Integreted strategic and tactical optimization planning of biomass to bioethanol supply chains coupled with operational plan using vehicle routing: A case study in Ethiopia

The optimization of supply chain, a subject of active research in process system engineering, frequently leads to large Mixed Integer Linear or Non-Linear Problems more particularly when applied to realistic industrial cases. In this domain, one main challenge concerns multi scale modeling to accurately integrate the different decision scales (from strategic to operational) and to study the impact of the decision across these scales, in order to effectively contributes to intelligent and coherent decision making. Unfortunately, very few papers cover the three decision levels -strategic (long-term decisions: supply network design), tactical (medium-term decisions: management of network design) and operational (short-term decisions: routing, inventory management...) to have a holistic perspective of the supply chain. Therefore, the first objective of this paper is to model as finely as possible the three decision levels by focusing more particularly on the transport related decision due to their importance on the supply chain performances. As a progress, the Vehicle Routing Problem, one of the most studied problem in logistic and one of the most complex, is integrated into a strategic and tactical model. But, the resulting large-scale MILP model must be solved in a reasonable computational time. To achieve this second objective, we developed a novel iterative multi scale strategy that optimizes the model at two spatial and two temporal scales. This strategy is based on a deep knowledge of the mathematical models and especially of the variables that strongly influence the resolution. The real biofuel supply chain in the Ethiopian country is used to demonstrate the capabilities of the approach, and the improvement in computing time and solution strategy. In addition to the change in the design of the supply chain network, the use of an operational model that finely describes the transport activities shows that the costs related to these activities are often underestimated by a factor between 2 and 3 in the classical models of the literature. The main perspectives of this work are to address the two main shortcomings of the proposal: writing and solving in a reasonable computational time a single model rather than using a decomposition (especially useful for multi-objective optimization) and integrating other decisions at the operational level to not be limited to those related to transportation.

Automated summary

The optimization of supply chain is an active research subject in process system engineering, and it often involves large Mixed Integer Linear or Non-Linear Problems in realistic industrial cases. However, very few papers cover all three decision levels - strategic, tactical, and operational - to have a holistic perspective of the supply chain. This paper aims to finely model the three decision levels, with a focus on the transport-related decision, and to develop a novel iterative multi-scale strategy to optimize the model.