Liquefied petroleum gas distribution plan to LPG depots in the north and northeast by trains and trucks for the Petroleum Authority of Thailand

Abstract

Product distribution system is a crucial part of running petroleum business. A well-planned distribution system significantly reduces an operating cost which is the most important issue for survival amongst high competition like nowadays. As a result of this thesis, the LPG distribution plan by rails and trucks from supply sources, Banrongpoh Depot and Lankrabue Gas Separation Plant, to LPG Depots in the North and Northeast, Lampang, Nakornsawan, and Konkhaen Petroleum Terminal, is done for the Petroleum Authority of Thailand for a five-year-period (year 2001-2005). Linear programming theory is applied as a primary study to figure out the primary quantity of transporters required in order to sufficiently serves the continuously increased demand. Nevertheless, some special characteristics of the linear programming itself are not compatible with some conditions of the real world operation such as fluctuation in transportation lead time, fluctuation in demand, transporter's failure rate, etc., the simulation study is then conducted to make the primary result more practical. From the simulation technique, three rails should be added into the system in the year 2004. Furthermore, a sensitivity analysis shows that if the demand deviates within the range of -3% to +5%, this alternative will still be the optimal solution. In case the demand is lower than the expected amount greater than 3%, two rails should be invested in the year 2004, and another one rail in the year 2005. On the contrary, if the demand is larger than the forecasted amount than 5%, the optimal solution is to invest in three rails in the year 2004 and another one rail in the year 2005.