Mallee plantations have been integrated into wheat farms in Western Australia as a large-scale and multi-purpose woody crop since the 1990s. Mallee describes the growing habit of certain eucalypt species that grow with multiple stems shooting from an underground crown root (lignotuber), usually to a height of up to 10 meters. These types of plantations could be a considerable source of biomass to produce renewable energy. In this project the supply chain of Mallee was modelled using BIOPLAN’s linear programming model to investigate the impact of tree size, extraction distance and transport distance on supply chain costs. The harvesting system included a feller-buncher, front end loader, in-field chipper and truck. The mobile Bruks chipper was found to be more efficient than Peterson Pacific to chip Mallee trees. The results indicated that harvesting larger tree sizes can slightly diminish chipping cost. Extraction cost was very sensitive to the extraction distance in this case study. Long transport distances in larger management area (to meet higher energy demands) will highly increase the transport cost. From optimised supply chain cost and sensitivity analysis, the best practice for efficient Mallee biomass supply chain was suggested as following: harvesting Mallee trees when reaching larger size (about 0.3 m3 for a tree consisting of multiple stems with an average DBH of 5 cm to 10 cm per each stem), planning average extraction distance to be shorter than 1000–1500 m, establishing the Mallee plantations closer to energy plant with transport distance shorter than 100 km (with a radius of 50–75 km providing an effective compromise between cost and distance) or alternatively installing new bioenergy plants no farther than 100 km from existing Mallee plantations.