Logging residues, which refer to the unused portions of trees cut during logging, are important sources of biomass for the emerging biofuel industry and are critical feedstocks for the first-type biofuel facilities (e.g., corn-ethanol facilities). Logging residues are under-utilized sources of biomass for energetic purposes. To support the scaling-up of the bioenergy industry, it is essential to design cost-effective biofuel supply chains that not only minimize costs, but also consider the biomass quality characteristics. The biomass quality is heavily dependent upon the moisture and the ash contents. Ignoring the biomass quality characteristics and its intrinsic costs may yield substantial economic losses that will only be discovered after operations at a biorefinery have begun. This paper proposes a novel bioenergy supply chain network design model that minimizes operational costs and includes the biomass quality-related costs. The proposed model is unique in the sense that it supports decisions where quality is not unrealistically assumed to be perfect. The effectiveness of the proposed methodology is proven by assessing a case study in the state of Tennessee, USA. The results demonstrate that the ash and moisture contents of logging residues affect the performance of the supply chain (in monetary terms). Higher-than-target moisture and ash contents incur in additional quality-related costs. The quality-related costs in the optimal solution (with final ash content of 1% and final moisture of 50%) account for 27% of overall supply chain cost. Based on the numeral experimentation, the total supply chain cost increased 7%, on average, for each additional percent in the final ash content.
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