A game-theory approach for the analysis and optimization of biofuel supply chains

In recent years there has been a rapid expansion of the biofuels industry given the exhaustion of the fossil sources and as part of the solution to climate change being the transportation sector as the most affected party. With concern to ethanol, corn-based ethanol has been dominating the market. This work proposes the incorporation of a game-theory approach within a Mixed Integer Linear Programming (MILP) modelling framework devised to optimize the design and planning of biomass-based fuel supply chains behaving under conditions of cooperation and competition in order to address possible business relationship situations among feedstock providers and biofuel producers. The proposed approach is illustrated through a demonstrative case study representing a bioethanol production in Northern Italy.