Optimization of an integrated harvest, and process planning model in the agri-food industry

Abstract

In this paper, an integrated harvest and production planning problem in the olive oil industry is addressed. The aim of the paper is to develop and optimize a mathematical model that integrates both olive harvest and olive oil production process. The objective is to maximize the total profit while determining quantity of olives harvested from several olive groves, quantity of olives purchased from external farmers, quantity of olive oil produced, and by-product management to handle hazardous effects of olive oil production. The problem is formulated as a mixed integer linear programming model (MILP). Maximization of profit consists of two components; total sales revenue and total cost including harvesting, purchasing, fixed and variable processing costs. Constraints on the system include harvest planning, harvest capacity, production planning, and processing constraints. The proposed MILP model incorporates several distinguishing characteristics of the problem such as ripeness of olives, olive oil quality, organic and conventional farming, and by-product management. A numerical experiment based on a real-world case study was presented to verify the effectiveness of the developed model. The results show that simultaneously considering harvesting and production processes can significantly assist the profitability of the olive oil supply chain. A scenario analysis is conducted by extending the base model to explore olive loss in the olive groves which can occur due to the severe climatic conditions.