Palm Oil Eco-Industrial Park Optimization Model Using Goal Programming Approach

¹ Department of Industrial Engineering, Diponegoro University, Semarang, Indonesia
² Department of Industrial and Systems Engineering, Institut Teknologi Sepuluh Nopember, Surabaya, Indonesia
³ Department of Industrial Management, National Taiwan University of Science and Technology, Taipei, Taiwan

^* Corresponding author: ratna.tiundip@gmail.com

Abstract

The increasing consumption followed by growth in palm oil production in Indonesia has caused an increase in waste generation, which can harm the environment if disposed of directly. An alternative solution for this problem is to implement the circular economy concept to establish an Agro Eco-Industrial Park (AEIP) to minimize the environmental impact of palm oil production. Little attention has been given to investigating the optimization of material sharing within an AEIP. Implementing the concept of AEIP and based on the material flow of palm oil production, this research attempts to develop a mathematical model using a goal programming approach to optimize waste utilization in the palm oil industry. The mathematical formulation involves creating an objective function to minimize residual material exchange and three constraint functions associated with the material exchange, liquid waste requirements, and demand fulfillment. The simulation result indicates that the model performs better than the existing conditions. The mathematical model developed in this study demonstrated balance in material sharing within the AEIP of the palm oil industry, leading to a closed loop and a 100% waste utilization rate.