A Multi-Objective Supply, Production and Distribution Planning Problem for the Supply Chain of Dairy Industry : A Case Study

In this paper, we study a multi-objective supply, production and distribution planning problem (MSPDP) originated from a dairy company in China, where three echelons of supply chain including customers, pastures, and factories are considered. In practice, the company endeavors to utilize raw milk and production capacity simultaneously to manufacture dairy products required by customers from all over the country, and then try to select a suitable mode of transportation to distribute the finished products to each customer. The whole process is a complex upstream-and-downstream coordination system of the supply chain taking multitudinous constraints into consideration. A novel mixed integer programming (MIP) model is proposed to address this problem. Except for the usual characteristics in the dairy industry, such as order fulfillment, cost, equilibrium in production, multi-product, multi-periods, multi-factories, multi-pastures, production lot size, transportation mode, and so on, we also consider a special constraint that raw milk is graded by quality and can be demoted to use, which makes our model different from other studies in the dairy industry. Moreover, the performance of the proposed model is evaluated by several actual instances from the dairy company, and the results prove that our model meet the requirement of industrial application