An approach to optimize multi-enterprise biofuel supply chains including Nash equilibrium models

An increasing concern in the supply chain management field is the determination of policies aiming at improving the performance of the whole system while preserving an adequate reward for each partaker. The work presented here deals with this critical issue applying the Nash game theory to the development of bioenergy systems. The supply chain planning problem was formulated as a Mixed Integer Linear Programming (MILP) model using a linearized Nash-type objective function. The approach was demonstrated through a case study concerning the bioethanol production in Northern Italy. Result show significant improvements in the mechanisms of transfer price formation towards a fair profit allocation between partakers in bioenergy systems.