A stochastic optimisation model for biomass outsourcing in the cement manufacturing industry with production planning constraints

Highlights: • Using biomass to replace coal in cement industry is economically viable . • Collect biomass via cement reverse logistics network is cost effective . • Stochastic optimisation model is useful to evaluate biomass outsourcing . • Biomass availability affects biomass outsourcing plan . -- Abstract: It is estimated that 12–15% of total global industrial energy is consumed by the Cement Manufacturing Industry (CMI). To improve environmental sustainability, biomass has been used as an alternative to fossil fuels. There is a comprehensive literature on biomass production and conversion, but little attention has been paid to biomass logistics in the cement industry. We propose the use of cement distribution trucks to collect biomass on their return journeys. Compared with the use of specialist biomass suppliers, the collection of biomass via cement distribution networks has greater uncertainties in delivery times, volume and quality. This is because biomass collection is a secondary activity and is subject to cement order quantities and the random geographical locations of cement customers. To cope with these uncertainties, additional on-site storage and handling equipment is required. This paper proposes a stochastic programming model to measure the cost-effectiveness of collecting biomass using returning cement distribution trucks in comparison with purchasing biomass from specialised biomass suppliers. A numerical experiment based on a real-word dataset was conducted to verify the effectiveness of the developed model.