Development and implementation of an optimisation model for biofuels supply chain

Abstract

Biofuels supply chain comprises a wide set of activities involving a rather complex set of parameters. Cultivation of the raw materials is closely related to the agricultural sector whereas the production of the final product presumes the operation of a conversion plant. The distribution network aims at delivering the final product close to the consumption. The extent of the involvement of each one of the previously mentioned sectors is the result of strategic and operational planning of the whole supply chain and, in the general case, determines the efficiency of the biofuels sector. Taking also into account the very rapidly changing opinions related to the environmental behaviour of the whole biofuels supply chain, it becomes very clear that the parameters in the sector are continuously changing. Therefore, the consideration of an integrated supply chain appropriately modelled is believed to be very critical and could result in the optimal solution per case, economically and/or environmentally speaking. In this paper the development of a mathematical model for the optimal design and operation of Biofuels Supply Chain is proposed as an integrated approach that can take into account both technical and economic parameters affecting the performance of the whole value chain. Model implementation would facilitate and support the decision taking in various planning and operational issues such as infrastructure investments, the quantities of raw materials to be cultivated, the quantities of biofuels to be produced in the domestic market or imported, identifying the best available solution for the optimal design and operation of the biofuels supply chain.