An integrated gas-oil and bio-diesel supply network model with strategic and tactical applications considering the environmental aspects

Abstract

In recent years, research has shown that biomass can be a source of energy to replace fossil fuels and effectively reduce current environmental crises. Researchers have studied how biofuels are supplied through the oil supply chain to achieve tangible results. This paper presents an optimization model for the gas-oil and biodiesel supply chains suggesting the optimization of both supply chains simultaneously for the first time. The proposed model deals with the connection points of two supply chains and determines the two chains’ connection points by considering two economic and environmental objective functions. The model can be used to make decisions on issues such as location, allocation, production planning, inventory management, capacity expansion, and so forth. The proposed programming model’s performance has been studied through a real case study in Iran and the sensitivity analyses have been performed. The ε-constraint method was used to solve the multi-objective model. The proposed model is expected to be effective in the future management of countries’ fuel sources, particularly to be used as an alternative to fossil fuels. Also, this research can provide a basis for more extensive research on fuel supply chain integration.