A production planning model for biorefineries with biomass perishability and biofuel transformation

We model and solve a production planning problem over a discrete-time horizon of a biorefinery that treats different types of biomass and transform them either into bioenergy or biofuel. Both biomass and biofuel can be stored. Storage of biofuel serves to match the supply with the demand of both bioenergy and biofuel. Deterioration of biomass, which was rarely studied in the bioenergy production literature, is modeled and its impact on storage decisions is analyzed. The proposed model has two main characteristics: (i) controlling inventory of the perishable biomass while considering different ages for the stored biomass and (ii) biomass can be transformed into either bioenergy or biofuel, which in turn can be stored and then transformed into bioenergy. The applicability of the developed model is shown through several numerical experiments. The results show that first, perishability can lead to profit losses that cannot be neglected. Second, there is a threshold value on the perishability rate above which perishability does not have any longer impact on the profit. Third, storage and transformation of biofuel results in considerable increase in profit and smoother production at the facility even when there is a high fluctuation in price and demand. Fourth, when the decision maker imposes a maximum age on biomass to enhance quality and reduce health risks, the model provides guidelines on how to make this decision with the lowest impact.