A Simulation Model of the “Bio-depot” Concept in the Context of Components of Variance and the “Taguchi Loss Function”

The research focuses on the simulation, statistical evaluation, costs, and continuous improvement of supply chains for bio-based materials. A significant challenge of using cellulosic feedstocks for biofuel or bioenergy production is the high per unit costs of final products, e.g., biofuels. The goal of the research is to provide practitioners with useful statistical methods and a simulation Excel template for evaluating the variance and costs associated with the supply chain of bio-based products. Statistical Process Control (SPC), components of variance, Taguchi Loss Function, and reliability block diagrams (RBD) are used in this thesis for the evaluation of the supply chain system of handling the feedstock components for biofuel production. These statistical methods are well accepted and suitable to assess and monitor the components of the supply chain for biofuel feedstocks, e.g., Switchgrass (Panicum virigatum L.), loblolly pine (Pinus taeda L.) chips, etc. Applying these statistical methods will allow for the quantification of the variance of the system and its components, e.g., feedstock particle size processing, drying, and ash content. The overall goal of the study is to quantify the variation of the components within the supply chains, estimate components costs (and total cost) using the Taguchi Loss Function, and provide suggestions for improvement of the system (www.spc4lean.com).