demand of product (𝑗𝑗).

3.2. Constraints

There are five main constraints considered for this mathematical model including material balance, demand
balance, storage constraints, transportation constraints and production yield. Due to space limitation, the
mathematical presentation and details of these constraints will be presented in the conference.

4. Simulation model

The main objectives of simulation modelling are to design and develop an operational simulation model for
planning and optimising petroleum logistics and supply chain. The proposed model focuses on two main production
areas namely: crude oil separation and distillation unit. The crude oil input rate, oil quality, distillation processing
time and a number of failed separators are all experimental factors considered in the simulation model. The output
of total products and equipment utilisation were used to measure the designed model performance.

4.1. System Description

The process flowchart shown in Figure 3 illustrates the processing stages of the proposed simulation model. The
crude oil flows from its source through two production lines, each line consists of three separation machines for
separating the oil from water and gas. The pure oil extracted from third stage separator passes through two delivery
tanks which are connected to a storage tank that feeds the distillation unit to produce the final products. All of these
 Sameh M Saad et al. / Procedia Manufacturing 17 (2018) 803–810 807
Saad, et al / Procedia Manufacturing 00 (2018) 000–000 5

operations change with the time and therefore, it is considered as a continuous system, although some discrete event
occurs.
The experimental factors assumed in this model are crude oil flow rate which determines the quantity of crude
oil flowing into the system. The oil, gas, and water ratio is used as a measure for crude oil quality. The distillation
capacity, number of failed separators that affect the amount of crude oil to be processed and the amounts of final
products were also taken into account. The experimental factors and the performance measures are listed in Table 1.
745,614.026 (bbl./day) = 65% Oil,
15%Gas, 20% Water

Crude Oil Flow Crude Oil Flow

Rate 258.894 Rate 258.894
bbl/min bbl/min

First stage separator First stage separator

at 700 psi at 700 psi
Gas out Crude oil out
Water out Gas out Crude oil out Water out
31,578.947 298,245.61
47,368.42 31,578.947 298,245.61 47,368.42

Second stage separator Second stage separator

at 200 psi at 200 psi
Gas out Crude oil out Water out Gas out Crude oil out Water out
15,789.474 268,421.05 15,789.474 15,789.474 268,421.05 15,789.474

Third stage separator Third stage separator

at 20 psi at 20 psi
Gas out Gas out Crude oil out
5,368.421 Crude oil out Water out Water out
8,052.63 5,368.421 255,000 8,052.63
255,000

Delivery tank of Delivery tank of

crude oil with crude oil with
capacity 60,000 capacity 60,000
bbl bbl

Oil Distillation Unit with capacity LPG 5.8%

Storage tank of
Gasoline
crude oil with 51.4%
capacity 80,000
bbl
30,000 bbl

Kerosene
15.3%

Diesel 12.3%

Heavy Fuel Oil

15.2%

Fig. 3. Process Flow Chart of the proposed model

Table 1. The input, output components and experimental factors

Components Details
Crude oil flow rate
Independent Oil, Gas, and Water Ratio in the content
(Experimental Factors) Distillation Processing Time
Number of failed separators
Dependent Number of barrels of Final Products
(Performance Measures) Equipment Utilization

4.2. Model building

Arena Simulation Software [6] was used to develop the proposed simulation model due its modelling capabilities
of both discrete and continuous type of processes. The model representing activities from the crude oil source which
flow through separation processes to distillation unit processes passing through delivery tanks and storage tanks
were built using a hundred and thirty modules in Arena simulation software. In building the model, the system was
divided into three phases (Production Line 1, Production Line 2 and Distillation) and each phase was further divided
808 Sameh M Saad et al. / Procedia Manufacturing 17 (2018) 803–810
Saad, et al./ Procedia Manufacturing 00 (2018) 000–000

into sections as show in Figure 3.

This approach eased verification, validation and also helped in reducing the time for building the model as
similar sectioned were copied rather than been built from the scratch. Since Phase 1 (Production Line 1) and Phase 2
(Production Line 2) are identical, explaining how of the phase was built was deemed sufficient. Figure 4 illustrates a
brief process description of the 1st stage of separation using a flow chart. The three separation stages were
controlled by Equations containing variables used in the model.

1st stage of separation

Process Flowchart Arena Module Used

Section 1

Crude Oil Source

SP1 Input
Section 1

Regulator

Oil Flow into SP1

Section 1

Tank

No

if = 100%
Section 1

if < 80% Is SP1 Tank Stop flow to SP1

Yes
full? Tank

Yes
if >= 80%
Section 1

SP1 output
Regulator
Section 1

Oil Flow out of

SP1 Tank
Section 1

SP1 Separator
Section 1

Gas Exit Water Exit

Oil
System System
Transit to section 2

Oil Flow to 2nd

Stage of
Separation

Fig. 4. The 1st Stage of Separation Illustrated by a Process Flow Chart and Respective Arena Modules Used

5 Results and discussion

5.1 Deterministic base case (Case 0)

The deterministic base case results represent the considered to be optimal supply chain plan for which all
parameters are considered at certain condition. The main points of Case 0 results are summarised in the following:
o The quantity of crude oil production and quantity of crude oil transported have the highest contribution in
the overall quantities of the petroleum supply chain, which recorded 26.90% alike. Followed by volume of
refinery productions and volume of refinery products shipped with 25.58% and 16.96% respectively. While
the lowest contribution quantities represented by volume of backlog, volume of stored products and shortage
product (below demand) with 1.79%, 1.72% and 0.09% respectively. The contribution of each parameters of
supply chain is illustrated in Figure 5.
 SamehetMalSaad
Saad, et al. /Manufacturing
/ Procedia Procedia Manufacturing 17 (2018) 803–810
00 (2018) 000–000 8097

VB, 1.79% SV, 1.72%

DS, 0.09%
F,
16.96%
Q, 26.90%
V, 25.58%
TV,
26.90%

Fig. 5 Optimal quantities of supply chain parameters (Case 0)

o The optimal quantity of crude oil production is accomplished for all time periods during the planning
horizon that are shown in Table 2. The quantity gained from running the deterministic model Case 0 is
2.57E+07 tonnes of crude oil during time period of planning horizon which equivalent to 510,000
barrels/day. This quantity used in the simulated model for calculating other key performance measures of
petroleum supply chain.

Table 2 Optimal quantities of supply chain parameters during planning horizon (tonnes)

Items Optimal Quantities(tonnes)

Quantity of crude oil (Q) 2.57E+07

Quantity of transported crude oil (TV) 2.57E+07

Quantity of products (V) 2.44E+07

Quantity of shipped products (F) 1.62E+07

Quantity of shortage demand (DS) 90000

Quantity of backlog (VB) 1.71E+06

Quantity of product kept in stock (SV) 1.65E+06

5.2. Simulation model results

The experimental design of the model had 945 runs (3 X 5 X 9 X 7 levels). Three input rates of oil at level R1,
R2 and R3, five quality of crude oil at levels Q1, Q2, Q3, Q4 and Q5, nine levels of distillation capacity and 7 levels
of separators failure. To analyse the outputs, the distillates were summed up as one value called total product and
Equipment Utilisation was averaged. This helped reduce the complexity for analysing the outputs of the experiment
using SPSS. The results obtained from MANOVA analysis will be presented in the conference, which is a set of
plots showing the effect of the four input factors on the performance-measure (total products output). It was clear
that the number of barrel of total product increases whenever input rate and quality of crude oil increases.
Obviously, distillation processing time had big impact on the output. The number of failed separator had effect on
the performance measure (total products) by dropping sharply from F0 to F2 and then stayed stable at low level of
the output from F3 to F6. It is clear that, the distillation processing time had a significant impact on the performance
measure equipment utilisation as a drop in the percentage of equipment utilisation from 100% at processing time of
69.9 minutes to about 25% at processing time of 0.73 minute was experienced. Otherwise, the output increases with
810 Sameh M Saad et al. / Procedia Manufacturing 17 (2018) 803–810
Saad, et al./ Procedia Manufacturing 00 (2018) 000–000

an increase in both input rate of crude oil and quality of crude oil. The effect of number of failed separators showed
a sharp fall in the percentage of equipment utilisation from F0 at 69% to F2 at 57% and steady from F3 to F6 at
about 50%.

6. Conclusions

The integrated mathematical and simulation framework were developed and implemented for planning and
optimising petroleum supply chain. The first part of this framework, was the mathematical model of deterministic
linear programming to show the relationship between various supply chain functions and a range of KPIs (cost of
crude oil, transportation of crude oil, refinery production, production storage, production shipped, backlog and
shortage demand. The optimal quantity of crude oil presented into deterministic model which was (5.10E+05 bbl./d)
used in the simulation model for calculating the performance measurement of the petroleum supply chain. The
second part of the optimisation framework was the operational simulation model. Unlike the linear programming
approach favoured by other researchers, the simulation approach used here allowed the combination of different
types of petroleum supply chain system characteristics (continuous, discrete, dynamic, static, deterministic,
stochastic and non-terminating) into one model, which should be considered as a major contribution, enabling it to
mimic the behaviour of a real system. Furthermore, the animation feature that comes with the Arena simulation
software made the modelling process more interactive and easier to use and monitor. The model allows users to
check the estimated input factors and their effect on output, showing how productivity and profitability can be
improved and helping decision makers in production planning.
The act of measuring performance provides information that aids intelligent decision making and proper
management, so the identification of other key performance indicators (e.g. profitability, revenue, on-time
deliveries, costumer response time and manufacturing lead time) should be considered in future research.

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