Management Science, 33, p. 335-346. (Nominated for 1987 International Management Science Achievement Award.)The article of record as published may be found at http://links.jstor.org/sici?sici=0025-1909%28198703%2933%3A3%3C335%3ASOTOCO%3E2.0.CO%3B2-FNominated for 1987 International Management Science Achievement Award.A crude oil tankerscheduling problem faced by a major oil company is presented and solved
using an elastic set partitioning model. The model takes into account all fleet cost components,
including the opportunity cost of ship time, port and canal charges, and demurrage and bunker
fuel. The model determines optimalspeeds for the ships and the best routing of ballast (empty)
legs, as well as which cargos to load on controlled ships and which to spot charter. All feasible
schedules are generated, the cost of each is accurately determined and the best set of schedules is
selected. For the problems encountered, optimal integer solutions to set partitioning problems
with thousands of binary variables have been achieved in less than a minute
