FuelOpt: a decision support system for forest fuel logistics

The use of forest fuel is increasing at heating plants in Sweden. Heating plants provide energy in the form of hot water for heating houses and apartments in local municipalities. Forest fuel are products obtained from harvesting in forests that cannot be used for further processing at sawmills and pulp and paper mills. Examples of such products are tree branches, tree tops and low quality logs. The optimization of the supply chain for round-wood (logs to sawmills, pulp and paper mills) and for forest fuel is similar but involves two main differences. First, forest fuel has to be converted into chips before delivery to the customer, and second, the demand for forest fuel varies over the year due to the temperature. To balance the chipping and transportation capacities over time, it is important to manage inventory levels at terminals. The optimization model developed provides decision support for questions regarding the choice of technology for chipping, where to perform the chipping operations, and the allocation of different assortments to heating plants. The system has been tested on a large case study from a Swedish forest energy company. The results show large savings and that the system is very useful for both planning and business development. Journal of the Operational Research Society (2012) 63, 1600-1612. doi:10.1057/jors.2011.157 published online 29 February 2012