Novel Evaluation Approach for Biomass Supply Chain: An Extended Application of PCA

Abstract

The establishment of integrated biomass supply chain is a prospective solution to address the expanding global energy demand, at the same time bridging the world to a more sustainable future. The evaluation of sustainability performance of a supply chain is often compounded of a complex series of variables. The redundancies in variables often make the results become hard to be analysed and diagnosed. In order to address this issue, principal component analysis (PCA) is introduced. PCA allows to convert a huge series of correlated variables into a smaller set of uncorrelated variables known as principal components (PCs), without losing too much information. However, the optimisation of PCs is relatively difficult as PCs encompass of convex combinations of original variables. This paper proposes novel systematic optimisation approach that incorporates PCA and analytical hierarchy process (AHP) to determine the optimal transportation design and processing hub location in an integrated biomass supply chain.