Integrated supply chain optimization model for sorghum-based bioethanol industry on a small scale: Case study in East Java Province, Indonesia

The Indonesian government set a policy to use renewable energy, including bioethanol, that is still in the market trial stage. Sorghum is a plant that has the potential to be quite promising as a raw material for making bioethanol. This study focused on optimizing the supply chain for small-scale integrated sorghum-based bioethanol industry. A linear programming model was used to formulate the optimal result. Key aspects included farmer-owned sorghum plantations supplying three bioethanol plants with a capacity of 4 klpd (kiloliters per day) each, transportation, and distribution of bioethanol to three fuel depots in East Java, Indonesia. Results showed that over 10 years, the total supply chain cost was 932 billion IDR, while revenues from bioethanol and by-products reached 1.272 billion IDR, resulting in a net income of 340 billion IDR. The calculation results indicated that the use of sweet sorghum for bioethanol and by-products is feasible to develop.