A hybrid decomposition algorithm for designing a multi-modal transportation network under biomass supply uncertainty

•Proposed two-stage stochastic programming model for biomass co-firing supply chain.•Scenario generated using prediction errors from historical and forecasted supply.•A hybrid decomposition algorithm connecting SAA with an enhanced PHA is proposed.•Case study reveals the impact of feedstock uncertainty on co-firing supply chain.

This study presents a two-stage stochastic programming model for the design and management of a biomass co-firing supply chain network under feedstock supply uncertainty. To represent a more realistic case, we generate scenarios from prediction errors of the historical and forecasted biomass supply availabilities. We solve the model using a hybrid decomposition algorithm that combines Sample average approximation with an enhanced Progressive hedging algorithm. The proposed algorithm is validated via a real-world case study using data from Mississippi and Alabama. Computational results indicate that the proposed algorithm is capable of producing high quality solutions in a reasonable amount of time.