1. Amirsaman Hamzeh Jaejin Jang Industrial and Manufacturing Engineering
Game Theoretic Modeling of a Biofuel Supply Chain in Existence of Incentives to Promote Cellulosic Based Biofuel Production
Amirsaman Hamzeh
Jaejin Jang
Industrial and Manufacturing Engineering

2. Introduction
Energy Security and Global Warming
Renewable Energy Promotion
Biofule Production
Renewable Fuel Standard (RFS) requires 36 billion gallons of biofuel by 2022.
21 billion gallons should be cellulosic based.

3. Introduction
Source: Yue et al., (2014)

4. Pros and Cons of Advanced Biofuel
No Competition with Food Supply Chain
Environmentally Friendly
Cons
Lower Energy Content
More Expensive Production Costs
GOVERNMENT’S SUPPORT

5. Research Questions
How effective are incentive plans in stimulating the cellulosic biofuel
How does a centralized supply chain differ in performance compared with a decentralized one?

6. Problem Description p1 p2 q1 q2 Farmer Corn Based Refinery (R1)p1 p2 q1 q2
Farmer
Corn Based Refinery (R1)
Cellulosic Based Refinery (R2)

7. Results (Capacitated Farmer)

8. Results (Unapacitated Farmer)

9. Conclusion
Without the existence of marginal lands on which the farmer can grow corn or energy crop, subsidizing either the farmer or R2 does not push the biofuel production up as well as consumer surplus.
Centralized channel is much more efficient than Decentralized
Effects of W and T are not the same and the subsidy paid to R2 seem to be a more powerful lever than the one paid to the farmer.

10. THANK YOU FOR YOUR ATTENTION