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ARS Home » Plains Area » Brookings, South Dakota » Integrated Cropping Systems Research » Research » Publications at this Location » Publication #224476
Title: Modeling the effects of value-added processing and logistics using arena

Author
item Rosentrater, Kurt
item KONGAR, ELIF - UNIV OF BRIDGEPORT

Submitted to: Symposium Proceedings
Publication Type: Proceedings
Publication Acceptance Date: 3/15/2008
Publication Date: 3/28/2008
Citation: Rosentrater, K.A., Kongar, E. 2008. Modeling the effects of value-added processing and logistics using arena. Proceedings from Northeast Decision Sciences Institute, Brooklyn NY, March 28-30, 2008, pp. 1-12.

Interpretive Summary: Scarcity and cost of nonrenewable fossil fuels have been a growing focus of many energy-dependent nations, including the U.S., for the past couple of decades. There are mainly two ways to approach these problems: (1) reducing the energy dependency and/or (2) developing alternative means of energy production. Utilizing biofuels, which are renewable sources of energy, is a promising way to produce energy. But, as this industry grows, so too does the quantity of byproducts, which are known as DDGS. This paper discusses a model that has been developed to analyze the economic viability of DDGS processing, and includes both deterministic and probabilistic variables. Capital and operational costs for various DDGS production rates and pelleting ratios are considered in the simulation, to validate the model. The developed model is run for a total of various scenarios including different production rates and pelleting ratios. Simulation results indicate that as pelleting ratio increases, the cost to ship DDGS by rail decreases substantially. These decreases are increasingly profound as DDGS production rate increases.

Technical Abstract: Scarcity and cost of nonrenewable fossil fuels have been a growing focus of many energy-dependent nations, including the U.S., for the past couple of decades. There are mainly two ways to approach these problems: (1) reducing the energy dependency and/or (2) developing alternative means of energy production. Utilizing biofuels, which are renewable sources of energy, is a promising way to produce energy. But, as this industry grows, so too does the quantity of byproducts, which are known as DDGS. This paper discusses a model that has been developed to analyze the economic viability of DDGS processing, and includes both deterministic and probabilistic variables. Capital and operational costs for various DDGS production rates and pelleting ratios are considered in the simulation, to validate the model. The developed model is run for a total of various scenarios including different production rates and pelleting ratios. Simulation results indicate that as pelleting ratio increases, the cost to ship DDGS by rail decreases substantially. These decreases are increasingly profound as DDGS production rate increases.