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Supply Chain Problem

Supply Chain Problem


We have a supply of 10,000,000L of cow’s milk. Of this supply, 15% is A2 milk and 85% is A1 milk. (A1 and A2 are specific types of proteins found in cows milk. Depending on the breed of cattle, their proportion can vary). We need to decide what to do with this milk, where our options are as follows:

Process the milk into pasteurized milk cans

Process the milk to yogurt

Process the milk to cream

We have the following information for each possible product

Maximum Demand of required milk for processing (1000 liters)

Minimum % of A2 milk

Profit contribution

($ per 1000 liters)

Milk cans

No Limit











The maximum demand is given in terms of milk required for processing into milk cans, yogurt and cream. (it is not a direct demand of each product).

Consider the following decision variables.

A2M: amount of A2 milk than goes into milk cans

A2Y: amount of A2 milk that goes into yogurt

A2C: amount of A2 milk that goes into cream

A1M: amount of A1 milk that goes into milk cans

A1Y: amount of A1 milk that goes into yogurt

A1C: amount of A1 milk that goes into cream

*Assume all the units in 1000 L’s.

I have mange to find A1Y as 1600 and A2Y as 400

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