Sizing fuel's tankage in secondary bases: investment decisions to overcome inefficiencies of the railroad system

Authors

  • Sérgio de Souza Araujo
  • Valéria Campos Gomes de Souza Miccuci
  • Nélio Domingues Pizzolato

Keywords:

Railroad Transport, Logistics, Inventory, Tankage, Fuel

Abstract

This article examines the distribution chain of liquid petroleum fuels in Brazil, with focus on the economic evaluation of the investment costs required for the expansion or construction of additional tanks with corresponding operational facilities, and additional safety stocks to hold the product in the Secondary Basis. The relevance of the study is due to the Liquid Fuel Distribution Model used in Brazil, in which the railroad system plays a significant role, but presents inefficiencies in the transfer operations. The present study leads to the conclusion that, under an economic point of view, the alternative of investing in larger tankage capacity and to operate with more safety stocks is convenient to overcome the railroad failures and to reduce the eventual use of the road transportation system, especially during the harvesting period. The study has also included a sensitivity analysis of the proposals given some changes in the relevant problem data.

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How to Cite

Araujo, S. de S., Miccuci, V. C. G. de S., & Pizzolato, N. D. (2013). Sizing fuel’s tankage in secondary bases: investment decisions to overcome inefficiencies of the railroad system. Latin American Journal of Business Management, 4(1). Retrieved from https://lajbm.com.br/index.php/journal/article/view/128

Issue

Vol. 4 No. 1 (2013)

Section

Articles

License

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