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Keywords:

  • supply chain;
  • gasoline and ethanol;
  • gas stations planning;
  • bilevel decomposition

The design and planning of an integrated ethanol and gasoline supply chain is addressed, and is composed of harvesting and production sites for ethanol, petroleum refineries, distribution centers where blending takes place, and the retail gas stations where blends of gasoline and ethanol are sold. We postulate a superstructure that combines all the components of the supply chain and different means of transportation, and model this multiscale design problem as a multiperiod MILP model. In order to identify regions where investments are needed and the optimal configuration of the network, a strategic planning model is considered in which gasoline stations are aggregated in different regions. A detailed formulation is considered where regions are disaggregated into gas stations to determine the retrofit projects for the selection of blending pumps over their expected life. Also, the application of these MILP models with two large-scale problems are illustrated. © 2013 American Institute of Chemical Engineers AIChE J, 59: 4655–4672, 2013