Bilevel Optimization\nfor Capacity Contingency Debottlenecking\nConsidering Trade-Offs within the Waste Oil Supply Chain

A bilevel\noptimization model is developed to synthesize an optimal\nwaste oil recycling supply chain design in economic and environmental\naspects while considering its overall resiliency in addressing major\ndisruptions. In the upper level, optimal re-refineries selection is\ndetermined based on the cost and emissions, while the “n-1”\ncontingency is incorporated in the subsequent level to identify the\nproduction capacity required for each re-refinery to ensure the functionality\nof supply chains under disruption. Two regional case studies, comprising\nthe East Malaysia and West Malaysia, are presented to evaluate the\neffectiveness of the “n-1” contingency strategy. The\neconomic viability of applying “n-1” is different for\nboth cases. Considering a one-month disruption across the asset lifespan,\nthe model anticipates a positive economic gain of 15.79% (in East\nMalaysia) and 85.71% (in West Malaysia). Nevertheless, applying “n-1”\ncontingency demonstrates better environmental performances in both\ncases as compared to cases without “n-1”.