A two-stage stochastic model for an industrial symbiosis network under uncertain demand

Abstract

Industrial Symbiosis (IS) networks are structures built by volunteer companies with the aim of exchanging unused or residual resources, benefiting all participating companies. The profitability of these volunteer companies is critical as it affects the sustainability of these networks. Fluctuations in a participating company's production level can potentially disrupt its network by altering the quantity and availability of wastes and by-products. In light of these considerations, we analyse the impact of fluctuations in demand for final products of the companies on company profitability, and waste and by-product usage. For this purpose, we formulated a two-stage stochastic programming model and solved it using the Sample Average Approximation (SAA) method. We tested our model on a theoretical IS network comprising companies in the forest products industry. The results demonstrate that companies in the network keep exchanging by-products and remain profitable despite uncertainties in demand. Consequently, we conclude that the established network exhibits resilience to demand fluctuations, which is an important aspect of its sustainability.