Biofuel supply chain considering depreciation cost of installed plants

Authors

School of Industrial and Systems Engineering, College of Engineering, University of Tehran, P.O. Box 11155-45632, Tehran, Iran

Abstract

Due to the depletion of the fossil fuels and major concerns about the security of energy in the future to produce fuels, the importance of utilizing the renewable energies is distinguished. Nowadays there has been a growing interest for biofuels. Thus, this paper reveals a general optimization model which enables the selection of preprocessing centers for the biomass, biofuel plants, and warehouses to store the biofuels. The objective of this model is to maximize the total benefits. Costs of the model consist of setup cost of preprocessing centers, plants and warehouses, transportation costs, production costs, emission cost and the depreciation cost. At first, the deprecation cost of the centers is calculated by means of three methods. The model chooses the best depreciation method in each period by switching between them. A numerical example is presented and solved by CPLEX solver in GAMS software and finally, sensitivity analyses are accomplished.

Keywords