A construction and improvement heuristic for a liquefied natural gas inventory routing problem

  • Authors:

  • Magnus Stålhane;Jørgen Glomvik Rakke;Christian Rørholt Moe;Henrik Andersson;Marielle Christiansen;Kjetil Fagerholt

  • Affiliations:

  • Norwegian University of Science and Technology, Department of Industrial Economics and Technology Management Technology Trondheim, Norway;Norwegian University of Science and Technology, Department of Industrial Economics and Technology Management Technology Trondheim, Norway;Norwegian University of Science and Technology, Department of Industrial Economics and Technology Management Technology Trondheim, Norway;Norwegian University of Science and Technology, Department of Industrial Economics and Technology Management Technology Trondheim, Norway;Norwegian University of Science and Technology, Department of Industrial Economics and Technology Management Technology Trondheim, Norway;Norwegian University of Science and Technology, Department of Industrial Economics and Technology Management Technology Trondheim, Norway and Norwegian Marine Technology Research Institute (MARINT ...

  • Venue:
  • Computers and Industrial Engineering
  • Year:
  • 2012

Quantified Score

Hi-index 0.00

Visualization

Abstract

We present a large scale ship routing and inventory management problem for a producer and distributor of liquefied natural gas (LNG). The problem contains multiple products, inventory and berth capacity at the loading port and a heterogeneous fleet of ships. The goal is to create an annual delivery program to fulfill the producer's long-term contracts at minimum cost, while maximizing the revenue from selling LNG in the spot market. To solve this problem we have developed a construction and improvement heuristic (CIH). The CIH is a multi-start local search heuristic that constructs a set of solutions using a greedy insertion procedure. The solutions are then improved using either a first-descent neighborhood search, branch-and-bound on a mathematical formulation, or both. Tests on real-life instances show that the CIH provides good solutions in a short amount of time.