A robust optimization approach to risk-averse routing of marine crude oil tankers. (January 2023)

• Record Type: Journal Article
• Authors: Siddiqui, Atiq W.; Sarhadi, Hassan; Verma, Manish
• Is Part Of: Computers & industrial engineering. Volume 175(2023)
• Publication Date: 2023-01
• Subjects: Risk assessment -- Conditional value-at-risk -- Marine transportation -- Crude oil shipments -- Robust optimization; Engineering -- Data processing -- Periodicals; Industrial engineering -- Periodicals; 620.00285
• DOI: 10.1016/j.cie.2022.108878
• Languages: English
• ISSNs: 0360-8352

Abstract

Highlights: We use a conditional-value-at risk measure to assess marine crude oil spill risk. We propose deterministic and robust bi-objective optimization programs. Problem instances based on the infrastructure of a major global oil supplier is studied. Risk-averse methodology selects smaller vessels and longer-safer routes. Value of incorporating robustness is demonstrated. Abstract: Marine accidents involving crude oil tankers are rare though such incidents have led to catastrophic socioeconomic and environmental consequences. This low probability – high consequence nature of marine oil spills renders the existing expected consequence technique ineffective and calls for the development of a risk-averse approach. We propose a conditional value-at-risk (CVaR) based methodology for selecting the appropriate size of crude oil tankers and then routing them over the intercontinental network such that the weighted sum of transport cost and CVaR based transport risk is minimized. In addition, we also develop a robust formulation of the mixed-integer routing problem, which not only facilitates tiding over imprecision in the risk data but also prepares risk-averse shipment plan. The proposed methodology was used to analyze the realistic marine network of a major oil supplier and to demonstrate its benefits, and to underscore the value of incorporating robustness.