The disconnect between the optimization systems of upstream production and downstream demand poses a legitimate problem for China’s refined oil industry in terms of overproduction waste. Established methods only partially model the refinery system and are unable to integrate detailed production plans or meet market demands. Therefore, the research on production scheduling optimization combined with the demand of downstream pipeline network has very real applications that not only reduce the consumption of human/material resources, but also increase economic efficiency. This paper aims to optimize the production scheduling of refined oil transportation based on the demand of downstream product pipelines by analyzing the relationships between crude oil supply, refinery facility capacities and refinery tanks storage. The new model will minimize the refined production surplus therefore minimizing refinery costs and wastage. This is done by implementing models custom designed to optimize the three subsystems of the overall process: oil product blending scheduling optimization, producing and processing equipment scheduling optimization, and mixed crude oil scheduling optimization. We first analyzed the relationship between all the production units from the crude oil to the distributional destinations of oil products. A mathematical model of the refinery production scheduling was then built with minimum total surplus inventory as the objective function. We assumed a known downstream demand and used a step by step model to optimize oil stocks. The oil blending plan, production scheduling, amount of crude oil, and refined oil mixing ratios were all derived from the model using three methods: a nonlinear method called Particle Swarm Optimization (PSO), the simplex method and the enumeration method. The evidence laid out in this paper verifies our models functionality and suggests that systems can be significantly optimized by using these methods which can provide solutions for industries with similar challenges. Optimization of the refinery’s overall production process is achieved by implementing models for each of the three distinguished subsystems: oil blending model, plant scheduling model, and the mixed crude oil refining model. The demand dictates the final production quantities. From those figures we are able to place constraining limits on the input crude oil. The refined oil production scheme is continuously enhanced by determining the amount of constituent feed on the production equipment according to the results of previous production cycle. After optimization, the minimum surplus inventory of the five oil components approach their lower limits that were calculated using our models. We compare the literature on scheduling optimization challenges both in China and abroad while providing a detailed discussion of the present situation of Chinese refineries. The interrelationships of production processes on each other are revealed by analyzing the system and breaking it down to three fundamental parts. Basing the final production predictions on the downstream demand, we are able to achieve a minimum refinery surplus inventory by utilizing a comprehensive refinery scheduling model composed of three sub-models.
