The Supply Chain Planning Optimization Model for the Cattle Feed Industry with a Linear Programming Approach

Abstract

To maximize the opportunities for the small–medium scale ruminant feed industry, it is necessary to manage production planning properly, so efficiency and effectiveness are achieved by making excellent and safe feed products at the lowest cost. This study models integrating production planning with feed formulations, both with the ability to supply materials and demand for feed products that consider variations in the source of feed raw materials. The research used a mixed-integer linear programming (MILP) planning model, and the output produced a mathematical model of production planning that is relevant to the planning period horizon. The model helped make optimal decisions as to what and how much to produce and then save in a monthly period. Then it determined what and how many products are currently produced. The results showed that by using an optimization model developed with existing parameters in the cooperative, it was determinable that during the production planning period in January 2022, the dairy cattle concentrate was around 300 tons, which was distributed to agent 1 as much as 70% and to agent 2 as much as 30%. Beef cattle concentrate was 350 tons, which was distributed to agent 1 as much as 65% and to agent 2 as much as 35%, with a total profit of IDR Rp.348 million. Sensitivity analysis shows that a 10–30% change in product prices would affect the amount of beef concentrate production but would not change the production of dairy cattle concentrate.

Keywords

• ruminant feed
• optimization model
• integration of production planning
• formulation