Accurately estimating and minimizing costs for the cellulosic biomass supply chain with statistical process control and the Taguchi Loss Function

This research focuses on the statistical evaluation of the feedstock attributes of the biomass supply chain and the estimation of attribute costs as a function of the feedstock variability. Challenges of using cellulosic feedstocks include the variability of feedstock quality (e.g., ash content and moisture content), which impacts the final cost of the manufactured product. Statistical Process Control (SPC), Taguchi Loss Function, and components of variance techniques were illustrated for quantifying cumulative variance in the biomass supply chain. Costs in the presence of cumulative variance were estimated for switchgrass (Panicum virgatum L.) and loblolly pine residues (Pinus taeda L.). Findings of the study indicated that additional costs from ash content variability in switchgrass increased the net cost by $19.15 per dry tonne. Additional costs from densification due to particle size variation increased net cost by $11.59 per dry tonne. Moisture content variation increased costs by $14.86 per dry tonne. This would represent a 50 to 100% increase in costs due to variation based on a $60 to $70 per dry tonne manufactured product cost. This study illustrates that total costs may be considerably underestimated if the influence of variance for key factors in the supply chain and associated costs are not estimated.