Abstract—Rising energy demand, dwindling petroleum
resources and climate change are the foremost drivers of the
energy revolution leading to development of alternative fuels to
replace fossil derived energy sources. Biofuels as one of the
viable solutions is increasingly becoming part of the energy mix
of many nations whose market has become established by
biofuel policies and mandates. However, investments in biofuel
supply chains can be expensive and several supply chain models
have been developed to demonstrate its cost-effectiveness with
few models considering coordination with existing petroleum
infrastructure and tactical management of feedstock and
products. This consideration could have significant impact on
cost reduction and effective coordination of both supply chains.
Hence, this article presents a multi-period multiscale strategic
design and planning model for an integrated ethanol and
gasoline supply chain which composes a superstructure that
combines all the components of the biofuel and petroleum
supply chain. The model presented is a Mixed Integer linear
Programming (MILP) model used to identify regions where
investments are required and the optimal configuration of the
network while also taking into consideration inventory
management and transportation logistics. The application of a
dynamic capacity strategy also provides information on
strategic capacity additions, expansions, contractions and
closures. A case study of northeast of Brazil where investments
in ethanol bio-refineries is required to equalize the market
demand is considered. Results of the case study produce an
optimal network configuration with minimal investments in
bio-refineries and optimal capacity utilization of plants whereas
also ensuring cost is minimized and demand is fully met in all
time periods.
Index Terms—Biofuels, mixed integer linear programming,
strategic planning, supply chain.
The authors are with the Departamento de Engenharia Quimica da Escola
Politecnica, Universidade de Sao Paulo, Sao Paulo 05508-000, Brazil
(e-mail: abamichael489@usp.br, galoroux@usp.br).
[PDF]
Cite: Aba Michael M. and Galo A. C. Roux, "Strategic Planning of Integrated Biofuel and Petroleum Fuel Supply Chains," International Journal of Chemical Engineering
and Applications vol. 11, no. 3, pp. 71-77, 2020.
