A robust two-echelon periodic multi-commodity RFID-based location routing problem to design petroleum logistics networks: a case study

Abstract

This study proposes a robust two-echelon periodic multi-commodity Location Routing Problem (LRP) by the use of RFID which is one of the most useful utilities in the field of Internet of Things (IoT). Moreover, uncertain demands are considered as the main part to design multi-level petroleum logistics networks. The different levels of this chain contain plants, warehouse facilities, and customers, respectively. The locational and routing decisions are made on two echelons. To do so, a novel mixed-integer linear programming (MILP) model is presented to determine the best locations for the plants and warehouses and also to find the optimal routes between plant level and warehouse facilities level, for the vehicles and between warehouse facilities level and customers’ level in order to satisfy all the uncertain demands. To validate the proposed model, the CPLEX solver/GAMS software is employed to solve several problem instances. These problems are analyzed with different uncertain conditions based on the applied robust optimization technique. Finally, a case study is evaluated in Farasakou Assaluyeh Company to demonstrate the applicability of our methodology and find the optimal policy.