The objective is to investigate solid biofuels logistic system’s stages and to develop regional firewood supply network, which would include storage terminals by choice, exploring several possible scenarios and developing conclusions about supply optimization results. Analysis of supply and demand markets of wood fuel in Latvia, focusing on region that includes Jelgava, Tukums, Dobele and Bauska districts were investigated in the research. In the defined researched region geographical location of boiler houses and storage terminals from perspectives of increasing of solid biofuel demand was observed. A method that allows calculating optimal production flow and expected costs for final customers (boiler houses) within different scenarios and delivery options was developed. In addition the model demonstrates differences between direct production flow of wood fuel and flow through storage terminals. Linear programming and mixed integer programming models implementation is carried out using Xpress Solver in combination with geographical data processing with ArcGis 9.3.