A Stochastic Bilevel Programming Model for an Industrial Symbiosis Network

A stochastic bilevel model for an industrial symbiosis (IS) network in an eco-industrial park (EIP) is presented in this paper. Companies in IS networks produce final products using mostly by-products rather than raw materials. Companies in these networks are known to share a variety of synergies, including wastes and by-products. They mostly negotiate on the price and amount of the by-products. This negotiation is critical as by-products should be available on time at the right amount for smooth production. Moreover, the use of these by-products should provide savings compared to the use of raw materials so that companies could benefit from IS. However, the fluctuations in the final product demand affect both the EIP management (the leader) and companies (followers) in the network. Therefore, we proposed a stochastic bilevel model where the lower-level problem is a two-stage stochastic programming model. Our findings show that the demand uncertainty has an impact on both parties.