This study addresses a capacitated intermediate product selection and blending problem typical for two-stage production systems in the food processing industry. The problem involves the selection of a set of intermediates and end-product recipes characterising how those selected intermediates are blended into end products to minimise the total operational costs under production and storage capacity limitations. A comprehensive mixed-integer linear model is developed for the problem. The model is applied on a data set collected from a real-life case. The trade-offs between capacity limitations and operational costs are analysed, and the effects of different types of cost parameters and capacity limitations on the selection of intermediates and end-product recipes are investigated.
- operations management
- production planning