Crude Oil Procurement Management Study In Petrochemical Companies

Petrochemical supply chain mainly includes three parts: crude oil procurement andsupply, crude processing as well as products distribution and sale. Since crude oils arethe most important production feed stocks in refining and petrochemical companies,crudes procurement management becomes the most critical part in supply-chainmanagement of refineries. In general, crude procurement management is composed bythree parts: the first one is crudes demand forecast, i.e. what kinds of crudes as well ashow many barrels of each crude need to be procured; the second is supplier selection, i.e.who provides certain kind of crude needed as well as the quantity of barrels are to beprovided; and the third is transportation decision which involves selecting transportationroutes as well as transportation schedule.This paper studies the ways to intensify crudes procurement management bymanagement tools from aspects of theory analysis as well as case study. The theoryanalysis starts from the study of procurement management and the paper explores theutilization of management science in crudes procurement. By modeling the threeessential procurement issues, namely crudes demand forecast, supplier selection as wellas transportation decision, this paper illustrates the utilization of management tools,especially linear programming and decision tree, in procurement management. Thepaper takes procurement management in MM petrochemical company as its studyobject. In this part it firstly introduces the company’s background and its current crudeprocurement management system, and then it puts forward several reasonablehypotheses, tries to solve the procurement programming model under these hypothesesand get the programming solution results.