Single Vehicle Flexible and Selective Delivery Routing Problem in Offshore Bulk Shipping - Cutting Costs and Improving Planning by Use of Optimization

A decision support model for the Single Vehicle Flexible and Selective Delivery Routing Problem (SVFSDRP) is presented as a method to improve planning and reduce costs in offshore bulk logistics. Reducing costs in the oil and gas industry has become the main priority with decreasing oil prices in 2014-2016. As logistics account for 14% of the cost of drilling operation, it is important to reduce costs in this area. The routing analysis previously done in offshore shipping has deck cargo as its the focus area, instead of bulk cargo. Moreover, Statoil is considering introducing a specialized bulk vessel. The model presented in this paper would work well in combination with such a vessel. One of the most important challenges in offshore logistics is demand uncertainty. This model may improve logistical personnel s ability to respond to this uncertainty, as the model can quickly provide a new solution to changes in demand. The method used is a model designed through an optimization approach, the model solves the SVFSDR problem. This thesis is based on the authors work experience, research on the system and literature study on the topic. The model is developed based on earlier work stated in the literature study. Additionally, the model has novel constraints and features which are based on the authors understanding of the bulk supply logistics system. The author may be subject to misinterpreting parts of the system or factors. When reviewing the result one should keep in mind that this is only a model; the outputs are direct results of the inputs used. The model is subject to assumptions and estimates used through this thesis. The model may be used in similar problems in bulk shipping, but it is restricted to bulk logistical problems. Flexibility improves the solution by reducing cost, increasing transported volume and increasing revenue. However, it is at the cost of high flexibility, up to 30%, which may increase uncertainty as it will take more time before personnel at offshore installations know the exact volume they will receive. Additionally, it may be hard to achieve high flexibility on demands as it causes uncertainty in the supply chain. The model may also give logistical personnel the ability to better respond to uncertainty in demand, as it quickly finds new solutions. The proposed model may also be used to test different designs in a bulk supply context. With regards to further work, it is recommended to make a dynamic model that includes the sequential effects of chosen route and cargo mix