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A stochastic programming approach towards optimization of biofuel supply chain

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  • Azadeh, Ali
  • Vafa Arani, Hamed
  • Dashti, Hossein

Abstract

Bioenergy has been recognized as an important source of energy that will reduce dependency on petroleum. It would have a positive impact on the economy, environment, and society. Production of bioenergy is expected to increase. As a result, we foresee an increase in the number of biorefineries in the near future. This paper analyzes challenges with supplying biomass to a biorefinery and shipping biofuel to demand centers. A stochastic linear programming model is proposed within a multi-period planning framework to maximize the expected profit. The model deals with a time-staged, multi-commodity, production/distribution system, facility locations and capacities, technologies, and material flows. We illustrate the model outputs and discuss the results through numerical examples considering disruptions in biofuel supply chain. Finally, sensitivity analyses are performed to gain managerial insights on how profit changes due to existing uncertainties.

Suggested Citation

  • Azadeh, Ali & Vafa Arani, Hamed & Dashti, Hossein, 2014. "A stochastic programming approach towards optimization of biofuel supply chain," Energy, Elsevier, vol. 76(C), pages 513-525.
    • Handle: RePEc:eee:energy:v:76:y:2014:i:c:p:513-525
    DOI: 10.1016/j.energy.2014.08.048
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