CASE: AIRLINE FUEL MANAGEMENT

Linear programming has been used for airline fuel management. Given a sequence
of flight legs, the problem is to determine the number of kilograms of jet fuel to buy
at each stop in order to minimize the total purchase cost subject to restrictions on
tank capacity, maximum take-off weight and safety stock of fuel at the end of each
leg. The problem is complicated by the fact that the weight of jet fuel itself causes
more fuel burn-off. Consider the following small problem for the flight sequence of
an A310-200 of Middle East Airlines:
The jet has just landed in Beirut with 8,000 kg of fuel on board. The next leg is to
Kuwait. The average flight time to Kuwait is 2.54 hours. The fuel burn-off has been
shown to be approximately a linear function of the duration of flight multiplied by
the take-off weight of the airplane. On this leg, the fuel burn-off in kilograms is
expected to equal 0.0258(duration x weight) + 4,254, where weight = deadweight
of 81,522 kg + payload of 19,478 kg + weight of fuel on board, which includes the
initial fuel plus any fuel uplifted in Beirut (to be determined). The tank capacity is
44,000 kg and the maximum takeoff weight is 138,600 kg. The safety stock of fuel
at the end of this leg is 7,508 kg. The price of jet fuel in Beirut is $0.765 per gallon
(a gallon of jet fuel weighs 3.1 kg). The price of jet fuel in Kuwait is $0.7454 per
gallon.
The return leg from Kuwait to Beirut is expected to take 2.79 hours. The fuel burn-
off in kilograms is expected to equal 0.0277(duration x weight) + 4,083. The
payload will be approximately 8,278 kg. The safety fuel for this leg is 6,250 kg.
The next leg is from Beirut to Copenhagen and is expected to take 4.25 hours. The
fuel bun-off in kilograms is expected to equal 0.02575(duration x weight) + 5,775.
The payload will be approximately 17,378 kg. The safety fuel for this leg is 5,400
kg. The price of fuel in Copenhagen is $0.682 per gallon.
The return leg from Copenhagen to Beirut is expected to take 3.83 hours. The fuel
burn-off in kilograms is expected to equal 0.02872(duration x weight) + 3,757. The
payload will be approximately 19,678 kg. The safety fuel for this leg is 6,122 kg.
The next leg is from Beirut to Jeddah and is expected to take 2.46 hours. The fuel
burn-off in kilograms is expected to equal 0.0254 (duration x weight) + 4009. The
payload will be approximately 21,878 kg. The safety fuel for this leg is 10,263 kg.
The price of jet fuel in Jeddah is $0.7696 per gallon.
The return leg from Jeddah to Beirut is expected to take 2.37 hours. The fuel burn-
off in kilograms is expected to equal 0.0252(duration x weight) + 4084. The
payload will be approximately 2,778 kg. The safety fuel for this leg is 6,085 kg.
ASSIGNMENT
Using the Excel file Airline Fuel as a starting point, complete the template to study
this problem.
Solve the linear program using Excel Solver.
Adapt your model to analyze the following scenarios:
a) Middle East Airlines followed your recommended refuelling plan.
Unexpectedly, the flight from Beirut to Jeddah was forced into a holding
pattern, increasing the total flight time to 3.15 hours. Fortunately, Middle
East Airlines had anticipated unexpected events and the flight dipped into its
safety stock to remain airborne for the extended duration. Of course, this did
mean additional fuel had to be purchased for the return journey to Beirut.
Compute the additional fuel cost.
b) Return to the original conditions in the problem. Middle East Airlines is
considering switching the order of the trips. It has been suggested that
because of the low price of fuel in Copenhagen they should do the Beirut-
Copenhagen run first and Beirut-Kuwait second. Will the fuel cost be affected
by the order of the trips? Based on your results from evaluating this change,
what do you think of this idea in general (do you think it might be more cost
effective to change the flight order sometimes or not at all and why/when)?
In answering this question, you are expected to run only the one alternative
scenario and state your beliefs as a result. (You do NOT need to run any
other combinations.)
c) Return again to the original conditions of the problem. Middle East Airlines
has been offered a contract to ship an additional load of 5000 kg of cargo on
the Kuwait-Beirut leg of the journey. Should they accept or not? Why? If
they accept, what price should they charge the customer?
d) Return again to the original conditions of the problem. Recent news reports
have suggested that the price of airline fuel will be increasing worldwide by
as much as 10 cents per gallon. Needless to say, this has Middle East Airlines
worried, as their budget can only sustain a total fuel cost of no more than
$20,000 before this route combination is no longer cost effective to offer. At
the recent meeting of the Board of Directors, executives expressed hopes
that the increase might be lower or might affect different cities to varying
extents. Does Middle East Airlines have reason to worry? How high would
prices have to get before they would need to seriously consider dropping this
set of routes? Run NO MORE THAN 3 new models/scenarios to explore this
situation. Clearly indicate the new conditions you explored in each model
(highlight the changes to your data directly in the spreadsheet).