Procurement, Production and Marketing at Supply-Driven Milk and Milk Products Cooperative

Abstract

In this chapter, we formulate and solve a math-programming model for Milk and Milk Products Cooperative (MMPC) – a cooperative organization with its shareholders as milk producing member farmers in India. The joint procurement, production and marketing problem of this supply-driven cooperative is characterized by highly perishable raw material, i.e., milk, exhibiting unmatched peaks of supply and demand seasons in a year. The product portfolio of MMPC consists of both high and low return products, and not all products can be inventoried for long periods without refrigeration. Moreover, MMPC adopts a pricing and inventorying strategy keeping in view the expectations of both its suppliers and consumers. In this regard, it is essential for the cooperative to develop annual plans well before the supply season peaks.

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This chapter is based on one of the chapters of the thesis submitted by the first author at Indian Institute of Management Ahmedabad, India. The author is sincerely grateful to his thesis advisory committee, Dr. Devanath Tirupati, Dr. Pankaj Chandra and Dr. M. S. Sriram, for their guidance in conceptualizing and analyzing the problem context in the thesis originally.