Optimal Sizing and Contracting of Vehicle Fleets Under Uncertainty for Upstream Operations in the Oil and Gas Industry

PRESSER, DEMIAN J.; CAFARO, VANINA G.; DIEGO C. CAFARO

Singapur

Conferencia; 2021 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM); 2022

IEEE

The supply of materials, equipment and services is an important logistic process for upstream operations in the oil and gas industry. Sizing fleets to timely supply resources is critical to keep rigs running and wells producing. This work presents a novel mixed integer linear programming formulation to address the fleet sizing and contracting problem under uncertainty. A two-stage stochastic optimization approach is proposed, providing a rigorous treatment of the uncertainty associated with the demand of vehicles and availability from suppliers. The mathematical formulation aims to determine the optimal fleet size and contract agreements such that the service level accomplished over the time horizon meets the minimum expected total cost, including contract fees and penalties for the unsatisfied demand. A real-world study case is solved and discussed to draw interesting conclusions.