The perishable nature of milk products and the suboptimal design of networks contribute to the economic burden on the dairy industry. To tackle this issue, a systemic method of operation, or operations strategy is necessary, especially when it comes to redesigning the supply chain network for milk products. Due to the perishable nature of milk and its specialized storage needs, peak and ebb in demand during seasons and festivities, natural ‘drying’ of milk supply makes redesign a necessity. The objective of this study is to create and apply mixed integer linear programming (MILP) model for developing supply chain networks that handle perishable milk products. MILP can accommodate zero and non-zero supplies of milk and is a tested tool for designing and modelling supply chains. The model prioritizes the optimization of collecting, production, and distribution costs for each product intended for specific district markets. Excel Solver is used to solve the model, uncovering noteworthy decreases in collecting and distribution expenses, while manufacturing costs exhibit no statistically significant alteration. The study analyzes data obtained from a state cooperative dairy facility in Uttar Pradesh, with a focus on the practical application of raw milk procurement, milk products production, and their subsequent distribution. The study highlights the negative outcomes of ‘cost-only’ focused imbalanced planning strategies, in that, such a focus fails to accommodate the high and low demand of milk and milk products during seasons of high demand like festivities or marriage.

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Designing a Cost-Effective Supply Chain for the Dairy Industry

  • Ayush Singh,
  • Anupam Ghosh

摘要

The perishable nature of milk products and the suboptimal design of networks contribute to the economic burden on the dairy industry. To tackle this issue, a systemic method of operation, or operations strategy is necessary, especially when it comes to redesigning the supply chain network for milk products. Due to the perishable nature of milk and its specialized storage needs, peak and ebb in demand during seasons and festivities, natural ‘drying’ of milk supply makes redesign a necessity. The objective of this study is to create and apply mixed integer linear programming (MILP) model for developing supply chain networks that handle perishable milk products. MILP can accommodate zero and non-zero supplies of milk and is a tested tool for designing and modelling supply chains. The model prioritizes the optimization of collecting, production, and distribution costs for each product intended for specific district markets. Excel Solver is used to solve the model, uncovering noteworthy decreases in collecting and distribution expenses, while manufacturing costs exhibit no statistically significant alteration. The study analyzes data obtained from a state cooperative dairy facility in Uttar Pradesh, with a focus on the practical application of raw milk procurement, milk products production, and their subsequent distribution. The study highlights the negative outcomes of ‘cost-only’ focused imbalanced planning strategies, in that, such a focus fails to accommodate the high and low demand of milk and milk products during seasons of high demand like festivities or marriage.