Title: Evaluation of the impacts of governmental policies on the biofuels supply chain design under uncertainty

Authors: Narges Kazemzadeh; Guiping Hu

Addresses: Department of Industrial and Manufacturing Systems Engineering, Iowa State University, Ames, IA, USA ' Department of Industrial and Manufacturing Systems Engineering, Iowa State University, Ames, IA, USA

Abstract: There is a growing interest in the use of biomass as a source of energy around the world. In the USA, the renewable fuel standard (RFS) sets policies and mandates to support the production and consumption of biofuels. However, the uncertainties associated with the governmental and local policies and regulations on both production and consumption have imposed significant impacts on the biofuel supply chain network. This study aims to determine the optimal design of the biofuel supply chain to maximise annual profit under the impacts of governmental policies. In this study, two-stage stochastic programming models are developed in which conditional value at risk is considered as a risk measure to control the shortage of mandate. A case study in Iowa is conducted to investigate the effects of different policies and demonstrate the applicability and efficiency of the models.

Keywords: supply chain management; SCM; biorefineries; stochastic programming; biofuel policy; conditional VaR; value at risk; CVaR; government policies; biofuels; biofuel supply chains; supply chain design; supply chain management; SCM; uncertainty; regulation; optimal design; USA; United States.

DOI: 10.1504/IJSE.2015.071136

International Journal of Sustainable Economy, 2015 Vol.7 No.3, pp.203 - 219

Received: 24 Sep 2014
Accepted: 04 Nov 2014
Published online: 13 Aug 2015 *

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