The sustainable biofuel supply chain optimization with considering pricing under uncertainty

Document Type : Research Paper

Authors

• Babak Javadi ¹
• leila manafi ²

¹ Department of Industrial Engineering, Faculty of Engineering, College of Farabi, University of Tehran, Iran

² Department of Industrial, Engineering, Faculty of Engineering, College of Farabi, University of Tehran, Iran

Abstract

Keywords

• "sustainability"
• "biofuel supply chain"
• " biomass"
• " uncertainty"
• " pricing"

Main Subjects

• biufuel

EXTENDED ABSTRACT

Introduction

Population growth, changing human lifestyles and rising living standards have led to an increase in energy consumption in industrialized countries. On the other hand, limited energy resources and environmental damage caused by fossil fuel consumption have led to global attention to renewable energy sources. The availability of renewable resources, the amount of abundance, and non-damage to the environment have increased the share of the global energy supply and the amount of attention to renewable energies in line with sustainable development. New research studies show that there is a direct relationship between the level of development in a country and energy consumption. Access to new energy sources in developing countries is important for improving the economic level of these countries. One of the new renewable energies is biomass energy. The importance of biomass in providing its low price is its native abundance and flexibility, which are used directly such as burning, and indirectly such as converting into biofuels.

Advanced production centers are increasingly characterized by their reliance on renewable energy sources such as tides, wind, sun, geothermal heat, and biomass. These renewable energies offer a clean and sustainable alternative to traditional fuels, providing social, environmental, and economic benefits.

However, in today's dynamic economic landscape, decision-makers and supply chain managers face significant uncertainties and challenges in ensuring sustainability throughout the bioenergy supply chain. One key challenge is biomass's seasonality, which can impact the efficiency and reliability of biofuel production.

In today's world, the issue of supply chain is raised as a major competitive advantage to reduce the cost price. Biofuel supply chain management also has many challenges due to its complex nature, including uncertainty in supply, pricing, logistics, production performance, and demand. Therefore, in this study, a model will be presented that will help biofuel supply chain managers design an efficient chain by considering the uncertainty in the pricing of raw materials with optimal tactical and strategic decisions.

Materials and Methods

In this research, a two-stage stochastic linear mixed integer mathematical model based on stochastic uncertainty for the design of a multi-period sustainable biomass supply chain including four levels of known suppliers, potential collection centers, potential biorefineries and combined facilities for biofuel production is developed and presented. Is. This stable stochastic mathematical model includes the economic aspects, the region's environment, and the chain's social welfare.

Results and Discussion

The economic objective is to maximize profit, the environmental aspect is to minimize the effects of greenhouse gases and operational processes, and the social aspect is to maximize the employment of people, the requested rights of employees, and the welfare resulting from the activities of the chain. Solving the model was done using the generalized constraint epsilon optimization method. The efficiency of the model has been checked in GAMS software version 24.2.1.

Conclusion

The developed stochastic model has been analyzed and investigated based on the stochastic data collected from previous studies in biomass. To measure the effectiveness and accuracy of the developed mathematical model, the changes in the reduction of economic profit, the reduction of environmental costs, and the increase of social benefits, the results of the implementation of this model in deterministic, scenario-based, and stable scenario-based random conditions to evaluate and evaluate the usefulness of the model Based on the changes of the parameters, it has been compared and verified that the approximate target values with random data are more optimal in stable stochastic conditions than in scenario oriented uncertainty conditions. The effects of changes in the values of random parameters of this model in 3 groups, capacity group (farm capacity, refinery production capacity, refinery stock storage capacity, and biomass collection center storage capacity), price and cost group (biofuel price, biomass recycling). The price and cost (of processing each biomass unit) and the biofuel demand group in a certain period with changes [-50%-50] have been evaluated and reviewed. The results show that the objectives are relatively opposite in parts of the Pareto front. Economic benefits and environmental costs are more contradictory and incompatible.

contribution statement:

All authors contributed equally to the conceptualization of the article and writing of the original and subsequent drafts.

Data Availability Statement:

Data available on request from the authors.

Acknowledgements:

The valuable collaboration of Dear researchers Ms. Behnaz Aghaabdollahian and Mr. Mohammadreza Abdali in this research is greatly acknowledged and appreciated. The authors would like to thank all participants of the present study.

Ethical considerations:

The authors avoided data fabrication, falsification, plagiarism, and misconduct.