Bi-Objectives Optimization of a Second-Generation Biofuel Supply Chain under Demand Uncertainty

Uncertainty is a key challenge that limits the sustainable development of a second generation biofuel supply chain. This paper aims to optimize this supply chain under biofuel demand uncertainty with the consideration of a quantity discount contract on feedstock procurement. Such a supply chain is comprised of three components:(1) feedstock fields; (2) biofuel refineries; and (3) biofuel demand zones. The focus is to determine the optimal plans for:(a) biofuel refineries location and size; (b) a feedstock procurement strategy; and (c) a transportation plan for feedstock and biofuel. A mixed integer stochastic programming model with bi-objectives is proposed and then a solution procedure for this problem is developed. Finally, a case is adopted to explain the algorithm.