Multi-Stage Adaptive Robust Optimization over Bioconversion Product and Process Networks with Uncertain Feedstock Price and Biofuel Demand

Abstract Uncertainties abound in the biofuel industry and other product and process networks. Some key uncertainties include feedstock price uncertainty and product demand uncertainty. Product demand can guide strategic decisions such as sizing of capital equipment, and feedstock price can affect operational purchasing and processing decisions. We propose a multi-stage adaptive robust optimization approach to handle both of these different types of uncertainties in order to find the minimum total annualized cost of a bioconversion product and process network. Robustness of the solutions are controlled by budgets of the uncertainty, allowing for various solutions with varying levels of conservativeness. The minimum total annualized cost among the robust solutions ranges from $17.9M/y to $22.5M/y. A solution with a good compromise between risk and cost was identified with a cost of $21.9M/y.