A General Production and Financial Planning Model: Case of a Poultry Integration

Abstract

We propose a general linear programming formulation for a poultry integration to facilitate decision making in production and financial planning. The formulation is motivated by a medium-size application and by involving practitioners from the industry. It is a realistic and strategic model since we incorporate all divisions in a complex poultry integration, (including, but not limited to, feed mill, breeder coops, incubation house, broiler coops, slaughterhouse and distribution centers) as well as the interrelations among these divisions. The horizon we consider is in years, which makes the plan a strategic level plan in this fast-paced industry. Through extensive experimentation with various end-customer demand scenarios, we found out that the quantity of breeder chicks to buy at certain times during the planning horizon is the robust key decision variable in the overall system.