Optimization of biofuel distribution networks in the Southwestern United States

Bio-fuels have gained much attention over the last decade. However, most of the research efforts have been focused on improving the quality and increasing the productivity of bio-fuels, and there have been minimal attempts to develop research on the supply and delivery issues of these sources. We believe that the viability of biofuels is strongly related to the efficiency of the distribution networks. Therefore, in this research we present an optimization model and its application to an infrastructure for bio-fuels distribution network. Unlike other studies on the topic acknowledging the fact that traditional sources of fuel (i.e. petroleum) will not readily disappear from the competitive landscape, we focus on the dynamic nature of how the "new" and "old" energy sources may ultimately co-exist by adjusting their geographic product offerings based on production and transportation costs. To handle the uncertain demands of biofuels, we adopt the concept of stochastic programming. The presented model also considers two different modes of transportation with heterogeneous fleet size. The applicability of the optimization model is demonstrated in the case study of Bio-fuels distribution network in the Southwestern United States. The results demonstrate that the model is a practical and flexible tool in solving realistic distribution planning problem of bio-fuels.