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228. Risk-sharing collaboration models for the production of Sustainable Aviation Fuels: an optimization model
Invited abstract in session MC-24: Clean Energy Supply Chains, stream Sustainable Supply Chains.
Monday, 12:30-14:00Room: 83 (building: 116)
Authors (first author is the speaker)
| 1. | Sophia Raaymann
|
| WHU - Otto Beisheim School of Management | |
| 2. | Stefan Spinler
|
| Kuehne Foundation Endowed Chair in Logistics Management, WHU - Otto Beisheim School of Management |
Abstract
To decarbonize the aviation sector, the supply of sustainable aviation fuels (SAF) needs to be substantially increased. However, the production of SAF is associated with substantial risks, like demand risk, technological maturity risk, production cost risk or regulatory risk. To share these risks in SAF production, we propose risk-sharing collaborations between SAF suppliers and buyers. This approach fills a gap in existing research, which mostly focuses on technological aspects of SAF like its scalability or regulatory incentives. We create an optimization model that stochastically models SAF market prices and production costs, includes contract parameters like reservation fees or contract duration and models the heterogeneity in the SAF producer market through parameters like production efficiency, feedstock prices, penalties or geography. Firstly, a centralized scenario in which the whole supply chain’s profit is maximized is evaluated. Secondly, a decentralized scenario using a Stackelberg game is evaluated. The model determines the collaboration model one risk-averse buyer and multiple suppliers would agree on to maximize their profits. The results indicate the best suitable risk-sharing collaboration model for both SAF buyers and suppliers.
Keywords
- Stochastic Optimization
- Game Theory
- OR in Sustainability
Status: accepted
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