The pellet supply chain (PSC) is arguably crucial in supplanting fossil energy sources. Despite being the world's second-largest exporter of biomass pellets, the operation of PSC components in Vietnam is still fragmented and lacks economic and environmental efficiency. Changes in Bill of Material (BOM) help achieve these objectives. Discrete event simulation (DES) is particularly adapted to assist business owners in identifying BOM variation and its impacts on their real-life PSCs. Exploiting the advantages of the DES approach, this paper presents an evaluation model for the PSC, including procurement, production, transportation, and delivery modules. Simulation results yield a profit of USD 15,426,661, equivalent to roughly 20% of the revenue. The total amounts of carbon dioxide (CO2) emitted during production and transportation are 7,680.6 and 28,627.0 tons, respectively. The model is further used to assess the volatility of financial indicators and CO2 emission from changes in the raw materials for production. The findings suggest that maintaining the small-scale BOM level should be a solution for improving the economic and environmental efficiency of PSC components in Vietnam.

Supply chain; Wood pellet; Simulation; Economic and environmental analysis; Bill of material