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Biofuel refinery location and supply chain planning under traffic congestion

Author

Listed:
  • Bai, Yun
  • Hwang, Taesung
  • Kang, Seungmo
  • Ouyang, Yanfeng

Abstract

This research focuses on planning biofuel refinery locations where the total system cost for refinery investment, feedstock and product transportation and public travel is minimized. Shipment routing of both feedstock and product in the biofuel supply chain and the resulting traffic congestion impact are incorporated into the model to decide optimal locations of biofuel refineries. A Lagrangian relaxation based heuristic algorithm is introduced to obtain near-optimum feasible solutions efficiently. To further improve optimality, a branch-and-bound framework (with linear programming relaxation and Lagrangian relaxation bounding procedures) is developed. Numerical experiments with several testing examples demonstrate that the proposed algorithms solve the problem effectively. An empirical Illinois case study and a series of sensitivity analyses are conducted to show the effects of highway congestion on refinery location design and total system costs.

Suggested Citation

  • Bai, Yun & Hwang, Taesung & Kang, Seungmo & Ouyang, Yanfeng, 2011. "Biofuel refinery location and supply chain planning under traffic congestion," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 162-175, January.
  • Handle: RePEc:eee:transb:v:45:y:2011:i:1:p:162-175
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    References listed on IDEAS

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    1. Jayakrishnan, R. & Tsai, Wei T. & Prashker, Joseph N. & Rajadhyaksha, Subodh, 1994. "A Faster Path-Based Algorithm for Traffic Assignment," University of California Transportation Center, Working Papers qt2hf4541x, University of California Transportation Center.
    2. Marshall L. Fisher, 1981. "The Lagrangian Relaxation Method for Solving Integer Programming Problems," Management Science, INFORMS, vol. 27(1), pages 1-18, January.
    3. Eathington, Liesl & Swenson, David A., 2007. "Dude, Where's My Corn? Constraints on the Location of Ethanol Production in the Corn Belt," Staff General Research Papers Archive 12777, Iowa State University, Department of Economics.
    4. Mazzola, Joseph B. & Neebe, Alan W., 1999. "Lagrangian-relaxation-based solution procedures for a multiproduct capacitated facility location problem with choice of facility type," European Journal of Operational Research, Elsevier, vol. 115(2), pages 285-299, June.
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