Spatial optimisation of the fuel purchase decision for road transport undertakings

Abstract

Road transport undertakings in India have been spending approximately between 15-20 % of their total expenses on fuel. Given the fact that they visit different towns and sometimes even different states, the fuel which is available at different prices could be purchased in a way that the fuel cost is optimized. A network model, algorithms and linear programming formulations are presented for this problem in order to decide how much fuel should be purchased at the different towns that a bus visits as part of its vehicle duty schedule. The model presented minimizes the fuel costs for a given amount of fuel to be consumed, taking advantage of spatial price differences.