Spatio-temporal economic properties of multi-product supply chains

• DOI: 10.1016/j.compchemeng.2022.107666
• Publication Date: 2022-01-15T07:05:30Z
• Authors: Philip A. Tominac; Weiqi Zhang; Victor M. Zavala
• Keywords: 90-08; Optimization and Control (math.OC); FOS: Mathematics; Mathematics - Optimization and Control; 01 natural sciences; 0105 earth and related environmental sciences

32 pages, 15 figures<br/>In this work, we analyze the spatio-temporal economic properties of multi-product supply chains. Specifically, we interpret the supply chain as a coordinated market in which stakeholders (suppliers, consumers, and providers of transportation, storage, and transformation services) bid into a market that is cleared by an independent entity to obtain allocations and prices. The proposed model provides a general graph representation of spatio-temporal product transport that helps capture geographical transport, time delays, and storage (temporal transport) in a unified and compact manner. This representation allows us to establish fundamental economic properties for the supply chain (revenue adequacy, cost recovery, and competitiveness) and to establish bounds for space-time prices. To illustrate the concepts, we consider a case study in which organic waste is used for producing biogas and electricity. Our market model shows that incentives for waste storage emerge from electricity demand dynamics and illustrates how space-time price dynamics for waste and derived products emerge from geographical transport and storage.<br/>