A MINLP Model to Optimal Design of ? Sustainable Dairy Supply Chain Taking into Account Preferences of the Network Actors

Abstract

The increase of pollutants generated in the production of dairy products, the increase of the production costs and emerging social problems requires the development of approaches for resilience improvement of the considered product productions. An effective way to achieve this is by optimising all activities across the supply chain: from milk suppliers through the production itself to end-users meeting environmental, economic and social criteria. The other important aspect of solving this type of problems is taking into account the preferences of all actors in the network. The present study proposes a mixed-integer non-linear programming (MINLP) model for the optimal design of a sustainable dairy supply chain (SC) for the production of different dairy products satisfying the preferences of all actors of the network - milk suppliers, dairies and markets. The approach includes models for the production of dairy products along with the economic, environmental and social impact of the considered SC. Three optimization problems are defined and solved at different optimisation criteria representing the preferences of all actors in the SC. The first solution results in the supply of 162,022 kg of two types of milk for the production of 61,758 kg of low and high-fat content products. The latter exceeds the market demands. This is the solution with the largest economic and social costs and lowest production profit of 118,008 BGN. The second solution is related to the production of 60,023 kg of both products. This is the solution with the lowest economic costs and largest production profit of 143,809 BGN. In solution 3, full satisfaction of market requirements was achieved. It is related to the supply of 132,146 kg of both types of milk for the production of 60,057 kg of both products.