Fixed-Charge Transportation with Product Blending

Numerous planning models within the chemical, petroleum, and process industries involve coordinating the movement of raw materials in a distribution network so that they can be blended into final products. The uncapacitated fixed-charge transportation problem with blending (FCTPwB) studied in this paper captures a core structure encountered in many of these environments. We model the FCTPwB as a mixed-integer linear program and derive two classes of facets, both exponential in size, for the convex hull of solutions for the problem with a single consumer and show that they can be separated in polynomial time. Furthermore, we prove that in certain situations these classes of facets, along with the continuous relaxation of the original constraints, yield a description of the convex hull. Finally, we present a computational study that demonstrates that these classes of facets are effective in reducing the integrality gap and solution time for more general instances of the FCTPwB with arc capacities and multiple consumers.