Integrated strategic and tactical biomass–biofuel supply chain optimization

Abstract

To ensure effective biomass feedstock provision for large-scale biofuel production, an integrated biomass supply chain optimization model was developed to minimize annual biomass-ethanol production costs by optimizing both strategic and tactical planning decisions simultaneously. The mixed integer linear programming model optimizes the activities range from biomass harvesting, packing, in-field transportation, stacking, transportation, preprocessing, and storage, to ethanol production and distribution. The numbers, locations, and capacities of facilities as well as biomass and ethanol distribution patterns are key strategic decisions; while biomass production, delivery, and operating schedules and inventory monitoring are key tactical decisions. The model was implemented to study Miscanthus-ethanol supply chain in Illinois. The base case results showed unit Miscanthus-ethanol production costs were $0.72L(-1) of ethanol. Biorefinery related costs accounts for 62% of the total costs, followed by biomass procurement costs. Sensitivity analysis showed that a 50% reduction in biomass yield would increase unit production costs by 11%.