Integrated Bioenergy Supply Chain Network Planning Problem

We consider planning and design of an extended supply chain for bioenergy networks (i.e., networks for multibiomass as well as biofuel logistics) in an integrated fashion while simultaneously addressing strategic and tactical decisions pertaining to location, production, inventory, and distribution in a multiperiod planning horizon setting. In our modeling, we also explicitly incorporate realistic operational parameters, including biomass deterioration rates and transportation economies of scale. For an efficient solution of our model, we suggest a Benders decomposition–based algorithm that can handle realistic size problems for design and analysis purposes. We implement the approach in a particular way using callback functions, in which the master problem is solved only once; we also develop surrogate constraints for enhanced lower bounds to obtain improved convergence especially for large instances. We provide computational results that demonstrate the efficiency of the solution approach on a wide‐ranging set of problem instances. Furthermore, we develop a realistic case using data pertaining to the state of Texas and conduct an extensive analysis on the effects of varying input parameters on the design outcomes for a bioenergy supply chain network.