Abstract
One renewable energy form currently being promoted is that of biodiesel asa substitute for diesel fuel. This involves mixing biodiesel with petrodieselin proportions governed by the respective regulations of each country. Thepurposes of this research are to support the exploiting of biodiesel forms ofrenewable energy and to optimize the palm oil-sourced biodiesel supply chainby conducting an Indonesia-based case study. The optimization process wasimplemented in accordance with the government’s mandate and long-termplanning. There are two decision variables to consider. First, the model willidentify the optimum delivery point locations as a blending terminal betweenbiodiesel and petrodiesel (petroleum diesel). Second, it will determine thelocation of biodiesel plants’ construction in order to satisfy the government’smandate. The results show that, while determining delivery point locationsaffects supply chain costs, it does not do so significantly. More influentialis determining the construction locations of biodiesel plants and this studyprovides a model for deciding the delivery points and locations of biodieselplants in order to minimize biodiesel supply chain costs in Indonesia. This study presents in detail biodiesel supply chain process in Indonesia and basedon the literature, no research was found on studying optimization biodieselsupply chain in Indonesia.
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