Stochastic Programming of Sustainable Waste Cooking Oil for Biodiesel Supply Chain under Uncertainty

Abstract

As an important emission reduction source for the transportation industry, biofuel has received strong support from the Chinese government. However, the development of the biofuel industry is still struggling. The high degree of uncertainty makes the development of the industry face huge challenges. Kitchen waste, as a biodiesel raw material with a large yield, has good development prospects. Reuse of kitchen waste can solve public health and safety problems. This paper proposes a two-stage stochastic programming model under supply disturbance to optimize the supply chain from the perspective of contract. Then current three main flow directions of kitchen waste are analysed and the reasonable price for biodiesel operators to purchase is determined. By signing contracts with the biodiesel operators, restaurant is guaranteed and encouraged to provide a certain percentage of kitchen waste to meet the demand for biodiesel production. Using actual case in the Yangtze River Delta region, the performance of the stochastic programming model under disturbance was compared. Through the sensitivity analysis of different parameters, this paper determines the influence of its supply chain network design and expected total system cost. Through the optimization of the waste cooking oil (WCO) for biodiesel supply chain, this paper can effectively improve the efficiency of the supply chain, reduce system costs, increase the profits of biofuel operators, and promote the sustainable development of the biofuel industry.