Modeling intermediate product selection under production and storage capacity limitations in food processing

In the food industry products are usually characterized by their recipes, which are specified by various quality attributes. For end products, this is given by customer requirements, but for intermediate products, the recipes can be chosen in such a way that raw material procurement costs and processing costs are minimized. However, this product selection process is bound by production and storage capacity limitations, such as the number and size of storage tanks or silos. In this paper, we present a mathematical programming approach that combines decision making on product selection with production and inventory planning, thereby considering the production and storage capacity limitations. The resulting model can be used to solve an important practical problem typical for many food processing industries.