Determining an optimal area to locate a biorefinery under economic and environmental criteria

Abstract

Facilities location is a strategic decision which has to be carefully considered because it could involve the failure or success of a business. For that reason, anything that helps decision makers to facilitate their location decision processes is of their utmost interest. The aim of this paper is, therefore, providing a methodology that could be useful for the decision makers by giving them not only an optimal point but also a whole region where they can focus on their attention. Knowing that biofuels are settling as a new alternative energy source which has been spreading around the world to reduce greenhouse gas emissions and oil dependence, this methodology is tested in the real case of locating a biorefinery in Navarre, Spain. Moreover, A Mixed Integer Linear Programming (MILP) model has been developed to generate optimal region vertices as well as some other supply chain characteristics, including, among others, which crops are going to be harvested, when they are going to be collected, and their storage levels. Additionally, two criteria were implemented in MILP model to create two optimal regions: one considering an economic criterion and other one minimizing environmental impact. As a result, two regions were drawn in the Navarrese territory that point out where a biorefinery should be located and how the supply chain should be designed.