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Design of a biofuel supply network under stochastic and price-dependent biomass availability

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  • Gökhan Memişoğlu
  • Halit Üster

Abstract

This article presents a framework for profit-maximizing strategic bio-energy supply chain design by taking into account variability in biomass as a response to price set as well as uncertainty in biomass yield. We present our model as a two-stage stochastic integer program for a multi-period integrated design of a network in which the here-and-now strategic decisions include biorefinery locations and size as well as base biomass price. To efficiently solve our model, we suggest an L-shaped-based algorithm along with a Sample Average Approximation approach. Finally, we demonstrate our results in a case study in Texas using realistic data. Within our framework, we present the relationship between biomass and biofuel price, as well as the optimal network design for the biofuel producer.

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  • Gökhan Memişoğlu & Halit Üster, 2021. "Design of a biofuel supply network under stochastic and price-dependent biomass availability," IISE Transactions, Taylor & Francis Journals, vol. 53(8), pages 869-882, August.
    • Handle: RePEc:taf:uiiexx:v:53:y:2021:i:8:p:869-882
    DOI: 10.1080/24725854.2020.1869870
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    Cited by:

    1. Zhen, Lu & He, Xueting & Zhuge, Dan & Wang, Shuaian, 2024. "Primal decomposition for berth planning under uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 183(C).

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