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    • ISSN: 2010-0221 (Print)
    • Abbreviated Title: Int. J. Chem. Eng. Appl.
    • Frequency: Quarterly
    • DOI: 10.18178/IJCEA
    • Editor-in-Chief: Prof. Dr. Shen-Ming Chen
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Editor-in-chief
Prof. Dr. Shen-Ming Chen
National Taipei University of Technology, Taiwan
 

IJCEA 2020 Vol.11(3): 71-77 ISSN: 2010-0221
doi: 10.18178/ijcea.2020.11.3.783

Strategic Planning of Integrated Biofuel and Petroleum Fuel Supply Chains

Aba Michael M. and Galo A. C. Roux
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).

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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.

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