The Impact of Commodity Price Uncertainty on the Economic Value of Waste-to-Energy Conversion in Agricultural Processing
By Bin Li, Economics and Management School, Wuhan University, China, bin.li@whu.edu.cn | Onur Boyabatlı, Lee Kong Chian School of Business, Singapore Management University, Singapore, oboyabatli@smu.edu.sg | Buket Avcı, Lee Kong Chian School of Business, Singapore Management University, Singapore, buketavci@smu.edu.sg
Abstract
This section studies the economic implications of waste-to-energy conversion; that is, converting organic waste into a saleable product to be used as a feedstock in another firm (e.g., biomass boiler) to generate energy (e.g., heat, electricity). We focus on the context of an agricultural processor that uses a commodity input to produce both a commodity output and organic waste. By making a comparison with a benchmark case in which waste goes to landfill, we characterize the economic value of waste-to-energy conversion. Using a model calibration based on palm oil industry in Malaysia, we examine how this economic value is impacted by (i) input and output spot price uncertainties and (ii) organic waste price’s dependence on the output spot price.
Frontiers in Supply Chain Finance and Risk Management
This monograph contains eight thought-leading contributions on various topics related to supply chain finance and risk management: “Disruption Mitigation and Pricing Flexibility” by Oben Ceryan and Florian Lücker. “Optimal Newsvendor IRM with Downside Risk” by Paolo Guiotto and Andrea Roncoroni. “Competitive Forward and Spot Trading Under Yield Uncertainty” by Lusheng Shao, Derui Wang, and Xiaole Wu. “The Impact of Commodity Price Uncertainty on the Economic Value of Waste-to-Energy Conversion in Agricultural Processing” by Bin Li, Onur Boyabatlı, and Buket Avcı. “Corporate Renewable Procurement” by Selvaprabu Nadarajah. “Blockchain-Based Digital Payment Obligations for Trade Finance” by Jing Hou, Burak Kazaz, and Fasheng Xu. “Long-term Service Agreement in Power Systems” by Panos Kouvelis, Hirofumi Matsuo, Yixuan Xiao, and Quan Yuan. “The Bullwhip Effect in Servicized Manufacturers” by Jiang Shenyang, Jiang Zhibin, Niu Yimeng, and Wu Jing.
Companion
Foundations and Trends® in Technology, Information and Operations Management, Volume 16, Issue 3-4 Special Issue: Frontiers in Supply Chain Finance and Risk Management
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