Optimization-based approach for maximizing profitability of bioethanol supply chain in Brazil

Abstract

In this work, a mathematical approach for optimizing and planning the Brazilian bioethanol supply chains (SC) is presented. The optimization problem has an MILP formulation, aiming to maximize the net present value (NPV) of the entire SC of the sugar and bioethanol sector in Brazil. The model takes into account seven different production technologies, two types of warehouses, three types of transportation modes and seven exportation options, whose data were obtained from Brazilian industrial practices. The model aims to propose the optimal configuration of a bioethanol network, that is, the locations of the production and storage facilities, their capacity of expansion policy, the technology selected for manufacturing and materials storage and the flows of all feedstock and final products involved in the bioethanol SC in Brazil. A comparison between the current situation of Brazilian bioethanol SC and the optimal configuration achieved by the proposed model is also included.