Transportation Logistics: A Case Study of Bio-Diesel Factory Location Plans

Abstract

Due to fluctuations in oil prices and the very low elasticity of oil demand, alternative fuels have in recent years been on the development agenda all over the world. In addition, environmental issues (reducing CO2 emissions) have also fostered this development. Although the production of alternative fuels requires very significant harvesting and transportation work, very rarely have logistics issues been addressed in research on this topic. In this chapter we consider the factory location decision through a case study about a Finnish company that has plans to establish a bio-diesel production unit. It uses wood and wood waste as its raw materials. The research findings show that transportation logistics requirements are diverse (as road, railway, and sea are needed), not only for the transportation of local raw materials, but also raw materials from nearby foreign places. As shown, the proximity of a refinery for semi-finished wax product also plays a significant role.