Strategic supply and transportation planning of a supply chain for agricultural biomass to hydrogen and syngas

• A novel bi-level programming model of dual sourcing biomass supply chain is proposed. • The economic analysis of biomass supply chain is maximized by an extension of Stackelberg game. • An integration of strategic supply and tactical transportation planning can minimize biomass delivery tardiness. • An efficient global optimization strategy is derived for the bi-level MINLP. Strategic supply and transportation planning of agricultural biomass to hydrogen and syngas supply chain with inter-fuel and inter-biomass substitution was studied in this paper. The sourcing and transportation decision was modeled, according to bi-level optimization, where suppliers competed on supply capacity by maximizing their profits at minimum transportation and holding cost. Considering supply chain superstructure, dual biomass suppliers were modeled to supply a biofuel producer who produced two different types of biofuels. The supply planning was combined with transportation planning to minimize total supply chain costs. The results showed that the model was capable of finding optimum purchase and selling prices and production capacity, by maximizing inter-fuel and inter-biomass substitutability. Another key finding was that the proposed model was capable of finding optimum order allocation to both biomass suppliers in such a way that there was an equal profit distribution between suppliers and biofuel producers.