This paper addresses the problem of optimal planning of the fuelwood supply chain throughout a given time horizon. The concept behind the formulation of the problem lies on the same principles as the industrial manufacturing systems. Yet vast differences arise as fuelwood, is considered as a natural resource, consequently additional constraints are introduced in order to prevent the effect of the over-logging due to the increasing demand. A supply chain in a standardized form entails the following nodes according to McCrary et al. (2005):
Agricultural Forest Cooperatives (AFCs) producing raw material.
Fuelwood merchants.
Customers.
The forest is divided into several compartments so as to retain the sustainability through the use of proper management. The quantities of fuelwood produced are restricted to upper bounds due to capacity constraints. Produced fuelwood quantities are stored within certain areas of the forest until their transportation to fuelwood merchants. From there, fuelwood is transported to customers so as to cover the demand.
Based on the previous description of the examined system, it is obvious that two economic systems co-exist in this structure. The first system consists of AFCs while the second system consists of fuelwood merchants. AFCs log wood products, among which fuelwood is widely used and sell these quantities to the fuelwood merchants. Thus the revenue of an AFC is considered to be cost for the fuelwood merchant. Moreover, the merchants earn revenue from the quantities sold to customers, which were previously bought from AFCs. In that sense the profit of the two economic systems are affected in a conflicting way, as the maximization of the profit of AFCs means minimization of merchants’ profit. In this case a compromise in the examined solution should be analyzed.