An optimization approach for the design and planning of the oil palm supply chain in Colombia

Abstract

This article presents a mathematical model to optimize the planning decisions in the Colombian oil palm supply chain (SC). The optimization model consists of a mixed integer linear formulation, aiming at maximizing the expected net present value of the entire SC, including electricity supplied to the national grid by this activity. The model considers different products, types of warehouses, transportation modes, and export options, reflecting as far as possible the current situation of the oil palm industry in Colombia. It sets as free variables the location of the storage and production facilities, their expansion possibilities, and the flows of all feedstock and final products involved in the SC. The model constitutes a quantitative decision-making tool in the area of strategic design and optimal planning of biomass-based SCs. The optimal solution obtained by the model presents a more rational distribution of the production units in comparison with the current situation.