Cost analysis of the location of colombian biofuels plants

Abstract

Facility location is a strategic decision that affects supply chain competitiveness. In this study, facility location and logistics networks were analyzed in 7 biodiesel and 6 bio-ethanol production plants in Colombia. The proposed methodology provided a decision making model to compare facility location taking into account production costs and the logistics network. Preliminary technical and economic studies were conducted using Aspen Plus for process simulation. The logistics network distribution was analyzed using a linear programming method to compare and analyze the advantages and disadvantages of plants situated in different locations of the country. Factors related to location, raw materials, supply chains and capacity were also analyzed. The findings show that three biodiesel plants in Villavicencio, Bucaramanga and Santa Marta and two bioethanol plants in Valle and Cauca had the lowest production cost.