Robust and sustainable supply chains under market uncertainties and different risk attitudes – A case study of the German biodiesel market

Laura Elisabeth Hombach, Christina Büsing and Grit Walther

European Journal of Operational Research, 2018, vol. 269, issue 1, 302-312

Abstract: The transportation sector emits 22% of the global CO2 emissions, 75% of them resulting from road transportation. The European Union aims to reduce these emissions, which can be achieved by blending biofuels into fossil fuels. To obtain robust and sustainable biofuel supply chains, political regulations need to simultaneously combine ecologic and social aspects with economic considerations, known as the triple-bottom-line dimensions of sustainability. Next to these conflicting sustainability objectives, uncertain planning parameters as well as the decision makers’ different risk attitudes must be taken into account to obtain robust and sustainable biofuel supply chains. In this paper, we develop a robust, multi-objective approach to solve this uncertain and multi-objective supply chain problem. For this purpose, the decision maker’s risk attitude is integrated in the design of the scenario sets modeling the uncertainties. This model is applied to the German biodiesel market. We show that a trade-off between the three sustainability targets exists, analyze in detail the relation of the used scenario sets and the decision maker’s risk attitude, and show how the selected risk attitude influences the sustainability performance of the biofuel supply chain.

Keywords: Decision support systems; Sustainable; Multi-objective optimization; Robust optimization; Biomass-to-biodiesel (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:269:y:2018:i:1:p:302-312

DOI: 10.1016/j.ejor.2017.07.015

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