APPLICATION OF

TRANSPORTATION MODEL
IN IOCL REFINERIES

Presented by:
ARUN KUMAR (9)
Indian Oil Corporation is an Indian public-sector
petroleum company.

It is India’s largest commercial enterprise, ranking 105th on

the Fortune Global 500 listing (2009).

Indian Oil and its subsidiaries account for a 47% share in

the petroleum products market, 40% share in refining
capacity and 67% downstream sector pipelines capacity in
India.

The Indian Oil Group of Companies owns and operates 10

of India's 19 refineries.
 Operations research

OR is the discipline of applying advanced

analytical methods to help make better
decisions .
The Transportation Model
The transportation model is a special class of LPPs
that deals with transporting a commodity from
sources (e.g. factories) to destinations (e.g.
warehouses). The objective is to determine the
schedule that minimizes the total transportation cost
while satisfying supply and demand limits. We
assume that the shipping cost is proportional to the
number of units shipped on a given route.
We assume that there are m sources 1,2, …, m and n
destinations 1, 2, …, n. The cost of transporting one
unit from Source i to Destination j is cij.
We assume that the availability at source i is
ai (i=1, 2, …, m) and the demand at the destination j is
bj (j=1, 2, …, n). We make an important assumption:
the problem is a balanced one.

That is, total availability equals total demand.

 Destination
1 2 . . n Supply
c11 c12 c1n a1
S 1
o c21 c22 c2n
2 a2
u
r
c
e
. cm1 cm2 cmn am
Demand. b1 b2 bn
m
IOCL has three refineries at Gujarat, Mathura &
Panipat with daily capacities of 6,5, and 8 million
gallons, respectively, Supply three distribution areas
Surat, Agra & Delhi with daily demands of 4,8, and
7 million gallons, respectively .Gasoline is
distributed to the three distribution areas through a
network of pipelines. The transportation cost is 10
cents per 1000 gallons per pipeline mile. The table
below gives the mileage between the refineries and
the distribution areas.
 Distribution Area
1 2 3
1 120 180 -
Refinery 2 300 100 80
3 200 250 120

Construct the associated transportation model.

Refineries : Distribution Area :

1Gujarat 1Surat
2Mathura 2Agra
3 Panipat 3 Delhi
 Destination
Distribution Area
S 1 2 3 Supply
o 12 18 11
1 6
u 30 10 8
r Refinery 2 5
c 20 25 12
8
3
e
Demand 4 8 7

The total cost will be 2700