Designing a Reliable and Congested Multi-Modal Facility Location Problem for Biofuel Supply Chain Network

Abstract

This study presents a mathematical model that designs a reliable multi-modal transportation network for a biofuel supply chain system while site-dependent facility failure and congestion are taken into consideration. The proposed model locates the multi-modal facilities and biorefineries and determines the optimal production, storage, and routing plans in such a way that the overall system cost is minimized. We propose a hybrid Constraint generation-based Rolling horizon algorithm to solve this challenging NP-hard problem. The performance of this algorithm is tested in a example case study with numerical analysis showing that the hybrid algorithm can find near-optimal solutions to large-scale problem instances in a reasonable amount of time. Results indicate that the effect of congestion reduces the usage of multi-modal facilities in the biofuel supply chain network while bio-refineries and multi-modal facilities tend to move away from coastal areas when disruption probabilities are taken into consideration.

Keywords

• biofuel supply chain network
• multi-modal facilities
• constraint generation algorithm
• rolling horizon heuristic