Optimization of Supply Chain Management and Facility Location Selection for a Biorefinery

Abstract

If renewable energy and biofuels are to attain success in the market place, each step of their production and the system as a whole must be optimized to increase material and energy efficiency, reduce production cost and create a competitive alternative to fossil fuels. Systems optimization techniques may be applied to product selection, process design and integration, feedstock procurement and supply chain management to improve performance. This work addresses two problems facing a biorefinery: technology selection and feedstock scheduling in the face of varying feedstock supply and cost. Also addressed is the optimization of a biorefinery supply chain with respect to distributed processing of biomass to bio-products via preprocessing hubs versus centralized processing and facility location selection. Two formulations are proposed that present a systematic approach to address each problem. Case studies are included to demonstrate model capabilities for both formulations. The scheduling model results display model sensitivity to feedstock price and transport distance penalized through carbon dioxide emissions. The distributed model shows that hubs may be used to extend the operating radius of a biorefinery and thereby increase profits.