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Profit allocation in collaborative bioenergy and biofuel supply chains

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  • Gao, Evelyn
  • Sowlati, Taraneh
  • Akhtari, Shaghaygh

Abstract

In this paper, the profit allocation problem, which was overlooked in the collaborative bioenergy and biofuel supply chain literature, is considered. The optimization model for the strategic and tactical planning of a bioenergy and biofuel supply chain is modified and a number of cooperative game theory allocation methods are evaluated for a case study of collaboration among three potential bioconversion facilities in British Columbia, Canada. Moreover, a sensitivity analysis is conducted to evaluate the stability of the methods with changes in parameters. The results show that the collaboration of three bioconversion plants would generate the highest profit compared with other coalitions. Based on the results, the savings from collaboration could improve the total net present value by 5%. The results highlight that the profitability and stability of collaboration are closely related to bio-oil market prices and demand. The proportional allocation methods hardly generate stable (efficiency and individual rationality) results. Therefore, caution should be taken about the frequent use of proportional methods for costs/benefits allocation by the industry. Instead, the nucleolus and equal profit methods are recommended as alternative methods since they are always stable regardless of variations in model parameters, such as bioproduct demand and prices.

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  • Gao, Evelyn & Sowlati, Taraneh & Akhtari, Shaghaygh, 2019. "Profit allocation in collaborative bioenergy and biofuel supply chains," Energy, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:energy:v:188:y:2019:i:c:s0360544219317074
    DOI: 10.1016/j.energy.2019.116013
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    2. A-Ru-Han Bao & Yao Liu & Jun Dong & Zheng-Peng Chen & Zhen-Jie Chen & Chen Wu, 2022. "Evolutionary Game Analysis of Co-Opetition Strategy in Energy Big Data Ecosystem under Government Intervention," Energies, MDPI, vol. 15(6), pages 1-24, March.
    3. Zeng, Lijun & Du, Wenjing & Zhang, Wencheng & Zhao, Laijun & Wang, Zhaohua, 2023. "An inter-provincial cooperation model under Renewable Portfolio Standard policy," Energy, Elsevier, vol. 269(C).
    4. Mobtaker, A. & Ouhimmou, M. & Audy, J.-F. & Rönnqvist, M., 2021. "A review on decision support systems for tactical logistics planning in the context of forest bioeconomy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).
    5. Liu, Jia-Cai & Sheu, Jiuh-Biing & Li, Deng-Feng & Dai, Yong-Wu, 2021. "Collaborative profit allocation schemes for logistics enterprise coalitions with incomplete information," Omega, Elsevier, vol. 101(C).
    6. Bin Zhang & Qingyao Xin & Min Tang & Niu Niu & Heran Du & Xiqiang Chang & Zhaohua Wang, 2022. "Revenue allocation for interfirm collaboration on carbon emission reduction: complete information in a big data context," Annals of Operations Research, Springer, vol. 316(1), pages 93-116, September.
    7. Zhang, Shuai & Lei, Qingyu & Wu, Le & Wang, Yuqi & Zheng, Lan & Chen, Xi, 2022. "Supply chain design and integration for the Co-Processing of bio-oil and vacuum gas oil in a refinery," Energy, Elsevier, vol. 241(C).

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