"A Game-Theoretic Approach for Transportation of Oil Products in a Duopolistic Supply Chain"

Document Type : Research Article

Authors

1 Isfahan University of Technology

2 Department of Transportation, Isfahan University of Technology, Iran

Abstract

Oil and its derivatives can be distributed through various transportation modes. In spite of the fact that pipeline is considered as the most prevalent mode of transporting oil products, policy makers confront with several parameters in making a straightforward decision about how to transport such products. Other modes of transportation may be used in many regions due to higher flexibility and affordability. Therefore, a competition between pipeline and other modes of transportation exists due to economic concerns. Therefore, a study clarifying this competition is essential. In this study, a game theoretic framework in a duopolistic supply chain is developed for modeling the competition of two oil products transportation systems, including road and intermodal pipeline-road. These are considered as the most prevalent modes of transporting oil and refinery products in many countries. Transportation prices of the two rival systems, in addition to the availability of tanker truck fleet are the main variables considered in this study. Flexible and inflexible schemes are introduced and based on them, the effects of four different policies on degree of competence in the oil transportation market are analyzed. Moreover, some useful managerial insights are provided including: transfer from flexible scheme to inflexible scheme, fuel price increase, employment of modern trucks with low fuel consumption, and decrease of peripheral costs in intermodal system.

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