Analyzing the impact of intermodal-related risk to the design and management of biofuel supply chain

This study presents a mathematical model that designs a reliable multi-modal transportation network for a biofuel supply chain system, where intermodal hubs are subject to site-dependent probabilistic disruptions. The disruption probabilities of intermodal hubs are estimated by using a probabilistic model which is developed using real world data. We developed an accelerated Benders decomposition algorithm to solve this challenging NP-hard problem. Numerical analysis show that the model selects to use intermodal hubs located in areas with low disruption probabilities. In case of a disaster, the reliable solution results in 6.21% savings over the minimum cost solution. (C) 2014 Elsevier Ltd. All rights reserved.