A Combined Liquefied Natural Gas Routing and Deteriorating Inventory Management Problem

Abstract

Liquefied Natural Gas (LNG) is becoming a more crucial source of energy due to its increased price competitiveness and environmental friendliness. We consider an inventory routing problem for inland distribution of LNG from storage facilities to filling stations. Here, an actor is responsible for the inventory management at the storage facilities and filling stations, as well as the routing and scheduling of a heterogeneous fleet of vehicles. A characteristic of the problem is that a constant rate of LNG evaporates each day at the storage facilities and filling stations. This is in contrast to maritime LNG inventory routing problems where the evaporation is considered at the ships only. The combined LNG routing and deteriorating inventory management problem is modelled with both an arc-flow and a path-flow formulation. Both models are tested and compared on instances motivated from a real-world problem.