Integrated bioethanol-gasoline supply chain evolved by changing US Government policies - model and algorithm

Davoud Ghahremanlou and Wieslaw Kubiak

International Journal of Operational Research, 2023, vol. 48, issue 2, 141-177

Abstract: COVID-19 travel restrictions caused gasoline consumption reduction. Global warming and crude oil dependency had already driven policymakers to make policies to reduce consumption of gasoline. The US had created policies to regulate bioethanol production and blending with gasoline. Although these regulations created opportunities, they also placed new burdens on the obligated parties. The effect of the policy change on the integrated bioethanol-gasoline supply chain (IBGSC) is therefore important for both government and business to study to reduce bankruptcies in current market refineries and bio-refineries. To that end, we extend the IBGSC studied by Ghahremanlou and Kubiak (2020a) to include both first and second generation bioethanol, import and export, and existing infrastructure. We develop a two-stage stochastic programming model. Solving this model leads toward solving NP-hard problems, therefore, we develop an algorithm and overcome the computational complexity. The ELM can be employed to evaluate sustainability of the IBGSC under different policies.

Keywords: COVID-19; supply chain management; operations management; location-allocation; sustainability; stochastic programming; oil war. (search for similar items in EconPapers)
Date: 2023
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