Pricing decisions in a decentralized biofuel supply chain with RIN mechanism considering environmental impacts
2021
Allameh, Ghazaleh | Saidi-Mehrabad, Mohammad
This study develops pricing models in a decentralized biofuel supply chain focusing on both economic and environmental aspects. Environmental impacts are used as a measure to reflect the environmental objective function calculated based on ReCiPe method. A bi-level multi-objective stackelberg game model considering farmers and biorefineries as followers and the blender as leader is proposed. An ε-constraint method is utilized to convert the multi-objective model to a single-objective one. The bi-level model is then transformed to a solvable integrated model. Finally, a real case study of switchgrass bioethanol is presented to illustrate the performance of the proposed model. Results show that focusing on environmental goals results in the increasement of selling prices and profits of farmers and biorefineries and decreasment of about %7 in economic profit of the blender. Therefore, tradeoff analyses are performed for objective functions leading to 10 Pareto optimal solutions which give managerial insights to the blender. Moreover, sensitivity analyses are provided with respects to price elasticity and final fuel's price and results show logical trends in selling prices.
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